US Listed China Stocks Rally: Alibaba's Performance, President Xi's Support, DeepSeek AI Boost Investor Confidence

U.S. listed Chinese stocks led by e-commerce and gaming giants like Alibaba Group Holding BABA, Baidu Inc BIDU, PDD Holdings PDD, JD.Com Inc JD along with electric vehicle companies NIO Inc NIO, Li Auto Inc LI, XPeng Inc XPEV are trading higher on Friday.

Chinese tech barometer Alibaba reported its upbeat quarterly results, adding to the Chinese market rebound, which the property market selloff and economic slowdown have hit.

Also Read: Muddy Waters’ Carson Block Warns Against Chinese Stocks Despite Recent Market Surge: Report

Alibaba reported fiscal third-quarter 2024 revenue growth of 8% to $38.38 billion, topping the analyst estimate of $38.19 billion. Adjusted earnings per ADS of $2.93 beat the consensus estimate of $2.66. Adjusted net income rose 7% Y/Y to $7 billion.

Alibaba expects its international e-commerce unit to turn profitable next fiscal year and plans to spend more on Cloud and AI over the next three years than in the past decade.

Also, Reuters cited a Friday post by Chinese AI startup DeepSeek stating that it plans to make its models’ code publicly available.

DeepSeek’s affordable AI model promises and Beijing’s support for private firms have prompted Chinese companies, mainly in the tech sector, to raise funds overseas, Reuters cites bankers.

Two tech companies raised $500 million this week alone, with more gearing up to raise capital via offshore equity sales.

Chinese video streaming platform iQIYI Inc IQ raised $350 million on Thursday, and Hong Kong-listed auto chip maker Black Sesame raised $160 million.

Adding to the positive momentum, China’s President Xi Jinping met with tech business leaders, including Jack Ma, the founder of e-commerce juggernaut Alibaba, and Liang Wenfeng, the founder of DeepSeek.

Li He of Davis Polk told Reuters about a solid pipeline of IPO candidates, particularly in tech, healthcare, and consumer sectors. Besides secondary market deals, IPOs by Chinese companies, particularly in Hong Kong, will likely pick up pace.

Appaloosa Management’s David Tepper raised his bets on China-related stocks, including Alibaba, Baidu, and PDD and exchange-traded funds (ETFs) last quarter.

Investors can gain exposure to Chinese equities through KraneShares Trust KraneShares CSI China Internet ETF KWEB and iShares China Large-Cap ETF FXI.

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