Alibaba jumped 15% in the Hong Kong market on Friday, marking the highest level since October 2021. The e-commerce giant's core business recovery, AI-supported cloud services gaining steam, and GME Chairman Ryan Cohen's $1 billion bet drove the surge. The stock translates to another 5% rise from its close in the U.S. market on Thursday.

The Chinese tech just reported revenue of 280.15 billion yuan ($38.58 billion) for the three months ended December 31, an 8% year-over-year increase. Net income was 48.945 billion yuan ($6.72 billion), a 239% surge from a year ago. Cloud revenue growth reignited to double digits at 13%, with AI-related product revenue achieving triple-digit growth for the sixth consecutive quarter.

The company also committed to aggressively investing in AI, pursuing the goal of artificial general intelligence. Eddie Wu, CEO of Alibaba Group, said that investments in AI over the next three years would exceed those made over the last decade.

Alibaba became the target of a major regulatory crackdown by Beijing, which began in 2020 when the company's financial technology affiliate Ant Group was forced by regulators to cancel its initial public offering. The parent company also faced anti-monopoly allegations, leading to a free-fall in its stock price.

However, macroeconomic fatigue and the AI spotlight have facilitated a comeback by the Chinese government. Jack Ma, the founder of Alibaba, who has remained largely out of the spotlight since 2020, participated in a rare private meeting hosted by Chinese President Xi on Monday. During the session, Xi encouraged private businesses to display their abilities and boost their confidence in a new era for their operations.

In January, Alibaba open-sourced the new generation multimodal model Qwen2.5-VL and launched the flagship model Qwen2.5-Max based on the MoE architecture, achieving leading positions in multiple authoritative benchmark evaluations. The Tongyi Qianwen Qwen model family has become one of the largest AI model families globally. As of January 31, 2025, the number of derivative models developed based on the Qwen model family on Hugging Face has exceeded 90,000.

Meanwhile, Apple and Alibaba have collaborated to bring the latter's AI service to Chinese iPhones, further enhancing its AI model's advantages.

GameStop CEO and billionaire investor Ryan Cohen, who triggered a historical meme mania on Wall Street back in 2021, also aggressively increased his personal stake in Alibaba. He now owns roughly 7 million shares worth about $1 billion, The Wall Street Journal reported Thursday.

Citing people familiar with the matter, the Journal said the sizable stake in Alibaba is a bullish bet on China's economic growth in the long run.

Analysts also praised Alibaba's current movements. We expect the outlook for BABA's e-commerce business to remain strong in the first half of 2025, driven by continued trade-in subsidies, Nomura said in a note on Friday.

The next three-year period will likely be the single period in which Alibaba makes the most concentrated investment in AI and cloud infrastructure build-out, Barclays' analysts noted.