Baidu and Alibaba are at the center of one of the most exciting rallies in Chinese tech shares in years, pushing the sector to heights not seen since 2021.
As of mid-September 2025, these two giants have grabbed the attention of investors far and wide, driven by bold moves in artificial intelligence (AI), refreshed growth plans, and the allure of huge future opportunities.
The Hang Seng Tech Index has climbed more than 3%, powered not only by Baidu and Alibaba but also by other movers like JD.com and Meituan.
After some choppy years, confidence seems to be coming back strong to China’s tech space.
What’s fueling Baidu and Alibaba’s rise?
AI is the main engine behind this sharp climb. Baidu has been making headlines with its advanced ERNIE AI model and a big push towards using self-made AI chips for training.
This strategy not only boosts their tech prowess but also helps cut reliance on foreign suppliers.
Baidu’s AI cloud revenue shot up 42% year-on-year, signaling a successful shift from its old ad-based model to more stable, tech-centered revenue streams.
Plus, Baidu’s autonomous driving service, Apollo Go, is growing rapidly and getting close to turning a consistent profit, which adds extra confidence for the long haul.
On the flip side, Alibaba isn’t far behind. Its shares have risen thanks to news that it’s started using homegrown AI chips in training its projects, a major step in China’s AI arms race.
Alibaba’s cloud division grew 26% year-on-year, and its AI product sales have been in triple-digit growth for eight straight quarters.
What’s clear is that Alibaba is evolving beyond just e-commerce; it’s becoming a powerhouse in AI and cloud solutions.
Both companies are now seen as leaders in China’s growing AI revolution, with many betting this will pay off big time in the years ahead.
What this rally means for tech investors
This rally brings a wave of optimism for investors who have been cautious amid years of Chinese regulatory crackdowns, trade tensions, and economic uncertainty.
Seeing Baidu and Alibaba reach their highest stock prices since 2021 shows investor sentiment is shifting in a positive direction.
There is a growing belief that, despite hurdles, China’s tech giants can lead the way by pioneering in AI developments.
Of course, risks remain. Baidu still faces margin pressures and the challenges of delivering on its AI promises, while Alibaba juggles its rapid growth with maintaining profitability and rewarding shareholders.
But when compared to many US tech giants, their valuations look pretty attractive, especially with China’s huge market size and government backing of AI growth.
For many investors today, Baidu and Alibaba have become must-haves, backed by a long-term vision that China’s tech dominance is only just beginning its rise.
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