Alibaba's stock has experienced a significant rally this year, with shares more than doubling, adding roughly $250 billion to its market capitalisation. This surge is largely attributed to growing investor confidence in Beijing's push for technological self-reliance and AI advancement, positioning Alibaba as a key player in China's artificial intelligence sector.
Despite this impressive growth, Alibaba's stock remains below its 2020 peak, leaving fund managers optimistic about further potential. Domestic investors have increased their stake in Alibaba, and overseas funds are showing renewed interest. Alibaba's valuation, trading at approximately 22 times its estimated forward earnings in Hong Kong, is considered attractive compared to U.S. tech peers.
Alibaba CEO Eddie Wu's plan to expand the company's AI budget over the next three years further fuels the rally. Alibaba Cloud reported strong second-quarter revenues, rising 26% and becoming the fastest-growing unit in the group. Fund managers highlight Alibaba's access to large language models, cloud scale, and advanced AI chips.
