Alibaba surges 52% in September as AI push makes it China’s top tech stock

Alibaba Group Holding Ltd has emerged as the best-performing technology stock in China this month, with its Hong Kong-listed shares soaring 52% in September on the back of renewed investor confidence in its artificial intelligence strategy.

The $420 billion internet major has outpaced peers on the Hang Seng Tech Index, reversing months of sluggish sentiment linked to intense price competition in China’s food-delivery sector. The latest rally was triggered by announcements of increased AI investment and a new partnership with Nvidia Corp, which fueled optimism across China’s tech sector.

Market data show a sharp rise in bullish options activity on Alibaba stock, while mainland investors poured HK$61 billion ($7.8 billion) into the company’s shares this month through trading links with Hong Kong — the highest monthly inflow this year.

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Analysts say the shift in investor perception is significant. “It was obvious that Alibaba’s valuations were low in 2022-2023, but investors needed a catalyst — that catalyst has emerged, its potential in AI,” said Jian Shi Cortesi, fund manager at GAM Investment Management. Increasingly, the company is being viewed more as an AI and cloud infrastructure player than merely an e-commerce giant.

Morgan Stanley analysts called Alibaba “the best AI enabler in China” after attending its AI conference in Hangzhou. They noted that its Qwen3-Max model ranks among the world’s top three large language models, rivalling GPT-5 and Claude Opus 4.

Despite the rally, Alibaba’s shares remain attractively valued, trading at around 20 times estimated forward earnings — below Amazon’s 25x and Microsoft’s 30x. “Among the large cloud players in China, they are also the most aggressive,” said Xin-Yao Ng, fund manager at Aberdeen Investments, adding that Alibaba’s spending on AI surpasses Tencent and Baidu.

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While short interest in Alibaba’s US-listed shares has climbed to its highest level in more than five years, the stock continues to attract strong bullish bets as investors wager on its role in China’s AI race.