Alibaba Group stock gained in Friday trading to retake a key short-term investor support level. The Chinese e-commerce and cloud-computing giant will report earnings for its June quarter next Friday.
Alibaba stock gained more than 3% to 122.47 in recent action on the stock market today. It is a strong day overall for U.S.-listed shares of Chinese tech firms. Search giant Baidu, Temu parent company PDD Holdings and Alibaba's e-commerce rival JD.com were all trading higher, as were over-the-counter shares of WeChat parent company Tencent Holdings.
The gains follow the launch of a new AI model from DeepSeek, which the Chinese startup said is optimized to run on domestic-made computing chips. Concern that U.S. curbs on advanced processors will slow AI efforts at Chinese companies has weighed on shares of the country's tech firms.
U.S. markets also got an overall boost from a speech from Federal Reserve Chairman Jerome Powell that indicated the Fed is preparing to lower borrowing costs.
Separately, an Alibaba-backed smart-car technology company called Banma is planning to list its shares on the Hong Kong Stock Exchange, CNBC reported.
Alibaba stock has gained more than 40% this year. But its rally has slowed, with shares sitting below a 52-week high from March amid concerns about a U.S.-China trade war.
The gains early Friday powered Alibaba stock back above its 21-day moving average. Shares are hovering near a cup-with-handle buy point of 123.99, according to IBD MarketSurge.
Alibaba Stock Earnings Preview
The next big test for Alibaba comes early Friday, Aug. 29, when it reports fiscal first-quarter earnings. Analysts polled by FactSet project that Alibaba's earnings will decrease 6% year-over-year to 15.52 yuan per American depositary share, or $2.16 per share.
Sales are seen rising 5% overall to 255.2 billion yuan, or $35.5 billion. That would mark a slight step-down from Alibaba's 6% growth in its March-ended quarter.
That growth includes a projection that Alibaba's cloud revenue increased 20% for the June quarter, according to FactSet. As China's top cloud services provider, Alibaba has been moving quickly to roll out AI services. That includes updates to it Qwen AI large language models. The tech giant has pledged to spend more than $50 billion over the next three years on AI-related infrastructure for its cloud business.
With China's overall economy still wobbly, Alibaba's e-commerce division is facing stepped-up competition for consumer spending. That included a heated battle with rival JD.com for on-demand food delivery. JD stock fell last week when it posted a sharp decline in Q2 earnings, despite its strongest revenue growth in several years.
Mizuho analyst Wei Fang said in a July 24 client note that "increased competition in local commerce, mainly food delivery, is weighing on margins for all major players including Alibaba and JD."
Meanwhile, Alibaba stock has an IBD Composite Rating of 95 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one.
