I bought Alibaba when it rallied yesterday. Alibaba Group Holding Ltd. has seen a sharp 10% rise in its share price over the past few days, driven by renewed investor confidence in its artificial intelligence strategy and cloud computing performance. This rally comes at a pivotal moment for the Chinese tech giant, signalling a potential turning point in its post-e-commerce evolution.
The surge was sparked by Alibaba’s announcement of a new domestically produced AI chip, tailored for inference tasks across its cloud infrastructure and consumer platforms. This move is particularly significant given the recent halt in production of Nvidia’s H20 chips, which were previously central to many Chinese firms’ AI ambitions. By pivoting to a homegrown solution, Alibaba not only aligns with China’s broader push for technological independence but also positions itself as a resilient innovator in the face of tightening U.S. export controls.
Alibaba’s cloud division has emerged as the company’s growth engine, with a 26% year-over-year increase in revenue for the April to June quarter. This exceeded analyst expectations and underscored the company’s commitment to integrating AI across its services. From intelligent chatbots to open-source video generation models, Alibaba Cloud is rapidly becoming the backbone of its AI strategy. CEO Eddie Wu’s declaration that artificial general intelligence is now Alibaba’s “core mission” has further fuelled investor optimism, reinforcing the company’s long-term vision.
This momentum stands in stark contrast to the struggles of Alibaba’s domestic rivals. JD.com reported a sharp decline in profits, while Meituan’s cautious outlook triggered a $27 billion selloff across China’s e-commerce sector. In comparison, Alibaba’s diversified portfolio which includes international platforms like Lazada and AliExpress has helped buffer the impact of domestic price wars and regulatory pressures.
Alibaba June Quarter 2025 Financial Results
Adding to the bullish sentiment, Alibaba’s June 2025 quarterly results delivered a mixed but strategically promising picture. Total revenue reached RMB247.7 billion (US$34.6 billion), up 2% year-over-year. When adjusted for the disposal of Sun Art and Intime, revenue grew 10% on a like-for-like basis. Income from operations came in at RMB35 billion (US$4.9 billion), down 3% year-over-year, largely due to increased investment in Taobao Instant Commerce and user acquisition efforts.
Adjusted EBITA fell 14% to RMB38.8 billion (US$5.4 billion), reflecting Alibaba’s aggressive push into quick commerce and AI infrastructure. However, net income attributable to ordinary shareholders surged to RMB43.1 billion (US$6 billion), marking a 76% year-over-year increase, driven by gains from equity investments and the disposal of Trendyol’s local consumer services.
AI-related product revenue achieved triple-digit growth for the eighth consecutive quarter, now representing a significant portion of Alibaba Cloud’s external customer revenue. The Cloud Intelligence Group continues to be a standout performer, with robust demand for AI services fuelling accelerated growth.
Despite the dip in operating income, Alibaba’s strategic clarity and financial resilience are winning back investor trust. The company’s dual focus on consumption and AI + Cloud is not only reshaping its business model but also redefining its role in China’s tech landscape. As Alibaba continues to invest in next-gen infrastructure and consumer platforms, its share price may reflect more than just short-term momentum it may be signalling a long-term transformation.
Why I Bought Alibaba?
When I bought Alibaba stock, the share price had already rocket up. Despite Alibaba share price had rallied and an overall weak quarter financial result, I still bought Alibaba and added it to my stock portfolio. The main reason I Alibaba is because I believe there is still a lot of growth potential in Alibaba’s Cloud Intelligence business segment.
China is a large market. With the new domestically produced AI chip, Alibaba not only aligns with China’s broader push for technological independence but also positions itself as a resilient innovator in the face of tightening U.S. export controls.
Let us observe if Alibaba stock share price can continue its rally.