Alibaba’s Share Drop Signals Waning AI Optimism in China:
Alibaba’s shares plummeted on Friday, marking their steepest single-day decline in over a month, as disappointing earnings dimmed hopes for the e-commerce giant’s AI leadership. JD.com and Tencent also reported strong revenue growth but faced weekly stock losses amid a stalling tech rally.
China’s initial AI enthusiasm is fading, with market expectations outpacing reality, said Charu Chanana of Saxo Markets. Weak domestic spending and fragile demand are dragging on the sector, despite tech firms’ reliance on mainland sales. Competition is intensifying, with JD.com challenging Alibaba and Meituan in food delivery and one-hour shipping.
Alibaba’s edge in commercializing DeepSeek’s AI has driven its outperformance, but monetization remains distant. Analysts seeking clear AI revenue timelines from Alibaba, Tencent, and JD received vague promises of enhanced advertising and shopping experiences. Tencent downplayed concerns over Nvidia chip shortages, but U.S. restrictions on high-end chips continue to cloud AI investment plans. Investors urge patience as China’s tech giants integrate AI, backed by Beijing’s push to rival global leaders like OpenAI and Google.