Baidu and Alibaba: Chinese AI Giants Return Trust to Wall Street

The stock market often behaves like a moody teenager, but today on the US pre-market we're seeing rare unanimity regarding Chinese tech companies. While analysts debate the pace of China's economic recovery, the real numbers on the board show that investors are ready to forgive past grievances for the sake of the future in artificial intelligence. The platform Bilibili became the morning's main hero, with its quotes soaring more than 4%.

And this isn't just a random rebound. For those who don't follow China's inner workings, let me remind you: Bilibili ceased being just a "Chinese YouTube for anime enthusiasts" long ago. Today it's the main platform for experience exchange between neural network developers and a hub for generative content created by users.

Following it confidently are the heavyweights. Baidu gained more than 2%, and the reason here is obvious. Robin Li's company was the first in China to bet on LLM and is now reaping the rewards.

Their Ernie Bot model is no longer perceived as a catching-up development. After Baidu integrated AI into all its services—from search to cloud computing—the company transformed into the main proxy tool for those who want to invest in Chinese AI without waiting for IPOs of specialized startups. The market understands: if anyone in China can monetize neural networks at a national scale, it will be Baidu.

Alibaba is also not lagging behind, showing growth of more than 1%. After large-scale restructuring and spinning off the cloud division as a separate direction, the company focused on the Qwen model family. It's important to understand the context: Alibaba is now pursuing an aggressive open-source policy, trying to become for the world's AI what Meta once became with their Llama.

The rise in pre-market stock prices is a kind of vote of confidence in their "AI-first" strategy, which replaced the old pure retail model. When a giant of such scale turns its ship toward neural networks, the inertia is enormous, but the potential profit makes investors open positions. It's interesting to look at those who remained in the red zone.

JD.com and iQIYI lost more than 1%, and electric car manufacturers like Li Auto and NIO show either decline or purely symbolic growth. This creates a clear dividing line.

Money is flowing from "hardware" and traditional commerce into software and algorithms. Investors are clearly tired of price wars in the Chinese EV market, where margins are melting before our eyes. Instead, they're seeking shelter in companies that own data and computing power.

In this sense, Baidu and Alibaba look much more reliable assets than another crossover assembly plant. Why is this happening right now? We're observing a phase of market maturation.

A period of panic due to regulatory pressure in China has been replaced by pragmatism. American funds see that Chinese AI models are starting to occupy top positions in global benchmarks, and the cost of training these models in China is often lower due to the specifics of the labor market and data access. If previously the Chinese tech sector was bought "in change" from the American one, now it's a conscious portfolio diversification.

AI has become that very bridge that allows capital to return to China, despite geopolitical complexities. The main thing: the market has finally chosen its favorites—those who control clouds and algorithms. Will Baidu and Alibaba be able to maintain this pace when quarterly reports come?