Alibaba’s surge surpasses other high-tech giants in China, including Tencent, Baidu and JD.com, making Alibaba the most performant tech stock in China so far in 2025.
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Alibaba’s revival in China’s AI industry has once again become an investor favorite. After years of regulatory crackdowns and slowing down the post-pandemic economy, the e-commerce giant has made an astounding comeback as a leading player in artificial intelligence.
Hong Kong-listed stocks have skyrocketed 46% since mid-January, adding nearly $87 billion to market value. This surge surpasses other high-tech giants in China such as Tencent, Baidu and JD.com, making Alibaba the most performant tech stock in China so far in 2025. We will secure a strategic partnership with Apple on AI investments and cloud expansion, including a report on collaboration with AI capabilities for China.
From struggles to success of AI
Alibaba’s turnaround is led by two of Jack Ma’s closest allies, Joe Tsai and Eddie Wu, who took the reins in 2023. . But the real game changer was their decision to all-in the AI.
Since ChatGpt sparked a global AI race, Alibaba has invested heavily in China’s most promising AI startups, including Moonshot and Zhipu, cutting cloud computing prices, and customers have been lost to rivals. AI development efforts began to pay off in January. Benchmark tests showed that the Qwen 2.5 Max model outperforms Meta’s Llama and Deepseek’s V3 on multiple ratings.
This solidified Alibaba’s position as a major AI player, competing not only for Tencent and Bytedance, but also for the rise of AI startups such as Minimax and Zhipu. However, the slow adoption of AI in China, particularly in China, and the hesitantness to pay for AI services, remain challenges. This has made monetization a major concern.
The role of AI in Alibaba’s market rebound
Despite the excitement, China’s cloud industry is still moving behind the US. Alibaba’s cloud revenues rose 9.7% in the December quarter, while Baidu’s 7.7% fell significantly over the same period, with Amazon’s 19% and Microsoft’s 31%. This gap raises concerns about whether Alibaba can fully utilize AI-driven growth.
That hasn’t stopped investors from making big bets. Alibaba stock options trading volume has skyrocketed, reaching its highest level in over four months, with bullish contracts far surpassing the bearish. Hedge funds and long-term investors see AI as a potential game changer, but many are closely watching how Alibaba monetizes AI advancements.
What’s next for Alibaba?
Alibaba’s financial results are scheduled for next Thursday, giving investors a clearer understanding of the AI strategy and cloud business trajectory. The stock has seen impressive gatherings, but some analysts consider it to be undervalued compared to the US tech giants.
With futures revenues at 12.2 times, Alibaba’s valuation is below 14.6 times for five years, making it an attractive bet for investors looking for long-term growth potential. Expanding overseas e-commerce operations could further reduce China’s dependence on domestic markets and drive future revenues.
For now, Alibaba’s AI ambitions have given them a much needed second wind, helping to shake up the struggles of the past few years. The ability to maintain this momentum depends on how effectively an AI breakthrough changes to actual business profits.
