Alibaba Group Holding's American depositary receipts closed Friday's session at $162.51, marking a 3% increase. The stock traded between $158.44 and $162.87 during the day as investors responded to developments surrounding the company's artificial intelligence initiatives.
Qwen App Promotion Creates Frenzy
The price movement followed a promotional campaign by Alibaba's Qwen AI application that offered free bubble tea vouchers across China. According to company statements, the initiative generated over 10 million orders within nine hours, representing approximately 250 million yuan ($36 million) in value. This surge propelled Qwen to the top position on Apple's China App Store, displacing Tencent's competing Yuanbao application.
However, the overwhelming response caused technical difficulties, with some users reporting service outages as systems struggled to handle the volume. The promotion involved partnerships with more than 300,000 beverage outlets nationwide, including major chains like Heytea, Nayuki's Tea, and Luckin Coffee.
Broader AI Competition Intensifies
Alibaba's marketing push comes amid heightened competition in China's AI sector. Rival Baidu recently announced plans to repurchase up to $5 billion worth of shares over two years while committing to dividend payments. These moves occur as technology companies increase spending to attract users to their AI platforms ahead of key shopping periods.
"There's real demand for AI products," noted Ross Mayfield, investment strategy analyst at Baird. The sector has experienced volatility recently as investors weigh spending on data centers and AI infrastructure against revenue growth prospects.
Earnings and Holiday Timing
Market attention now shifts to Alibaba's quarterly results scheduled for February 19. The timing coincides with China's extended Spring Festival holiday, which runs from February 15 to 23 this year. This extended break typically drives increased consumer spending and represents a critical period for digital platforms seeking user engagement.
Beyond basic chatbot functions, Alibaba has expanded Qwen's capabilities to include travel booking and food delivery services, integrating the AI tool more deeply into its broader e-commerce ecosystem. As trading resumes this week, analysts will monitor whether the promotional spending translates into sustainable user growth or raises concerns about marketing costs ahead of earnings.