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The AI boom is driving Alibaba's stock price up nearly 50%, while Apple is teaming up to enter the Chinese market?
The frenzy of Chinese artificial intelligence has made Alibaba once again the darling of investors. Since hitting a low on 1/13 and listing in Hong Kong, Alibaba's stock has surged by 46%, expanding its market value by nearly 87 billion U.S. dollars, exceeding the 25% increase of the Hang Seng Tech Index during the same period. This has made the stock the best performer among large Chinese technology stocks since the new year, outperforming competitors such as Tencent Holdings Limited, Baidu, and JD.com.
Alibaba's AI technology has attracted attention, and Apple may cooperate with it in China
The rise this time is due to people's optimistic attitude towards Alibaba's development of its own artificial intelligence services and platforms. After the technology introduced by the Chinese artificial intelligence startup DeepSeek caused a major drop on Wall Street, Alibaba's artificial intelligence services and platforms have attracted attention.
According to reports, Apple plans to cooperate with Alibaba to launch artificial intelligence features in China to rescue the declining sales of the iPhone in China, and the stock prices of Alibaba and Apple are rising together.
DeepSeek appears as a catalyst for AI in China
Andy Wong, Director of Investment and ESG for the Solomon Group in the Asia-Pacific region, said: "The emergence of DeepSeek has brought new catalysts for artificial intelligence related to Chinese technology stocks. In this field, we believe that Alibaba has more practical and complete profit growth prospects in the medium term."
According to Bloomberg, since the launch of ChatGPT, Alibaba has invested in a group of the most promising startups in China, including Moonshot and Zhipu. The company prioritizes expanding its cloud business that supports the development of artificial intelligence, and significantly reduces prices to win back customers who turned to competitors during the turmoil.
In January of this year, Alibaba's benchmark test results showed that its Qwen 2.5 Max version outperformed Meta's Llama and DeepSeek's V3 models in all tests.
China's AI faces concerns about monetization
One of the main obstacles facing Chinese artificial intelligence companies is the slow adoption by domestic consumers and enterprises, as well as a lack of willingness to pay.
So far, the cloud business of China's super-scale data center operators has lagged behind their major US counterparts. Analysts expect Alibaba's cloud computing revenue to grow by 9.7% in the fourth quarter, Baidu by 7.7%, while Amazon and Microsoft's cloud computing revenue grew by 19% and 31% respectively.
Alibaba will announce its financial performance next Thursday, and traders are currently increasing their bets. On Wednesday, the trading volume of Hong Kong options contracts soared to more than twice the 20-day average, reaching the highest level in over four months. The company's current forward P/E ratio is 12.2 times, lower than the five-year average of 14.6 times.
This article is driven by the AI boom, Alibaba's stock price has surged by nearly 50%, and Apple has joined hands to enter the Chinese market? First appeared in Chain News ABMedia.