Alibaba Stock Surges as Investors Bet Big on AI Expansion

Alibaba Group Holding Ltd. (BABA) shares rallied more than 7% in Hong Kong trading, marking their strongest gain in two weeks. The stock has now surged over 80% year-to-date as investors cheer the company's aggressive push into artificial intelligence infrastructure.

The Chinese tech giant raised $3.2 billion through convertible bonds this week to fund AI infrastructure projects and cloud platform development. Alibaba simultaneously unveiled upgraded versions of its Qwen AI models, positioning itself against competitors like DeepSeek and OpenAI.

Market sentiment received another boost from reports that Alibaba and Baidu (BIDU) have begun using proprietary chips for AI model training, reducing dependence on Nvidia's (NVDA) expensive processors. Baidu shares climbed nearly 13% on the news.

"With in-house chip production capabilities, Alibaba is creating multiple growth engines," said Paul Pong of Pegasus Fund Managers. The strategic shift toward AI development appears to be reshaping investor perception of the e-commerce giant.