HONG KONG, July 5, 2026 – Alibaba Group Holding Limited (HKG:9988; NYSE:BABA) shares in Hong Kong posted a weekly gain of 5.1% but ended Friday just 6.1% above their 52-week low, reflecting persistent investor caution. The stock closed at HK$94.10, down 0.42% on the day, after trading as low as HK$88.65 on June 26. The U.S. ADR ended Thursday at $96.14, with NYSE closed Friday for the Independence Day holiday.
The main catalyst for the week was news that Alibaba Cloud has joined a funding round for Kuaishou Technology's (HKG:1024) Kling AI, alongside Tencent Holdings (HKG:0700) and Baidu Inc (HKG:9888; NASDAQ:BIDU). The round is expected to raise over 19 billion yuan ($2.8 billion), valuing Kling AI at $15 billion pre-money. The total round could reach 20.45 billion yuan, reducing Kuaishou's stake from 100% to about 68%.
Kling AI Valuation and Market Context
Kling AI's pre-money valuation of $15 billion represents about 64% of Kuaishou's market value of HK$184.33 billion. The implied post-money valuation of approximately $17.8 billion would be near 76% of Kuaishou's market cap. For Alibaba, the Kling AI pre-money value is about 6.4% of its Hong Kong market capitalization of HK$1.84 trillion ($234.6 billion).
Kuaishou reported that Kling AI generated 650 million yuan in revenue last quarter, more than quadruple year-over-year. At a $15 billion pre-money valuation, that equates to about 39 times annualized Q1 sales. State-affiliated funds and media companies also participated in the round, reflecting Beijing's push for AI development.
Alibaba's Dual AI Strategy
Alibaba investors are now monitoring two AI bets: the company's own significant cloud spending and minority investments like Kling AI. Alibaba CEO Eddie Wu told analysts in May that the return on AI and cloud investments is becoming increasingly clear, adding that margin remains a secondary consideration. Cloud Intelligence sales rose 38% to 41.63 billion yuan in the March quarter, with AI products accounting for 30% of external cloud revenue.
Separately, Alibaba reported buying back 4.1616 million shares on the NYSE on July 2, spending $49.99 million at prices between $11.90 and $12.24 per share. All those shares are set for cancellation. The buyback amount is roughly one-56th the size of Kling's disclosed funding round.
Market Performance and Outlook
Kuaishou shares jumped as much as 6.9% on Friday following the Kling AI news but ended the session little changed, closing at HK$42.60. Alibaba's Hong Kong shares fell Friday after the news broke, while the ADR did not trade due to the U.S. holiday. Hong Kong's market was also closed on Wednesday for the Special Administrative Region Establishment Day.
Alibaba shares remain 49.5% below their 52-week high of HK$186.20. Traders will watch whether the stock can hold above HK$94 on Monday after recovering some of June's losses. Kuaishou has up to two months to secure additional investors for the Kling round, setting up another catalyst for China AI video plays.
