Baidu (BIDU) and Alibaba (BABA) led shares in Hong Kong to multi-year highs on Tuesday as investor optimism over AI and a push to drive consumption in China fueled gains. The Hang Seng index rallied 2.46% to a three-year high, driven by strong gains for technology stocks as the sector continues its solid start to the year in the wake of updates such as DeepSeek and a slew of fresh AI announcements.
Shares of internet search engine Baidu in Hong Kong (HK:9888) rallied more than 12% on Tuesday, hitting a five-month after the company released two new advanced artificial intelligence models, ERNIE 4.5 and ERNIE X1, which it claims rivals DeepSeek. U.S.-listed BIDU stock had closed 9.1% higher at a five-month peak on Monday.
Meanwhile shares of e-commerce giant Alibaba listed in Hong Kong (HK:9988) rose more than 5% after a report in the Financial Times that CEO Eddie Wu told the company’s major divisions that success will be judged on their ability to use AI to drive growth.
US-listed BABA had closed up more than 4% in New York on Monday after China’s policymakers released a plan to boost domestic consumption, at the same time as Chinese retail sales figures were better than expected.
Policy Measures Improve Sentiment
On Sunday, China announced a “Special Action Plan to Boost Consumption,” outlining plans to stabilize the real estate and stock markets, establish a childcare subsidy scheme and boost tourism and e-commerce. It also set out a goal of boosting demand through technology like AI and robotics.
On Monday, official data showed retail sales rose by 4.0% in the January-February period from a year ago, up on the 3.7% year-on-year in December 2024 and a three-month low of 3.0% in November.
Elsewhere, BYD (BYDDF) rose to a record high after the EV maker launched a new battery it claims can be recharged in five minutes. Its Hong Kong-listed shares (HK:1211) rose over 4%. Shares of WuXi AppTeh (HK:2359) jumped 10% after the pharmaceutical company issued an improved 2025 outlook.
What Is the Best Chinese Stock to Buy?
For investors interested in investing in Chinese stocks like BABA and BIDU, we have rounded up the best stocks that analysts are bullish about using the TipRanks Stocks Comparison tool. On this tool, BIDU’s Smart Score is 7, while BABA scores a 10.
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