By Obinna Uballa
Alibaba’s Hong Kong-listed shares surged more than 19% on Monday, their highest level since March, following strong quarterly results driven by its cloud computing business and reports of a new AI chip in development, reports said.
The rally builds on Friday’s momentum when Alibaba’s U.S.-listed stock jumped nearly 13% after the company released its earnings for the June quarter.
The Chinese tech giant reported revenue of 247.65 billion yuan ($34.73 billion), a 2% year-on-year increase that fell short of analyst estimates. However, net income surged 78% year-on-year, beating expectations.
The standout performer was Alibaba’s cloud computing unit, which posted a 26% annual revenue increase, accelerating from previous quarters, CNBC reported.
The company highlighted that AI-related product revenue maintained triple-digit year-on-year growth for the eighth consecutive quarter, underscoring the role of artificial intelligence in its future strategy, the report said.
Like its U.S. and Chinese tech rivals, Alibaba has been heavily investing in AI infrastructure, developing its own models, and offering AI services via its cloud platform. This is seen by analysts as a critical step in monetizing AI, similar to the strategies of Microsoft and Google.
Further boosting investor confidence, CNBC reported earlier on Friday that Alibaba is working on a new AI chip, adding to optimism around its long-term growth potential.
Meanwhile, Alibaba’s core e-commerce segment is showing signs of recovery. The company has also entered China’s highly competitive instant commerce space with a feature on its Taobao app that promises one-hour deliveries for certain products, reports said. While heavy investment in this quick commerce initiative has weighed on adjusted e-commerce earnings, investors appear willing to tolerate short-term costs for potential long-term gains.
