Alibaba shares jump 19% on cloud unit acceleration, report of new AI chip

Alibaba’s Hong Kong‐listed shares surged over 19% on Monday after its cloud computing division delivered robust quarterly growth and news broke of in-house AI chip development.

This rally, elevating the stock to its highest level since March, reflects investor enthusiasm for the accelerating performance of the cloud segment and for the company’s strategic push into rapid-delivery services, known in China as “instant commerce.”

The uptick in Hong Kong built on a 13% gain in Alibaba’s New York‐listed shares following Friday’s earnings release.

For the quarter ended in June, Alibaba reported revenue of RMB 247.65 billion (USD 34.73 billion), a 2% increase year-on-year that fell short of analyst forecasts, while net income climbed 78%, comfortably exceeding expectations.

The cloud division emerged as a standout performer, posting revenue growth of 26% compared with the same period last year—a faster pace than in the preceding quarter.

Mirroring the approach of global peers such as Microsoft and Google, Alibaba has stepped up investments in AI infrastructure, model development, and cloud-based AI services, positioning the division as a key driver of future revenue.

The company noted that its AI-related offerings achieved triple-digit year-on-year revenue growth for the eighth consecutive quarter.

On the same day, CNBC reported that Alibaba is designing its own AI processor, a development that further fueled Monday’s share surge.

Meanwhile, the core e-commerce operation has shown signs of revival, aided by the roll-out of one-hour delivery options this year on its flagship online marketplace, intensifying competition in China’s quick-commerce sector.

Although investments in rapid-delivery capabilities have weighed on adjusted margins within the retail segment, investors have granted Alibaba leeway to fund these initiatives for the time being.