Markets
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Luke Kawa

Alibaba gains as Q2 cloud revenues beat estimates on “robust AI demand”

China’s leading cloud giant is cashing in on the huge appetite for AI compute.

Alibaba ADRs are up big in premarket trading after the e-commerce and cloud giant reported second-quarter sales above analysts’ estimates.

Revenues in its Cloud Intelligence Group rose to 39.8 billion yuan (~$5.6 billion) for the three months ended September 30, ahead of estimates for roughly 38 billion yuan (~$5.35 billion).

“We have entered into an investment phase to build long-term strategic value in AI technologies and infrastructure and a consumption platform integrating daily life services and e-commerce,” said CEO Eddie Wu. “Robust AI demand further accelerated our Cloud Intelligence Group business, with revenue up 34% and AI-related product revenue achieving triple-digit year-over-year growth for the ninth consecutive quarter.”

For traders, the potential benefits from establishing a dominant cloud position in the region are outweighing Alibaba’s bottom-line figures. The positive reaction to these quarterly results comes despite adjusted net income falling 72% compared to the same quarter last year.

Management made it clear that profits are not the top near-term priority.

“We are re-investing our profits and free cash flow for the future while near-term profitability is expected to fluctuate,” Chief Financial Officer Toby Xu added in the press release. “Over the past four quarters, we have deployed approximately RMB120 billion in capital expenditure toward AI and cloud infrastructure.”

This continues the trend of Alibaba’s commitment to AI capex being received enthusiastically by the market. Ahead of earnings, the company announced that its Qwen AI app was downloaded more than 10 million times in the week following its relaunch.

Elsewhere, its domestic e-commerce business — still far and away the firm’s biggest revenue driver — beat sales estimates, while international digital commerce came up short.

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Tasha Matsumoto
1h
Large-caps waver ahead of next week’s Fed meeting; small-caps notch record close

Stocks are in a holding pattern as investors await tomorrow’s release of September PCE for further insight into next week’s Fed decision.

a sunny field
markets
Luke Kawa

Report: US senators plan to introduce bill blocking Nvidia from selling advanced chips to China for 30 months

US senators are on the verge of introducing a bill that would block Nvidia from selling its H200 or Blackwell chips to China for 30 months, the Financial Times reports. The H200 is Nvidia’s best chip from the Hopper generation, while the Blackwell line is its current flagship offering.

Shares of the chip designer are little changed in the wake of this report, still up more than 1% on the session. The reaction makes sense, seeing as previous positive indications on Nvidia’s ability to sell advanced chips to China failed to inspire much positive momentum in its shares.

The stock got a short-lived jolt higher (that didn’t last the day!) on November 21 after Bloomberg reported that the Trump administration had discussed the possibility of selling its H200 chips to China.

Nvidia has effectively been shut out of China’s AI market in 2025. First, export restrictions meant it could no longer sell the H20, a nerfed version of its Hopper chip, to the world’s second-largest economy. After that export ban was lifted, demand from China “never materialized,” per Nvidia CFO Colette Kress. Reports indicate that China banned its leading technology giants from purchasing these semiconductors, instead pushing them toward domestic alternatives.

President Donald Trump had mused about allowing Nvidia to sell Blackwell chips to China prior to his meeting with Chinese President Xi in late October, but failed to do so. The two leaders did not discuss the topic at that time.

Per the FT, this upcoming bill would be a bipartisan effort, being cosponsored by the leading Republican and Democrat members of the Senate Foreign Relations East Asia subcommittee.

markets
Luke Kawa

AI energy plays soar on an explosion of call buying

Like their quantum computing counterparts, AI-linked energy plays are benefiting from an explosion of bullish options activity on Thursday.

  • Oklo is up double digits with call volumes above 106,000 as of 2:46 p.m. ET, more than double its 20-day average for a full session, with a put/call ratio of about 0.6. Call options with a strike price of $110 that expire this Friday (which are now in-the-money thanks to today’s surge) are seeing the most activity.

  • Nuscale, another nuclear energy play, has seen nearly 140,000 call options change hands versus a 20-day average of 51,073.

  • And fuel cell company Bloom Energy has traded nearly 80,000 calls, roughly twice its 20-day average, with a put/call ratio of about 0.3.

During his appearance on Joe Rogan’s podcast released on Wednesday, Nvidia CEO Jensen Huang talked up the potential for nuclear energy, saying, “In the next six to seven years I think you are going to see a whole bunch of small nuclear reactors.”

This adds to the evidence that the speculative bid is back in a big way after smaller stocks tied to the AI boom and quantum computing cratered from mid-October through most of November as credit risk began to seep into the AI trade.

Old electronic items tossed on ground for disposal, Hudson

Technology giants don’t look like they used to, as the asset-light era fades

Oracle and Meta are now some of the most capital-intensive businesses in the S&P 500, spending more than energy giants. I guess data really is the new oil?

David Crowther4h
markets
Matt Phillips

Space stocks rip amid speculation on Altman joining race

Space stocks AST SpaceMobile, Planet Labs, and Rocket Lab all soared Thursday amid a recovery in the high-beta momentum class of shares coveted by some retail traders.

(High-beta momo stocks are basically shares that have been on a winning streak for a while, and tend to go up a lot more than the overall market on positive days. Goldman Sachs includes all three of the aforementioned space stocks in its themed basket of such shares.)

There’s little other fundamental news out there on the companies themselves.

But a Wall Street Journal report that OpenAI impresario Sam Altman has been toying with the idea of entering the space industry, potentially standing up a rival to Tesla CEO Elon Musk’s Starlink satellite service, may also be contributing.

As we’ve mentioned elsewhere, sometimes these stocks seem to trade on a what’s-bad-for-the-Musk-empire-is-good-for-us-and-vice-versa vibe.

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