(Bloomberg) — The frenzy over Chinese artificial intelligence is turning Alibaba Group Holding Ltd. into an investor favorite again, injecting new life into an e-commerce giant that had nearly sunk into obscurity following a years-long regulatory crackdown.
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Alibaba’s Hong Kong-listed shares have surged 46% since hitting a 2025 low on Jan. 13, expanding its market value by nearly $87 billion and exceeding the Hang Seng Tech Index’s 25% gain in the same period. That makes the stock by far the best performer in China’s Big Tech universe in the new year, outshining rivals Tencent Holdings Ltd., Baidu Inc. and JD.com Inc.
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It marks a surprise reversal of fortunes for Alibaba, which had fallen out of favor among investors after its business suffered from Beijing’s clampdown on the country’s tech behemoths and a post-Covid consumption slump. Behind the rally is optimism about Alibaba’s efforts to develop its own AI services and platform, which gained traction after Chinese AI startup DeepSeek unveiled technologies that caused a rout on Wall Street.
Alibaba’s shares got another shot in the arm on Wednesday, after the Information reported that Apple Inc. is working with the e-commerce pioneer to roll out AI features in China.
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“The emergence of DeepSeek has sparked a new AI-related catalyst for Chinese tech stocks,” said Andy Wong, investment and ESG director for Asia Pacific at Solomons Group. “Within this space, we see Alibaba as having more tangible and well-established earnings growth prospects in the medium term.”
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Alibaba’s 2025 bounceback is the culmination of a year-long turnaround spearheaded by two of Jack Ma’s oldest lieutenants: Joe Tsai and Eddie Wu. The chairman and CEO, part of the original founding team that created Taobao in Ma’s lakeside apartment, took the helm in 2023 right after years of Beijing-led regulatory investigations and a post-Covid downturn gutted its cloud and consumer businesses. They took the company back to basics, initially focusing on consolidating and streamlining the fragmented core commerce business.
They also decided to go big in AI. Since the advent of ChatGPT, Alibaba has invested in a clutch of China’s most promising startups, including Moonshot and Zhipu. And it prioritized the expansion of the cloud business that underpins AI development, slashing prices to win back the customers that fled to rivals during the turbulent years. It also decided to spend on AI, joining a race led by Baidu at the time.
