Alibaba Group shares surged in Hong Kong on Wednesday as investors turned more optimistic ahead of the company’s upcoming earnings report.
The stock jumped as much as 12.5%, marking its biggest single-day gain since September. The rally came as traders moved back into Chinese internet stocks that had lagged behind the broader market rebound.
Alibaba’s U.S.-listed shares also climbed 10.3% in premarket trading by 04:25 ET.
Alibaba Leads Hang Seng Tech Gains
The sharp move made Alibaba one of the top performers on the Hang Seng Tech Index.
The index rose around 5%, supported by renewed interest in major Chinese technology names.
Market watchers pointed to a pre-earnings briefing with analysts as the main driver of Alibaba’s rally.
Narrowing Losses Lift Investor Sentiment
According to a report from local media outlet Jiemian, Alibaba said losses in its instant-commerce business narrowed during the June quarter.
The company also reportedly indicated that overall profitability remained stable.
That update helped ease concerns about competition in the instant-commerce market and fueled optimism ahead of Alibaba’s earnings.
Investors Rotate Into Chinese Internet Stocks
The rally also reflected a wider rotation across Asian markets.
Investors have started moving money away from chipmakers in South Korea and Taiwan, which had led much of this year’s market gains.
Instead, traders are now looking for cheaper ways to gain exposure to the artificial intelligence theme.
Chinese megacap technology stocks, which had fallen out of favor in recent months, are attracting fresh attention due to their lower valuations.
Tencent and JD.com Also Rise
Alibaba was not the only Chinese internet stock to gain.
Tencent and JD.com each rose nearly 4% as investor interest returned to the sector.
The gains showed that the rebound was not limited to Alibaba, but part of a broader move into Chinese technology shares.
Chip Stocks Face Selling Pressure
South Korea’s Kospi fell as much as 5.3% as investors pulled money from semiconductor-heavy markets.
The decline showed a shift in market leadership across Asia, with some traders reducing exposure to chip stocks after a strong rally earlier in the year.
Chinese AI Momentum Builds
Sentiment toward Chinese technology shares also improved after reports of new AI chip developments.
Reuters reported that DeepSeek is developing its own chip to power artificial intelligence systems.
The Information also reported that Zhipu is considering designing its own AI chip.
These reports added to hopes that Chinese companies could play a bigger role in the AI infrastructure race.
Chinese Stocks Seek a Rebound
Chinese equities have underperformed many North Asian markets for much of the year.
Several key Hong Kong benchmarks had also entered bear market territory due to weak confidence in e-commerce companies and concerns about China’s broader economic outlook.
Alibaba’s strong rally may now signal renewed investor interest in Chinese tech stocks, especially if upcoming earnings show improving profitability and stronger AI-related growth potential.
