Alibaba Joins Nvidia, Tesla in Most Active Options After China's Tech Pledge
$Alibaba(BABA)$
The company's American depositary receipts advanced 8.6% to close at $141.03 on Wednesday, marking their biggest daily gain since late September. That came after China pledged to bolster technologies from artificial intelligence and quantum computing, spurring a rally across the domestic industry.
Total options volume reached 497,370 contracts, landing Alibaba in seventh place for the most active stock option behind Nvidia, Tesla, Apple, Strategy, Palantir and Intel.
Daily inflows into the ADRs outpaced outflows by $117.2 million, driven by block orders, exchange data showed. Even before China's pledge, Alibaba has already been investors' favorite recently.
Over in Hong Kong, almost one-third of the net southbound money flows in the Stock Connect channel last month went into Alibaba's Hong Kong-listed shares, Bloomberg Intelligence analysts wrote in a note Tuesday. The company saw a net inflow of 45.7 billion Hong Kong dollars ($5.88 billion), leading the Stock Connect channel to its second-highly monthly inflows on record in February, they said.
"The tech rally, sparked by DeepSeek, continued to gain momentum, with Alibaba emerging as the favorite,” BI analysts Marvin Chen and Jason Liao said. "Alibaba's gains may have drawn capital away from other tech names, with Tencent $Tencent (TCEHY.US)$ and $MEITUAN-W (03690.HK)$ seeing net outflows in February amid volatility."
Southbound Stock Connect facilitates the flow of capital from mainland China into Hong Kong's equity markets, according to the Hong Kong Exchange website.
In North America, JPMorgan analysts said they met with investors and they "agree with our view that Alibaba still looks interesting in the space, although more on the improvement of ecommerce business and overall profit growth rather than the AI theme.”
The meeting came before China's pledged revived investor optimism over AI development in the Asian country.
The latest buying spree for Alibaba's ADRs has spurred the widest price swings in more than two years. The 60-day historical volatility rose to 53.3% Wednesday, the highest since February 2023, data compiled by Bloomberg show.
Alibaba's 30-day implied volatility, which measures potential price changes using variables including option premiums, also rose to 52.2%.
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