Alibaba shares experienced a notable rise on Friday in Hong Kong, boosted by impressive quarterly earnings, particularly from its cloud intelligence and e-commerce sectors.

Shares of the Chinese technology titan surged up to 11%, ultimately settling 9.18% higher.

Nomura stated in a report on Friday that they anticipate a strong outlook for Alibaba’s e-commerce operations in the first half of the calendar year 2025, supported by ongoing trade-in subsidies.

In July, China unveiled a plan to channel 300 billion yuan (approximately $41.5 billion) into ultra-long special government bonds to invigorate its trade-in and equipment upgrade initiatives, aiming to enhance overall consumption.

According to Vey Sern Ling, a senior equity advisor at UBP, the recovery of domestic e-commerce growth is trending toward stability and profitability, positively impacting the overall sentiment in the broader Chinese technology sector.

Chinese tech stocks, in general, have been on a remarkable upswing since the emergence of AI startup DeepSeek, which is challenging the U.S.-led AI landscape with its R1 model, touted for its superior efficiency and significantly reduced costs.

Jack Ma, the founder of Alibaba, has kept a low profile since 2020 but recently attended a rare gathering with Chinese President Xi Jinping. During the meeting, Xi urged private enterprises to harness their capabilities and elevate their confidence in a “new era” of operations.

Alibaba faced intense scrutiny from regulators following the 2020 crackdown initiated by Beijing, which intensified when the company’s financial arm, Ant Group, was compelled to halt its planned IPO.

Alibaba is making “significant advancements” in its AI cloud sector, following the introduction of its flagship AI foundation model, Qwen 2.5-Max. Barclays noted a substantial increase in demand for AI inference, which now constitutes up to 70% of their new orders.

Barclays remarked that while there are substantial opportunities ahead, they necessitate considerable financial investment.

The next three years are expected to be a pivotal period for Alibaba, as they plan to make unprecedented investments in AI and cloud infrastructure—potentially exceeding the nearly 270 billion yuan spent over the preceding decade.

In its latest report, Alibaba announced a net income of 48.945 billion yuan (around $6.72 billion) for the quarter ending December 31, surpassing LSEG estimates of 40.6 billion yuan and tripling the 14.4 billion yuan reported during the same quarter last year.

Moreover, the company’s revenue of 280.15 billion yuan also exceeded analysts’ predictions of 279.34 billion yuan.

Following the release of these results, Alibaba’s shares in the U.S. surged by over 8% on Thursday.

— This report includes contributions from CNBC’s Ruxandra Iordache, Evelyn Cheng, and Anniek Bao.