Yesterday (15th), the S&P 500 and Dow Jones declined, but the Nasdaq reached a record high. The gain was largely driven by Nvidia, which rose 4% after the U.S. government approved resumed chip sales to China, boosting the broader tech sector.
Interestingly, as Nvidia gained 4%, one Big Tech company jumped even higher—8%.
One-Week Snapshot: China's AI Giants
Alibaba ADR (BABA) rose approximately 8.1% yesterday (15th). It wasn't alone—other U.S.-listed Chinese tech giants, including Tencent (TCEHY) and Baidu (BIDU), joined the surge. The common denominator? AI.
At SellSmart, we're focused specifically on Alibaba.
Globally recognized for e-commerce platforms like Taobao and AliExpress, Alibaba’s primary growth drivers—often overlooked by investors—are AI and cloud computing.
Alibaba recently announced plans to invest approximately 380 billion yuan (around $53 billion) into cloud and AI infrastructure over the next three years, strategically expanding beyond e-commerce into logistics and fintech.
In March, Alibaba released its open-source chatbot "QwQ-32B," followed in June by "Qwen VLo," a multimodal AI model enabling image generation—clear signals of aggressive moves into AI innovation.
Year-to-Date Returns for China’s Big Tech AI Trio
The standout from Alibaba's Q1 2025 earnings was its rapidly growing Cloud Intelligence segment. Revenue jumped 18% year-over-year to 30.13 billion yuan, surpassing market expectations (29.9 billion yuan). Most notably, AI-driven revenue maintained triple-digit growth for the seventh consecutive quarter, underscoring Alibaba’s accelerating competitiveness in AI infrastructure and solutions.
While overall revenue slightly missed forecasts—totaling 236.45 billion yuan versus 239.7 billion expected—adjusted EBITA came in strong at 32.62 billion yuan, exceeding market consensus (31.85 billion yuan).
Apple needs AI capabilities to remain competitive in China but can only integrate AI approved by Chinese regulators into its "Apple Intelligence" ecosystem.
On June 16, just four months after announcing their partnership, Alibaba released its Qwen-3 model optimized for Apple’s MLX machine learning framework. This positions Alibaba’s Qwen-3 to expand its AI footprint across China’s entire Apple ecosystem—including iPhones, iPads, and MacBooks.
Qwen-3, announced on April 29 this year, is Alibaba’s latest large language model (LLM).
Its largest variant, Qwen-3-235B, outperformed models such as OpenAI’s o1, o3-mini-medium, DeepSeek R1, and Grok 3-Thinking in benchmark tests.
The smaller Qwen-3 30B-A3B model demonstrated benchmark performance surpassing Gemma3, Deepseek-v3, and GPT-4o.
Trained on roughly 36 trillion tokens and supporting 119 languages, Qwen-3 leverages a hybrid thinking mode—carefully processing complex tasks for greater accuracy, and rapidly responding to simpler queries, significantly boosting efficiency.
China's cloud infrastructure services are dominated by Alibaba, Huawei, and Tencent, holding market shares of 33%, 18%, and 10%, respectively. Alibaba’s cloud-related revenues grew by 15% year-over-year, while Tencent faced stagnation due to GPU supply constraints and internal prioritization of AI chips.
Alibaba is expanding its regional infrastructure, opening its third data center in Malaysia in early July, with plans to launch a second data center in the Philippines by October—addressing growing AI demand across Southeast Asia.
Wrapping Up
The resumed exports of Nvidia’s H20 chips to China present a pivotal momentum boost for Alibaba, which is strategically centering its growth around AI and cloud infrastructure. With Qwen-3 now integrated into Apple's ecosystem, Alibaba is positioned to gain significant ground in China's AI leadership race.
In an environment marked by technological regulation and geopolitical tension, Alibaba’s dual focus on strong financial results and global partnerships makes it a company to watch closely.
