Alibaba Group's American depositary shares climbed 3% to $162.51 on Friday, snapping a six-day losing streak as technology stocks staged a recovery. The advance came alongside a broader market rally, with the Nasdaq Composite gaining 2.18% and the Dow Jones Industrial Average closing above 50,000 for the first time.
AI App Launch Sparks User Frenzy and Challenges
The company's Qwen AI application vaulted to the number one position on China's Apple App Store after Alibaba launched a Lunar New Year promotion involving 3 billion yuan ($420 million) in giveaways. User demand proved overwhelming, however, causing service outages that required the company to urgently add server capacity. The campaign also faced hurdles when Tencent's WeChat platform blocked the sharing of QR-code links for the promotion, citing policies against aggressive spreading of cash reward links.
According to reports, users placed over 10 million free orders within nine hours using vouchers capped at 25 yuan each, representing approximately 250 million yuan ($36 million) in claimed value. The surge in activity temporarily disrupted the campaign's storefronts. Rivals Tencent and Baidu have reportedly allocated a combined 1.5 billion yuan for similar promotional activities.
Strategic Showcase and Financial Focus
Beyond the consumer app launch, Alibaba recently highlighted its artificial intelligence and cloud capabilities through a public installation called "Alibaba Wonder on Ice" at the Milano Cortina 2026 Olympics. Company Chairman Joe Tsai described the event as part of a shift from "Cloud Olympics" to "Intelligent Olympics," with International Olympic Committee President Kirsty Coventry acknowledging the role of cloud and AI in broadcasting and operations.
For investors, the immediate focus remains on financial discipline and execution. While user acquisition spikes from subsidized promotions generate attention, they pressure profit margins. The reliance on third-party platforms like WeChat also introduces operational vulnerabilities.
Alibaba's next quarterly earnings report is scheduled for February 19, before U.S. markets open. The results will cover the December 2025 quarter, with analysts watching for management commentary on sustainable momentum from the Qwen rollout and holiday-period spending trends. Despite Friday's rebound, the ADRs remain about 16% below their 52-week high of $192.67 reached last October.
