Alibaba shares led a rally in Chinese technology stocks ahead of the company's June-quarter results, with investors watching instant-commerce losses and artificial intelligence growth for signs of improving profitability.
Alibaba Group's American depositary shares had gained sharply in the trading session described in the supplied report, while Baidu, JD.com and PDD Holdings also advanced. The move reflected a broader rotation towards Chinese technology stocks after weakness in South Korean and Taiwanese chipmakers, according to the supplied source.
The immediate catalyst for Alibaba was a pre-earnings briefing that indicated losses in its instant-commerce business had narrowed. The business had been a major drag on profitability, making any improvement important for investors assessing whether Alibaba's heavy investment in rapid delivery could begin producing better financial returns.
Alibaba's previous fiscal fourth-quarter results showed the scale of the pressure. Adjusted earnings before interest, taxes, depreciation and amortisation fell 84% to $740 million, while the company recorded a $123 million operating loss in the relevant business, according to the supplied report.
Artificial intelligence and cloud computing remain another major part of the Alibaba investment case. The supplied report said Cloud Intelligence Group revenue had increased 38% in the previous quarter and AI-related product revenue accounted for 30% of external cloud revenue for the 11th consecutive quarter of triple-digit growth.
Alibaba's focus on AI also comes as Chinese technology companies expand their cloud and computing businesses. Baidu reported first-quarter AI Cloud Infrastructure revenue of RMB 8.8 billion, up 79% year on year, while GPU Cloud revenue increased 184%, according to the company's results.
Baidu's broader AI-powered business generated RMB 13.6 billion in first-quarter revenue, an increase of 49% from a year earlier. The company said AI-powered businesses accounted for 52% of Baidu General Business revenue, up from 36% in the first quarter of 2025.
JD.com also entered the rally with a relatively strong retail profitability position. The company reported first-quarter revenue of RMB 315.7 billion ($45.8 billion), up 4.9% year on year, while JD Retail's operating margin improved to 5.6% from 4.9%.
PDD Holdings, which operates Pinduoduo and Temu, was another Chinese e-commerce stock affected by the broader market move. The supplied report attributed the gains across Baidu, JD.com and PDD Holdings mainly to investor rotation and valuation rather than fresh company-specific announcements.
Alibaba's next earnings report is the key test for the rally. The company's investor-relations calendar currently says it will announce its June-quarter 2026 results on August 20, rather than August 17 as stated in the supplied article. The results will therefore provide a direct test of the market's expectations around cloud growth and instant-commerce losses.
The broader Chinese technology rally remains exposed to macroeconomic and regulatory risks, while the competitive intensity in instant commerce continues to weigh on margins. The earnings report will show whether Alibaba's recent investment spending is beginning to translate into improved operating performance.
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