Alibaba Group Holding’s shares jumped more than 12% in Hong Kong with investor optimism fueled by expectations of accelerating revenue in the June quarter, boosted by artificial intelligence offerings, chip production, and reduced losses in its food delivery business.
- June quarter revenue forecast raised to 9%, driven by AI and cloud growth
- T-Head chip unit and cloud businesses valued close to Alibaba’s market cap
- Food delivery losses shrinking amid regulatory pressures and subsidy bans
What happened
Alibaba’s shares rose sharply by 12.2%, closing at HK$107.5, marking the company’s biggest jump this year in the Hong Kong market. This followed analyst reports from Jefferies and UBS predicting a significant revenue acceleration for the June quarter driven by AI adoption, cloud computing growth, and improved margins in core e-commerce operations.
Analysts highlighted Alibaba’s T-Head chips and AI model services as particularly valuable assets, with UBS estimating the Qwen AI model series and chip unit contribute tens of billions of US dollars in valuation. The company’s cloud business is also projected to grow revenue by 45% in the quarter, while the instant commerce segment is expected to narrow losses significantly.
Why it matters
This rebound is a strong turnaround from the slower 3% revenue growth recorded in the previous quarter and signals increasing investor confidence in Alibaba’s strategic pivot toward AI technology and cloud infrastructure. The growth outlook bolsters the company’s path to profitability in areas previously seen as cost centers, such as food delivery.
The narrowing losses in food delivery are attributed to regulatory bans on long-term subsidies and tighter market controls in China, which encourage more sustainable business practices. These improvements could help Alibaba halve food delivery losses in the next two financial years and potentially reach profitability by 2029, according to independent research.
What to watch next
Investors will closely watch Alibaba’s official June quarter earnings release in August for confirmation of these optimistic forecasts, especially the performance of its cloud and AI services. Progress in reducing losses within the instant commerce and food delivery segments will be a key sign of underlying operational improvements.
Additionally, how Alibaba navigates China’s regulatory environment and maintains momentum in AI development and proprietary chip advancement will be critical to sustaining growth and delivering shareholder value. Continued innovation in AI-driven products powered by T-Head chips could position Alibaba as a dominant player in both domestic and global markets.