Alibaba shares surge 12% in Hong Kong on AI and chip optimism
In Hong Kong, Alibaba's stock surged by 12%, fueled by positive sentiment regarding its T-Head chips and anticipated AI earnings. UBS and Jefferies analysts forecast a revenue increase for the company, predicting growth to rise to 9% in the June quarter, compared to 3% in the prior quarter. UBS highlighted improvements in e-commerce margins, reduced losses in food delivery, and a boost in cloud services. Kenneth Fong and his team at UBS suggested that the market may shift its focus to Alibaba's AI capabilities. They anticipate a 45% revenue increase for Alibaba's cloud division in the June quarter, with annual recurring revenue from AI model services expected to hit 10 billion yuan (US$1.5 billion). Alibaba, which owns the South China Morning Post, usually announces its June quarter results in August.
Key facts
- Alibaba shares spiked 12% in Hong Kong.
- UBS and Jefferies project 9% revenue growth for June quarter.
- Previous quarter growth was 3%.
- UBS cited margin improvements in e-commerce and cloud growth.
- Alibaba's cloud unit expected to grow 45% in June quarter.
- AI model services ARR projected at 10 billion yuan (US$1.5 billion).
- Alibaba owns the South China Morning Post.
- June quarter results typically released in August.
Entities
Institutions
- Alibaba
- UBS
- Jefferies
- South China Morning Post
Locations
- Hong Kong
- China