What's Going On With Alibaba And Its Chinese Peer Stocks On Friday?

Zinger Key Points
  • Alibaba and tech peers dip amid China's response to U.S. chip sanctions, setting a 2027 deadline for foreign processor phase-out.
  • Alibaba cuts cloud prices globally up to 59%, battling U.S. sanctions' impact on tech capabilities and AI development.

Alibaba Group Holding Limited BABA and peers are trading lower Friday amid reports of China retaliating against U.S. semiconductor sanctions via the East Asian country’s latest move.

In 2024, Chinese officials directed major telecom carriers to phase out foreign processors, notably impacting American chip giants Intel Corp INTC and Advanced Micro Devices, Inc AMD

China set the deadline for 2027. Intel, with China as its largest market, and AMD saw a revenue reduction from China following U.S. restrictions. 

The Wall Street Journal reports that China commanded its telecom operators to inspect their networks for non-Chinese semiconductors and plan their replacement. 

Also Read: Alibaba’s Jack Ma Backs Company’s AI Push and Restructuring

Alibaba rivals Baidu, Inc BIDUJD.Com, Inc JD, and PDD Holdings Inc PDD also traded lower on Friday.

Alibaba has slashed its cloud service prices significantly, offering discounts of up to 59% internationally, in response to competitive pressures and U.S. sanctions impacting the technological capabilities of Chinese firms, including Alibaba itself. 

This move follows a price reduction initiative within China, where Alibaba cut prices by up to 55% for critical cloud services, sparking a price war with rivals like JD.com. 

According to Alibaba co-founder and chairman Joe Tsai, the U.S. sanctions have disadvantage Chinese tech companies, including Alibaba, in AI development and high-end computing services by restricting access to advanced semiconductors. 

Despite these hurdles, Tsai mentioned efforts to seek alternatives and develop large language models in-house to ensure the competitiveness of Alibaba’s cloud offerings.

Price Actions: BABA shares traded lower by 1.86% at $73.46 premarket on the last check Friday. BIDU shares traded lower by 3.13% at $72.51, JD shares traded lower by 4.96% at $25.65, and PDD shares traded lower by 2.30% at $118.34.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via shutterstock

Market News and Data brought to you by Benzinga APIs
Posted In: GovernmentNewsRegulationsTop StoriesMoversTechMediaAI GeneratedBriefsStories That Matterwhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!