Alibaba Stock Soars 19% as Cloud Unit Growth and New AI Chip Plans Boost Investor Confidence

Alibaba’s Hong Kong-listed shares skyrocketed over 19% on Monday, marking their highest level since March, after strong momentum from its cloud computing business and reports of progress on a new AI chip. The rally follows a nearly 13% surge in Alibaba’s U.S.-listed shares last Friday after its earnings release.

For the June quarter, the Chinese tech giant reported revenue of 247.65 billion yuan ($34.73 billion), a modest 2% year-on-year increase that came in below analyst estimates. However, net income surged 78%, beating expectations and fueling optimism.

Alibaba’s cloud division stood out with a 26% annual revenue increase — faster than the prior quarter — highlighting accelerating demand. The company has been ramping up investments in artificial intelligence, building its own models and selling AI services through its cloud arm, positioning it as a key driver of future growth. AI-related products also maintained triple-digit revenue growth for the eighth straight quarter.

Investors were further encouraged by news of Alibaba developing a next-generation AI chip, which strengthened confidence in its long-term tech strategy. Meanwhile, its core e-commerce operations are showing recovery, even as the company pours resources into China’s fiercely competitive instant commerce market through Taobao’s one-hour delivery service. These investments have weighed on short-term earnings but are viewed as a strategic move to capture future market share.