The frenzy over Chinese artificial intelligence is turning Alibaba Group Holding Ltd. into an investor favorite again, injecting new life into an e-commerce giant that had nearly sunk into obscurity following a years-long regulatory crackdown.
Reuters
Alibaba’s Hong Kong-listed shares have surged 46% since hitting a 2025 low on January 13, expanding its market value by nearly $87 billion and exceeding the Hang Seng Tech Index’s 25% gain in the same period. That makes the stock by far the best performer in China’s Big Tech universe in the new year, outshining rivals Tencent Holdings Ltd., Baidu Inc. and JD.com Inc.
It marks a surprise reversal of fortunes for Alibaba, which had fallen out of favor among investors after its business suffered from Beijing’s clampdown on the country’s tech behemoths and a post-Covid consumption slump. Behind the rally is optimism about Alibaba’s efforts to develop its own AI services and platform, which gained traction after Chinese AI startup DeepSeek unveiled technologies that caused a rout on Wall Street.
Alibaba’s shares got another shot in the arm on Wednesday, after the Information reported that Apple Inc. is working with the e-commerce pioneer to roll out AI features in China.
“The emergence of DeepSeek has sparked a new AI-related catalyst for Chinese tech stocks,” said Andy Wong, investment and ESG director for Asia Pacific at Solomons Group. “Within this space, we see Alibaba as having more tangible and well-established earnings growth prospects in the medium term.”
Alibaba’s 2025 bounceback is the culmination of a year-long turnaround spearheaded by two of Jack Ma’s oldest lieutenants: Joe Tsai and Eddie Wu. The chairman and CEO, part of the original founding team that created Taobao in Ma’s lakeside apartment, took the helm in 2023 right after years of Beijing-led regulatory investigations and a post-Covid downturn gutted its cloud and consumer businesses. They took the company back to basics, initially focusing on consolidating and streamlining the fragmented core commerce business.
They also decided to go big in AI. Since the advent of ChatGPT, Alibaba has invested in a clutch of China’s most promising startups, including Moonshot and Zhipu. And it prioritized the expansion of the cloud business that underpins AI development, slashing prices to win back the customers that fled to rivals during the turbulent years. It also decided to spend on AI, joining a race led by Baidu at the time.
In January, that effort yielded initial fruit. Alibaba published benchmark scores showing its Qwen 2.5 Max edition scored better than Meta Platforms Inc.’s Llama and DeepSeek’s V3 model in various tests. The company is now considered a leading player in AI alongside big names from Tencent to ByteDance Ltd. and startups including Minimax and Zhipu.
A key hurdle facing Chinese AI firms has been the slower adoption and lack of willingness to pay for services among domestic consumers and businesses. “Many hedge funds and long-only investors see AI as a potential inflection point for Alibaba, with some expressing interest in understanding the valuation of Alibaba’s cloud business and any upside from large language models,” JPMorgan Chase & Co. analysts including Alex Yao wrote in a note. “The AI narrative is seen as a driver for potential re-rating, but there are concerns about the monetization of AI capabilities.”
In addition, cloud business growth for Chinese hyperscalers has lagged that of major US peers so far. Analysts estimate cloud revenues for the December quarter rose 9.7% from a year ago at Alibaba and 7.7% at Baidu, compared with 19% at Amazon.com Inc. and 31% at Microsoft Corp.
Alibaba’s financial results scheduled next Thursday are expected to offer investors a fresh opportunity to learn about the company’s progress on its AI models and outlook for its cloud services.
Despite the lingering question marks, Alibaba’s valuations remain attractive to some investors even after the latest rally. Its shares are trading at 12.2 times forward earnings, below its five-year average of 14.6 times.
“Despite the rally, Alibaba’s stock is still undervalued compared to its US tech peers, considering its growth potential and market position,” said Manish Bhargava, chief executive officer at Straits Investment Management in Singapore. “The company is expanding its overseas marketplaces, which could reduce its reliance on the domestic Chinese market and drive future growth.”
New York-based management firm Authentic Brands Group announced on Wednesday a new partnership with Unified Accessories for Izod belts and small leather goods.
Authentic inks partnership with Unified for Izod accessories. – Authentic
Under the agreement, Unified will be tasked with the design, production and distribution of a new collection of men’s belts, wallets and leather accessories. The collection will merge Izod’s signature American style with Unified’s expertise in crafting high-quality accessories.
“Izod is a celebrated brand with a strong connection to its heritage. We’re excited to continue to grow its lifestyle offerings in partnership with Unified,” said Jean Fei, senior vice president, active and classic brands – lifestyle at Authentic. “Unified’s expertise and commitment to quality perfectly aligns with the brand’s core values. We look forward to working together to bring these products to life.”
The product line is set to launch in Fall 2025 and will be available through multiple retail channels, including department stores, specialty retailers, and online platforms across the United States.
“We are proud to partner with Authentic to bring Izod’s style into the men’s accessories market,” added Scott Weiner, senior vice president of sales at Unified Accessories. “This collection reflects our shared commitment to quality craftsmanship and will connect with consumers seeking both style and function.”
Earlier this year, Authentic announced a new partnership with K9 Wear for the manufacturing and distribution of pet apparel for its Izod brand. Authentic acquired the Izod brand from U.S. fashion giant PVH Corp, in late 2021, along with fellow heritage brands Van Heusen and Arrow.
Intimates and apparel manufacturer and marketer Delta Galil Industries, Ltd. reported record full year sales of $2.05 billion on Tuesday, on the back of a strong fourth quarter.
Delta Galil reports record $2 billion sales in 2024. – Delta Galil
The Tel Aviv, Israel-based company, which owns labels such as 7 For All Mankind, Schiesser and Eminence, and holds licenses for brands including Wilson, Columbia and Tommy Hilfiger, said fourth quarter sales increased 18% to $599.2 million, driven by growth in all segments, channels and geographies.
For the fourth quarter and year ended December 31, online sales of the company’s brands increased 22% and 21%, respectively.
Net income in the fourth quarter of 2024 was $29.5 million, compared to $37.8 million in the same period last year. Diluted earnings per share, increased 9% to $1.43 in the fourth quarter of 2024 compared to $1.31.
Net income in the full year 2024 increased 11% to $94.6 million, compared to $85.3 million in 2023. Diluted earnings per share, increased 18% to $3.82 compared to $3.25 in the same period last year.
“Delta’s strong fourth quarter financial results produced a record year of sales and robust profitability, reflecting our team’s resilience, creativity, and dedication inachieving excellent results,” said Isaac Dabah, CEO of Delta Galil.
“For the full year, I am proud to report that we exceeded our 2024 sales and EBITDA guidance, as we grew sales by 10% to over $2.0 billion, produced a record gross margin of 41.9% and expanded net income by 18% to $109 million. This performance generated strong operating cash flow excluding IFRS 16 of $153 million for the full year 2024. Strong profitability and operating cash flow also allowed us to return a record $33 million of dividends back to our shareholders, a 24% increase over the prior year.”
Looking ahead, the company expects 2025 full year sales to jump 4% to 6% reaching $2,118 to $2,165 million.
Shopify posted its best quarterly revenue growth in three years on Tuesday, as healthy consumer spending and the e-commerce company’s efforts to load its platform with AI features for sellers helped drive strong holiday sales.
Reuters
The Canadian company’s shares, however, were down about 2% in early trading as investors fretted over its weaker-than-expected current-quarter profit forecast.
Shopify has been investing heavily in building out AI-based tools that help its merchants with tasks ranging from image generation to inventory management, offering its ‘Shopify Magic’ suite of AI features across all subscription tiers for free.
Coupled with strong consumer spending online over the holiday season, the AI initiatives helped Shopify attract hundreds of merchants and also drove its revenue 31% higher from a year earlier to $2.81 billion in the fourth quarter, above analysts’ estimates of $2.73 billion according to data compiled by LSEG.
But Shopify’s investments into tech and expansion along with its partnership with companies such as PayPal are causing worries around margin growth. The company saw higher cloud and infrastructure hosting costs in the fourth quarter, CFO Jeff Hoffmeister said on a post-earnings call.
While the cost increase is not expected to have as much of an impact in the coming quarters, the company plans to invest heavily in research and development, marketing and into expansion in newer markets, Hoffmeister added.
Shopify expects gross profit dollars to grow at a low-twenties percentage rate in the current quarter, weaker than the 24.2% growth expected by analysts according to Visible Alpha.
“Investors may be pausing because of the profitability guidance… Shopify has been able to grow margins very substantially the last couple of years and investors want to make sure that there’s not any backsliding,” said D.A. Davidson analyst Gil Luria.
Shopify’s outlook for operating expense as a percentage of revenue to be 41% to 42% was also higher than expectations, Luria added.
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