Alibaba's Hong Kong-listed shares (BABA-W) surged 7.83% at the market open on Thursday, extending gains from an overnight rally in U.S. trading. The sharp upward move followed the company's release of mixed fiscal fourth-quarter results, with investors focusing on the strong performance of its cloud and artificial intelligence businesses rather than short-term profit pressures.
Despite reporting a significant decline in adjusted earnings due to heavy AI investments, Alibaba's stock gained momentum as management outlined ambitious targets for AI commercialization. The company's cloud division reported external revenue growth accelerating to 40%, with AI-related products accounting for 30% of that revenue. CEO Eddie Wu projected that AI-related revenue would exceed 50% of cloud revenue within the next year, becoming the main growth engine.
Market sentiment was further bolstered by optimism surrounding potential U.S.-China trade developments, as reports indicated progress on tariff reductions ahead of a summit between former President Donald Trump and Chinese leader Xi Jinping. The broader Nasdaq Golden Dragon China Index also advanced, reflecting improved investor confidence in Chinese tech stocks amid the AI investment cycle.
