Alibaba slips into Monday: China's PMI shock and AI chip access set the tone
Alibaba's U.S.-listed shares (BABA) fell 2.7% Friday to $169.56, extending a two-day slide as traders reassessed growth risk in China and the U.S. Roughly 10.8 million shares changed hands on Nasdaq.
Broader momentum cooled too. The Nasdaq fell 0.94% and the S&P 500 slipped 0.43% as investors weighed policy headlines and macro uncertainty, according to Reuters.
Why this matters now
China's official manufacturing PMI dropped back into contraction at 49.3 in January from 50.1. Services and construction (non-manufacturing) also slipped to 49.4. Officials flagged weak demand, and Nomura's Ting Lu said policymakers may need to do much more to keep growth above 4.5% this year.
Compute is the other pressure point. Reuters reported DeepSeek has conditional approval to buy Nvidia's H200 chips, and that ByteDance, Alibaba, and Tencent have been allowed to purchase more than 400,000 H200s in total, pending conditions from the National Development and Reform Commission. Nvidia's Jensen Huang said he hadn't heard this and believed China was still working on the license.
Alibaba as a signal
Alibaba often mirrors China's online consumer activity-ad budgets, discretionary spend, merchant health. When growth cools, the stock trades more like a macro indicator than a single-company story.
The chip angle matters for cloud. Demand for AI tools is strong, but capacity depends on top-tier processors. Any delay, supply squeeze, or tighter rules can cap near-term throughput. Meanwhile, JD.com and PDD keep pushing on price and delivery speed, forcing platforms to spend to hold traffic and merchants.
What to watch next week
- China's data calendar as markets reopen Monday. A private-sector PMI is due Feb. 2, per earlier reporting.
- U.S. January employment report on Feb. 6 at 8:30 a.m. ET, a frequent catalyst for yields and growth stocks. BLS release schedule
- Alibaba earnings on Feb. 19: updates on demand trends, cloud momentum, and spending priorities.
Risk setup
- Softer domestic demand weighs on volumes and ad revenue.
- Policy shifts can disrupt chips, cross-border activity, and investor confidence.
- For China tech, negative shocks often show up in headlines before guidance changes.
Practical takeaways
- Investors: Track PMI momentum and any confirmed chip approvals or conditions. Be precise with position sizing into the Feb. 19 earnings date and major macro prints.
- Finance leaders (merchants/brands): Stress-test ad budgets and promo ROI under weaker traffic. Expect sticky price competition and potential delivery subsidies.
- Cloud/AI engineers: Plan for constrained H200 availability. Build contingencies: model optimization (quantization, pruning), efficient inference, and alternate compute where feasible.
- Developers/startups: Right-size workloads and choose regions/vendors with shorter lead times. Keep a multi-cloud playbook ready if chip supply tightens.
Context that could move sentiment
Friday's pullback in U.S. growth stocks, policy uncertainty, and China's contractionary prints are feeding into risk appetite. For Alibaba, the near-term setup is a mix of macro demand, compute access, and execution on cloud and commerce.
Helpful resources
- Stay current on U.S. jobs data: BLS Employment Situation
- Skill up for AI-driven projects across roles: Complete AI Training - Courses by Job
Your membership also unlocks:
