Alibaba Shares Surge 11% in Hong Kong: Key Earnings Highlights and a Resurgence in China’s E-Commerce Market

Alibaba’s office building in Nanjing, China, is attracting attention after a surge in its stock price post-strong quarterly results. Shares in Alibaba jumped by as much as 11% in Hong Kong, settling at a 9.18% increase.

Key drivers behind this growth include strong performance in Alibaba’s cloud intelligence and e-commerce sectors. Nomura, a financial services group, predicts a solid outlook for Alibaba’s e-commerce in early 2025, supported by government trade-in subsidies. Last year, China announced plans to enhance consumption with 300 billion yuan (about $41.5 billion) in special government bonds to support local consumption initiatives.

“Domestic e-commerce is on a path to recovery, and this positive sentiment is lifting the whole tech sector in China,” said Vey Sern Ling, a senior equity advisor at UBP.

Hong Kong’s tech stocks have been on the rise, partially fueled by the emergence of AI startup DeepSeek, which is challenging U.S. tech with its innovative AI model.

In a rare public appearance, Alibaba’s founder Jack Ma met with Chinese President Xi Jinping recently. Xi has been encouraging private companies to showcase their strengths in a new economic landscape.

Alibaba faced regulatory challenges starting in 2020, notably when its financial arm, Ant Group, had to cancel its IPO due to government intervention. However, the current climate indicates a shift as the government appears more supportive of private enterprises.

Looking ahead, Alibaba is preparing to invest heavily in AI and cloud technology. According to Barclays, the next three years will see the company’s most significant investments in these areas, surpassing total investments made in the last decade, which totaled about 270 billion yuan.

In its latest report, Alibaba posted a net income of 48.945 billion yuan ($6.72 billion) for the quarter ending December 31, which exceeded expectations and marked a dramatic increase from the previous year. The company’s revenue for the quarter reached 280.15 billion yuan, again above estimates, leading to an over 8% rise in its U.S. shares on results day.