By Jack Denton
Alibaba stock fell on Wednesday but was still set to close out its best year since 2017 amid a remarkable rebound in the Chinese technology giant's shares following years of underperformance.
Alibaba's American depositary receipts -- or ADRs, essentially the U.S.-listed stock -- shed 0.5% in Wednesday's premarket after a 0.8% decline on Tuesday. Investors have little to complain about, though, because the stock remains up almost 75% this year.
The last time Alibaba had a year this good, it later turned ugly. The stock price almost doubled in 2017, rising 96%, but crumbled in 2018 with a 21% retreat.
But history is nothing to fret about, especially after Alibaba's rally this year fueled by a pivot to artificial intelligence that was a relief to long-suffering investors.
While the shares are trading at their highest levels since late 2021, the stock -- which closed above $147 on Tuesday -- is still at less than half its October 2020 peak above $300. The years following the record high brought regulatory crackdowns that slammed the Chinese tech sector, with a slowdown in China's economy making matters worse.
China's growth remains an important factor for Alibaba, which still has a core business in online retail that is sensitive to consumer sentiment in the world's second-largest economy.
In "bad news is good news" style, the shares have recently benefited from signs of a growth slowdown in China's economy that could spark stimulus measures from Beijing. That narrative may have been flipped on its head with recent economic data showing growth that may temper stimulus hopes.
China's National Bureau of Statistics revealed on Wednesday that factory activity jumped unexpectedly in December, reversing eight consecutive months of declines. The official purchasing-managers' index ( PMI) rose to 50.1 in December -- with any print of 50 or above marking expansion.
Write to Jack Denton at jack.denton@barrons.com
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(END) Dow Jones Newswires
December 31, 2025 08:59 ET (13:59 GMT)
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