What's Going On With Chinese Tech Stocks Like Alibaba, PDD On Thursday?

Anusuya Lahiri

September 19, 2024

Chinese e-commerce juggernaut Alibaba Group Holding (NYSE:BABA), also considered a barometer for the country's tech industry, is up in Thursday's premarket trading following the U.S. Federal Reserve lowering its benchmark interest rate to spur demand.

The U.S. Fed slashed the lending rate by 50 bps, lowering the central bank's benchmark rate to between 4.75% and 5%

Alibaba's domestic peers PDD Holdings Inc (NASDAQ:PDD), JD.com, Inc (NASDAQ:JD), and Baidu, Inc (NASDAQ:BIDU) stocks are also up.

Analysts expect the interest rate cut to drive growth in discretionary spending from U.S. companies. It could also boost Chinese companies that are invested in integrating capital-intensive artificial intelligence technology into their different businesses, including e-commerce, logistics, cloud, and more, to drive growth despite the U.S. sanctions on advanced technology.

Beaten-down Chinese electric vehicle stocks, including NIO Inc (NYSE:NIO), XPeng Inc (NYSE:XPEV), Li Auto Inc (NASDAQ:LI), and ZEEKR Intelligent Technology Holding (NYSE:ZK), are also up Thursday. AI technology is also an indispensable part of their progress.

Meanwhile, China needs help finding solutions to the U.S. technology embargo through domestic chipmakers like Yangtze Memory Technologies Co. However, Nvidia Corp (NASDAQ:NVDA) AI chips are still making their way into China via illegal routes and tweaking other countries' export rules.

Meanwhile, Alibaba's cloud unit will host its annual tech event, Aspara Conference 2024, to discuss the future of artificial general intelligence (AGI). Key speakers at the event include Alibaba and cloud unit chief Eddie Wu Yongming and XPeng founder He Xiaopeng, SCMP reports. Autonomous driving and humanoid robots will be major topics at the Aspara main forum. Moonshot AI, StepFun, and Shengshu Technology AI start-ups will likely share their large language model (LLM) experiences.

Alibaba showcased 100 open-source artificial intelligence models catering to applications and sectors ranging from automobiles to gaming and science research, CNBC cites Alibaba from the event.

The Chinese stocks got a boost earlier this week from reports indicating People's Bank of China's (PBOC) plans to cut the bank reserve requirement ratio (RRR) by 50 bps, followed by another half-point cut in the first half of 2025.

Price Actions: BABA stock is up 4.11% at $87.89 premarket at last check Thursday. PDD is up 3.27% at $101.44, JD is up 6.50% at $28.67, BIDU is up 3.40% at $87.55, NIO is up 4.78% at $5.25, XPEV is up 5.79% at $9.14, LI is up 2.75% at $21.33, ZK is up 3.63% at $15.71.

Photo via Shutterstock

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