Alibaba’s stock erupted on Monday, surging as much as 19% in Hong Kong and closing up nearly 13% in New York, after the Chinese tech giant reported earnings that confirmed what investors have been anticipating for months: its artificial intelligence and cloud businesses are finally starting to deliver meaningful growth.
The AI Boom Reframes Alibaba’s Future
The catalyst was a powerful one. Alibaba disclosed that revenue from AI-related products in its cloud division grew at a triple-digit pace for the eighth consecutive quarter. That’s an extraordinary streak, and it’s starting to position Alibaba less as a simple e-commerce titan and more as a serious player in the next phase of China’s technology arms race.
It also helps that the company is reportedly developing a new AI chip to fuel its cloud expansion. In an environment where Beijing sees AI as both a soft-power export and a domestic economic driver, Alibaba appears to be securing its place alongside Huawei in the state’s innovation narrative as per CNBC Live Stream.
Cloud’s Rapid Acceleration
Revenue from Alibaba Cloud, long criticized for underperforming Western peers, rose 26% year-on-year to 33.4 billion yuan ($4.6 billion). Management emphasized that growth is now running faster than the market average and that AI workloads are responsible for a significant part of the acceleration.
This progress contrasts the company’s still-sluggish retail division, where its core e-commerce business, though profitable, is facing both competition and the heavy costs of pushing into ultra-fast or “instant commerce.”
Investors Look Through the Fog
Total revenue rose 2% year-on-year to 247.65 billion yuan ($34.6 billion), slightly missing expectations, but net income soared 78%, partly boosted by portfolio gains. Even if you strip those out, Alibaba’s ability to show discipline in its sprawling empire reassured investors.
On U.S. markets, the stock closed Friday at $135, up 12.9%, putting it near its 52-week highs.
The rally added more than $50 billion in market value, a remarkable feat for a company that, just two years ago, was still navigating regulatory crackdowns, investor skepticism, and a battered growth story.
The Road Ahead: Can AI Carry the Weight?
For all the optimism, Alibaba still faces thorny questions. Its e-commerce margins are shrinking, instant commerce is consuming capital, and international expansion remains uneven. Yet, today’s rally speaks less to perfection than to momentum.
Investors have grown eager for Chinese tech giants to prove they can thrive in the post-regulatory, AI-centered world. Alibaba, at least this quarter, has shown it can.
The company has effectively signaled a pivot away from resting on its online marketplace crown toward staking a leadership role in AI infrastructure, a pivot that could re-anchor its valuation for years.