To The Moon

Hong Kong stocks experienced a significant rally on July 8th, with the Hang Seng Index closing up 2.99% at 24,199.46 points. The Hang Seng Tech Index surged 4.97%, and the Hang Seng China Enterprises Index rose 4.04%. The total market turnover was HK$375.84 billion, an increase from the previous session's HK$319.71 billion. Southbound capital recorded a net purchase of HK$14.2 billion. While the biotech sector continued its adjustment phase, the technology and internet sector saw a powerful breakout.

Alibaba Group Holding Ltd (BABA) shares soared 12.21%, with Xiaomi Corporation and Kuaishou Technology also posting strong gains of 9.52% and 8.70% respectively, leading the blue-chip advancers. Within the Hang Seng Tech Index, 27 constituent stocks rose, with only two declining.

Alibaba's Significant Leap

Alibaba staged a powerful surge, jumping as much as 13.78% intraday before closing at HK$107.50 per share, marking its largest single-day gain since September and making it one of the top performers in both major indices. Analysis from Zhongtai Securities highlighted that following its organizational restructuring in August 2025, Alibaba has strategically focused on a technology platform centered on "AI + Cloud" for new growth and a major consumption platform integrating shopping and lifestyle services for its core business and cash flow.

The report noted that Alibaba's traditional e-commerce operations remain robust, with instant retail expanding into new scenarios and user bases. Its AI business line has achieved a full-stack layout spanning from computing hardware and cloud services to large models and AI applications, supported by an organizational structure centered on ATH. Zhongtai Securities forecasts that driven by growing demand for AI computing power and MaaS services, Alibaba Cloud revenue will maintain rapid growth, reaching RMB 220.1 billion and RMB 297.1 billion in fiscal years 2027 and 2028, respectively. The firm projects adjusted net profits of RMB 93.0 billion, RMB 135.7 billion, and RMB 170.0 billion for fiscal years 2027 through 2029.

Zhongtai Securities issued a "Buy" rating for Alibaba, estimating a combined valuation for its core China commerce and cloud businesses at approximately RMB 2.4 trillion (about HK$2.7 trillion), which is higher than its market capitalization of around HK$2.1 trillion at the close.

Broad-Based AI Application Rally

The rally extended across the AI application sector. Among Wind's Hong Kong concept sector indices, the top gainers were predominantly related to AI applications, indicating broad-based investor interest beyond just Alibaba. Other companies like Kingsoft Cloud Holdings Ltd, Zhipu AI, Sensetime Group Inc, and MINIMAX also recorded double-digit percentage gains.

Financial institutions have recently indicated that the next phase of AI investment opportunities is extending from core hardware to application monetization. Conan Chuang, Chief Investment Officer for China at HSBC Private Banking and Wealth Management, observed that globally, the AI stock value chain is gradually rotating from upstream hardware to midstream platforms, cloud infrastructure, and application fields. Dr. Cheng Shi, Chief Economist at ICBC International, believes the next stage of opportunity in the AI industry chain is extending from infrastructure investment towards core hardware that solves key bottlenecks and application monetization. Capital is expected to favor leading cloud providers and model platforms with full-stack capabilities that can help clients overcome implementation barriers and translate AI investments into commercial value.

New 'Hard Tech' Listings in Hong Kong

The Hong Kong Exchanges and Clearing Limited welcomed two new "hard tech" listings. Momenta Global Limited, dubbed the "first physical AI stock," and Shenzhen Basic Semiconductor Co., Ltd., a rare integrated device manufacturer in China with full-chain independent capabilities in silicon carbide power devices, commenced trading. Hong Kong's Financial Secretary, Mr. Paul Chan, attended the listing ceremony.

Mr. Chan stated that the two companies are benefiting from the international investment fervor in AI and semiconductors and are leveraging Hong Kong's active IPO market to strengthen their R&D, manufacturing, and global business development capabilities. These listings provide a new channel for global investors to participate in the growth of Mainland China's "physical AI" and cutting-edge semiconductor sectors. He also emphasized Hong Kong's role as a "super connector" for international standards, its robust intellectual property protection, research talent, and mature financial services, which can help Mainland tech companies globalize their operations. The Hong Kong government has established a dedicated task force to support Mainland enterprises in their global expansion efforts.