Tencent Holdings Stock (OTC:TCEHY), Trade Ideas

Tencent Holdings

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Tencent is arguably the most influential internet firm in China, as one can hardly go a day without using its products. Tencent is the world's largest video game vendor and owns the world's top-grossing mobile game—Honor of Kings. Tencent also runs China's largest social media super app—WeChat. The app is now part of the fabric of life for Chinese people who use it to chat, shop, watch videos, play games, order food and taxis, and more. Equally as impressive as its own portfolio, Tencent is also among the world's largest venture capital and investment corporations. The firm is now one of the largest shareholders in leading tech companies like Meituan, JD, DiDi, Snap, PDD, Kuaishou, Epic Games, and more.

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The new R&amp;D facility is focused on developing lithography machines, which are essential for advanced chip production. 

Threat For Nvidia, AMD? Huawei Ramps Up Semiconductor R&amp;D In Shanghai To Counter US Restrictions

TikTok Photo by XanderSt on Shutterstock

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Revenue and profits for TikTok parent ByteDance are now higher than Chinese rival Tencent according to a new report.

TikTok Parent ByteDance&#39;s Profits Rise 60% Year-Over-Year As Company Grapples With Potential US Ban

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KraneShares&#39; Henry Greene shared insights on China&#39;s dynamic market and their focus on future growth in industries like internet/technology and electric vehicles.

EXCLUSIVE: &#39;China&#39;s Stock Market Has Bottomed, Indicating A Potentially Rare Opportunity,&#39; Says Investment Strategist

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Nvidia, AMD chip-rival Huawei Technologies is significantly bolstering its semiconductor research and development capabilities by establishing a new, expansive center in Shanghai.
What Happened: Huawei Technologies is escalating its efforts in semiconductor research and development by establishing a large center in Shanghai, Nikkei Asia <a href="https://asia.nikkei.com/Business/Tech/Semiconductors/Huawei-building-vast-chip-equipment-R-D-center-in-Shanghai">reported</a> on Wednesday. 
This move is a direct response to the stringent U.S. export controls that have limited Huawei&#8217;s access to crucial chip-making equipment.
The new R&amp;D facility is focused on developing lithography machines, which are essential for advanced chip production. Currently, the production of such equipment is controlled by a few global entities, including ASML from the Netherlands and Japan&#8217;s Nikon and Canon. To attract top talent to this ambitious project, Huawei is offering salaries up to double those of local competitors and has already recruited engineers with experience at leading chip tool builders and chipmakers.
As U.S. export controls tighten, affecting the job market for Chinese citizens in foreign chip companies, Huawei and other local firms are finding a larger pool of domestic talent to draw from. Despite the attractive compensation, Huawei&#8217;s work culture is described as extremely demanding, with one engineer characterizing it as &#8220;007&#8221; &#8211; working nonstop, with no days off.
See Also: <a href="https://www.benzinga.com/news/24/04/38061843/elon-musks-x-is-drowning-in-adult-content-so-much-that-you-cant-scroll-it-in-public?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Elon Musk&#8217;s X Is Drowning In Adult Content, So Much That You Can&#8217;t Scroll It In Public</a>
Amid these challenges, Huawei&#8217;s investment in domestic chip capabilities continues to grow. The Shanghai campus, which also includes a major chip development center and the headquarters for Huawei&#8217;s chip design unit HiSilicon, represents a significant expansion of the company&#8217;s R&amp;D footprint. The Shanghai government has disclosed a total investment of approximately 12 billion yuan for the R&amp;D base, which will be one of the city&#8217;s key projects for 2024.
The U.S. has been lobbying its allies to adopt similar export restrictions, which has led Chinese chipmakers to seek domestic alternatives. Huawei&#8217;s increased R&amp;D spending, which hit a record 164.7 billion yuan in 2023, underscores its commitment to reducing reliance on foreign technology and bolstering its semiconductor supply chain.
Why It Matters: The intensification of <a href="https://www.benzinga.com/government/24/03/37843852/huaweis-ambitious-ai-chip-developments-trigger-potential-us-sanctions-on-chinese-firms">Huawei&#8217;s semiconductor R&amp;D in Shanghai</a> is a direct consequence of the U.S. government&#8217;s consideration to blacklist several Chinese semiconductor firms associated with Huawei. This potential action by the Biden administration could further isolate Huawei from the global tech community.
Moreover, Huawei&#8217;s recent patent developments in semiconductor technology, specifically in self-aligned quadruple patterning (SAQP), suggest a strategic pivot to circumvent U.S. export controls on high-end lithography equipment. This innovation could <a href="https://www.benzinga.com/government/24/03/37892574/asml-faces-setback-as-huawei-innovates-beyond-euv-restrictions-with-breakthrough-patent">potentially undermine the market dominance</a> of companies like ASML Holding (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ASML#NASDAQ">ASML</a>).
The context of these developments is further enriched by the <a href="https://www.benzinga.com/government/24/03/37630752/intel-and-amd-clash-over-huawei-chip-sales-highlighting-us-sanctions-and-market-dynamics">ongoing tussle between major chipmakers</a> like Intel and Advanced Micro Devices over chip sales to Huawei. Despite the sanctions, Intel has managed to continue its significant chip sales to Huawei, showcasing the complex dynamics of the semiconductor market amid U.S. sanctions.
Meanwhile, Chinese chip designers, including Tencent Holdings Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>), actively promote their AI <a href="https://www.benzinga.com/government/23/12/36173387/nvidia-faces-fierce-competition-in-china-tencent-and-huawei-lead-the-charge">chips as alternatives </a>to Nvidia (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) products. They hope U.S. export restrictions will encourage clients to switch. 
Read Next: <a href="https://www.benzinga.com/news/24/04/38178568/elon-musk-reacts-to-old-clip-of-apple-co-founder-steve-jobs-saying-theres-a-tremendous-amount-of-cra?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Elon Musk Reacts To Old Clip Of Apple Co-Founder Steve Jobs Saying &#8216;There&#8217;s A Tremendous Amount Of Crafts</a>
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Threat For Nvidia, AMD? Huawei Ramps Up Semiconductor R&D In Shanghai To Counter US Restrictions

Leading Chinese company ByteDance saw strong 2023 profits, which come as the company's TikTok unit faces a <a href="https://www.benzinga.com/general/entertainment/24/03/37664282/tiktok-bill-passes-house-vote-influencers-on-edge-chinese-owned-app-used-by-150m-americans">potential ban in the U.S.</a>
What Happened: As ByteDance faces a potential ban of <a href="https://www.benzinga.com/topic/tiktok">TikTok in the U.S.</a> or a forced sale of the unit, the company is seeing record annual profit.
On Wednesday, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-04-10/bytedance-profit-jumps-60-taking-it-past-archrival-tencent?sref=TBDibEcD">reported </a>ByteDance saw a 60% year-over-year increase in profit.
The profit growth takes the company past levels seen by Chinese rivals Tencent Holdings (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) and Alibaba Group Holding (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>).
Revenue was up 50% year-over-year for 2023 going from $80 billion to $120 billion, according to the report.
The report shows that ByteDance is one of the fastest-growing technology companies globally.
Related Link:<a href="https://www.benzinga.com/general/social-media/24/03/37722366/why-did-donald-trump-change-his-mind-about-tiktok-follow-the-money-says-rep-nancy-pelosi"> Why Did Donald Trump Change His Mind About TikTok? &#8216;Follow The Money&#8217; Says Rep. Nancy Pelosi</a>
Why It's Important: According to the report this marks the first time that ByteDance has passed Tencent in revenue and profit on an annual basis.
ByteDance, which owns TikTok and Douyin, has posted strong revenue growth during a time of macroeconomic concerns and consumer struggles in China.
Douyin competes with Tencent's WeChat in China and has added features to make the app an all-in-one home for more offerings. Douyin also competes with Alibaba in the country.
TikTok, which operates in countries outside China, has grown with new products like TikTok Shop. The app has 170 million users in the U.S., according to the report. TikTok is looking to better compete with Amazon.com with ecommerce offerings aimed at consumers.
The U.S. House of Representatives passed a bill that would ban TikTok in the country, without selling the asset to a third-party. The bill has not been passed in the Senate and the 2024 presidential election could see a potential ban as a key issue with concerns over how the forced sale or ban could complicate relations between China and the United States.
ByteDance was valued at $268 billion in December 2023 based on a price it assigned to buy back shares from investors. ByteDance's valuation was previously between $300 and $400 billion in private sales.
Tencent has a market capitalization of $372.6 billion today, which could make a potential public listing of ByteDance highly anticipated given the higher revenue and profit totals and stronger year-over-year growth.
The potential ban of TikTok in the U.S. could delay any plans for a public listing until the matter is resolved.
Read Next: <a href="https://www.benzinga.com/government/24/03/37710878/congress-moves-to-ban-tiktok-could-members-benefit-from-positions-in-social-media-stocks-like-meta-p">Congress Moves To Ban TikTok: Could Members Benefit From Positions In Social Media Stocks Like Meta Platforms?</a>
Image: Shutterstock

TikTok Parent ByteDance's Profits Rise 60% Year-Over-Year As Company Grapples With Potential US Ban

In an exclusive interview with Benzinga, Henry Greene, Investment Strategist at KraneShares, shared insights into the investment approach and opportunities in <a href="https://www.benzinga.com/topic/china">China&#8217;s dynamic market</a>.
KraneShares, with its focus on capturing the essence of the &#8220;New China&#8221; economy, emphasizes industries positioned for long-term growth. Greene noted that KraneShares is uniquely focused on the future growth of China, &#8220;as opposed to the industries that have driven the &#8216;Old China&#8217; economy, such as manufacturing, real estate, and financials.&#8221;
<h2 class="wp-block-heading">China&#8217;s Internet Penetration Rate Presents An Opportunity</h2>
Regarding promising sectors, Greene highlighted China&#8217;s internet and technology industries. &#8220;China&#8217;s internet penetration rate remains low at 74%,&#8221; he stated, indicating significant growth potential. This is despite its consumers spending twice as much online as in the U.S. Per Greene, the government in China is currently prioritizing the development of domestic technology companies, especially in electric vehicles, clean tech, and semiconductors.
<h2 class="wp-block-heading">Optimism Amid Challenges: KraneShares CSI China Internet ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KWEB#NYSE">KWEB</a>)</h2>
Greene expressed optimism about China as an asset class despite geopolitical tensions. He emphasized the overselling of Chinese companies by global investors and the resulting opportunities. &#8220;Geopolitical tensions don&#8217;t impact the underlying businesses of many companies in our KWEB ETF,&#8221; Greene affirmed.
The KWEB ETFs&#8217; top holdings include: Tencent Holdings Ltd (OTCPK:TCEHY) (OTCPK:TCTZF) (9.76%), Alibaba Group Holding Ltd Ordinary Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABAF#NYSE">BABAF</a>) (9%), Meituan Class B (OTCPK:MPNGF) (OTCPK:MPNGY) (7.97%), PDD Holdings Inc ADR (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PDD#NASDAQ">PDD</a>) (6.56%) and NetEase Inc Ordinary Shares (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) (5.99%).
To address investor concerns about volatility, KraneShares has launched two ETFs providing downside protection on KWEB: 
<ul>
<li>KraneShares 100% KWEB Defined Outcome January 2026 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KPRO#NYSE">KPRO</a>)</li>
<li>KraneShares 90% KWEB Defined Outcome January 2026 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KBUF#NYSE">KBUF</a>)</li>
</ul>
<h2 class="wp-block-heading">China&#8217;s Emergence As World&#8217;s Largest Vehicle Exporter</h2>
Discussing the automotive sector, Greene noted China&#8217;s emergence as the world&#8217;s largest vehicle exporter. &#8220;This represents a significant opportunity but also poses challenges,&#8221; he explained. &#8220;Increased imports from China may lead to protectionism in some economies.&#8221;
Related: <a href="https://www.benzinga.com/markets/asia/24/04/38066697/chinas-ev-wars-heat-up-chery-launches-new-brand-to-battle-tesla-and-huawei">China&#8217;s EV Wars Heat Up: Chery Launches New Brand To Battle Tesla And Huawei</a>
<h2 class="wp-block-heading">China&#8217;s Stock Market Has Bottomed &#8211; Capture The Opportunity</h2>
&#8220;China's stock market has bottomed, indicating a potentially rare opportunity to buy assets at valuations not seen for decades,&#8221; Greene said. He added that KWEB as a good way to access China&#8217;s top internet stocks, noting that its holdings have a price-to-earnings ratio of 18x compared to the 31x of U.S. internet firms.
On the topic of artificial intelligence (AI), Greene highlighted opportunities beyond hardware companies like Nvidia. &#8220;We see more opportunity in the companies that are developing applications of large language models (LLMs),&#8221; he said.
KraneShares&#8217; Greene provided valuable insights into the evolving landscape of China&#8217;s markets and the investment opportunities they present. With a focus on innovation and growth, KraneShares continues to navigate the dynamic Chinese economy for investors seeking exposure to its burgeoning sectors.
Read Next: <a href="https://www.benzinga.com/markets/asia/24/04/38070613/billionaire-investor-ray-dalio-remains-bullish-on-china-despite-a-looming-100-year-storm-the-time-to">Billionaire Investor Ray Dalio Remains Bullish On China Despite A Looming &#8216;100-Year Storm&#8217;: &#8216;The Time To Buy Is When Everyone Hates The Market&#8217;</a>
Image generated using artificial intelligence with Midjourney.

EXCLUSIVE: 'China's Stock Market Has Bottomed, Indicating A Potentially Rare Opportunity,' Says Investment Strategist

Chinese cloud service giants are&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/04/38024676/alibaba-clouds-livestream-event-draws-millions-sparks-cloud-computing-price-war" rel="noreferrer noopener">adopting live streaming</a>&nbsp;to promote and sell their products, sparking a price war to attract small and medium-sized enterprises (SMEs).&nbsp;
Huawei Technologies&nbsp;pioneered this trend with six live sessions starting March 22, offering discounts of up to 90% as part of a &#8220;cloud purchase festival.&#8221;&nbsp;Alibaba Group Holding Ltd&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) and&nbsp;JD.com Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/JD#NASDAQ">JD</a>) followed suit, hosting their live broadcasts.&nbsp;
Alibaba&#8217;s session drew over 2.3 million viewers and secured over 1,000 SME clients for their cloud services, SCMP&nbsp;<a target="_blank" href="https://www.scmp.com/tech/tech-trends/article/3257707/huawei-alibaba-jdcom-turn-live-streaming-sell-cloud-services-chinese-cloud-price-war-intensifies" rel="noreferrer noopener">reports</a>.&nbsp;
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/04/38065328/alibabas-bold-actions-4-8b-stock-repurchase-and-revolutionary-one-hour-global-delivery-plan" rel="noreferrer noopener">Alibaba&#8217;s Bold Actions &#8211; $4.8B Stock Repurchase and Revolutionary One-Hour Global Delivery Plan</a>
The session was notably led by internet sensation Luo Yonghao, highlighting the competitive edge live streaming adds to cloud service promotions.
This shift towards live streaming for product promotion reflects the intense competition among cloud providers to offer lower-priced services, benefiting SMEs with affordable app development, website launching, and data storage options.&nbsp;
Alibaba and&nbsp;Tencent Holdings Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) announced significant&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/03/37453606/alibaba-and-jd-com-engage-in-aggressive-price-cutting-intensifying-cloud-services-competition" rel="noreferrer noopener">price reductions of</a>&nbsp;up to 50% in May last year, with Alibaba Cloud further slashing prices on 100 core products this February.&nbsp;
Such competitive pricing strategies are essential for gaining an edge in the market, according to analyst Liu Lihui from IDC.
In the fourth quarter of 2023, China&#8217;s spending on cloud infrastructure services surged to $9.7 billion, marking a 22% year-over-year increase and claiming 12% of the global cloud expenditure, per a&nbsp;<a target="_blank" href="https://www.chinainternetwatch.com/30820/cloud-infrastructure-services/#:~:text=In%20the%20final%20quarter%20of,emphasis%20on%20expanding%20partner%20ecosystems." rel="noreferrer noopener">report</a>. Throughout 2023, the Chinese cloud market experienced a 16% growth, surpassing the previous year&#8217;s 10% rise. Forecasts suggest this growth trend will persist, with an anticipated 18% increase in 2024.
During the final quarter of 2023, Alibaba Cloud, Huawei Cloud, and Tencent Cloud, China&#8217;s top cloud service providers, dominated the market, achieving 28% growth and capturing a 74% market share.
Investors can gain exposure to critical Chinese tech companies via&nbsp;IShares China Large-Cap ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXI#NYSE">FXI</a>) and&nbsp;KraneShares Trust KraneShares CSI China Internet ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KWEB#NYSE">KWEB</a>).
Price Action:&nbsp;BABA shares traded higher by 0.70% at $72.96 on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by Fooksou Lamimo via Wikimedia Commons

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Alibaba's Live Streaming Strategy Sparks SME Interest, Highlights Cloud Market Competition in China

Alibaba Cloud, the&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/03/37453606/alibaba-and-jd-com-engage-in-aggressive-price-cutting-intensifying-cloud-services-competition" rel="noreferrer noopener">cloud computing branch</a>&nbsp;of&nbsp;Alibaba Group Holding Ltd&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>), captured the attention of over 2.3 million viewers with its inaugural livestream event featuring prominent Chinese influencer Luo Yonghao on Taobao, an affiliated e-commerce platform.&nbsp;
The event showcased various&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/02/37393754/whats-going-on-with-alibaba-stock-thursday" rel="noreferrer noopener">cloud computing solutions</a>, including Alibaba Cloud Drive for Enterprises, Alibaba Cloud Elastic Compute Service, and Object Storage Service, attracting around 1,000 companies to order and inquire about the products during the broadcast.
This collaboration with Luo aims to extend the reach and understanding of cloud computing benefits among a broader audience and businesses, highlighting the importance of advanced public cloud services, Yicai Global&nbsp;<a target="_blank" href="https://www.yicaiglobal.com/news/alibaba-clouds-first-livestreaming-e-commerce-event-attracts-over-23-million-viewers" rel="noreferrer noopener">reports</a>.&nbsp;
Following a series of price reductions by Alibaba Cloud last year, competitors like&nbsp;Tencent Holding Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>), China Telecom&#8217;s state Cloud, and&nbsp;JD.Com, Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/JD#NASDAQ">JD</a>) JD Cloud also slashed their prices significantly, indicating a price war among major players.
Despite recent price cuts, including a 20% reduction on all products by Alibaba Cloud, Tencent Cloud opted not to follow suit this time.&nbsp;
Alibaba Cloud&#8217;s Senior Vice President, Liu Weiguang, emphasized that these price reductions are part of a long-term strategic approach rather than short-term competitive tactics. He explained that cloud computing operates on economies of scale, where an increased customer base can significantly reduce procurement, research, and development costs, thereby allowing for lower product pricing. 
In 2023, <a href="https://www.benzinga.com/news/23/09/34428061/alibaba-clouds-leadership-shakeup-how-will-it-impact-the-60b-ipo" target="_blank" rel="noreferrer noopener">Alibaba tapped CEO</a> Eddie Wu as the chair and CEO of the cloud business on an interim basis. Co-founder Jack Ma <a href="https://www.benzinga.com/news/23/12/36212054/whats-going-on-with-alibaba-stock-wednesday" target="_blank" rel="noreferrer noopener">dumped the $11 billion</a> cloud business IPO amid a weak economy and depressed investor sentiments.
The stock lost over 26% in the last 12 months. Investors can gain exposure to the stock via&nbsp;Invesco Golden Dragon China ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PGJ#NASDAQ">PGJ</a>) and&nbsp;Tidal Trust II CoreValues Alpha Greater China Growth ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CGRO#NYSE">CGRO</a>).
Price Action:&nbsp;BABA shares traded higher by 1.44% at $73.40 premarket on the last check Monday.
Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image: Shutterstock

CGRO

PowerShares Golden Dragon Halter USX China Portfolio

Alibaba Cloud's Livestream Event Draws Millions, Sparks Cloud Computing Price War

Tencent Holdings ADR (OTC: <a class="ticker" href="https://www.benzinga.com/stock/tcehy#OTC">TCEHY</a>) is drawing inspiration from the breakout success of Palworld to rejuvenate its <a href="https://www.benzinga.com/markets/asia/24/02/36961933/tencent-develops-elden-ring-mobile-to-revitalize-gaming-portfolio-report">core business.</a>
<a href="https://www.bloomberg.com/news/articles/2024-03-26/tencent-chases-palworld-success-with-mobile-games-featuring-pets">According</a> to Bloomberg, the company&#39;s leading studios, Timi and Lightspeed, are independently developing mobile games that blend open-world exploration with the novelty of pet companionship and action elements, akin to the viral hit.
This strategy reflects Tencent&#39;s broader aim to cultivate in-house hits that can spur growth and offset recent challenges, including a 2% dip in gaming revenue and increased competition in its cloud services and software offerings.
See Also:&nbsp;<a href="https://www.benzinga.com/general/gaming/24/02/37289960/from-meme-to-mainstream-palworld-celebrates-25-million-players-despite-or-because-of-pok-mon-plagi">From Meme To Mainstream: Palworld Celebrates 25 Million Players Despite (Or Because?) Of Pok&eacute;mon Plagiarism Controversy</a>
The focus on games similar to Palworld, known for its engaging mix of &quot;Pok&eacute;mon with guns&quot; gameplay, highlights Tencent&#39;s pursuit of quick, impactful projects supported by its significant resources.
This approach not only aims to capture the attention of a global gaming audience but also to leverage the potential for rapid development and monetization.
Additionally, Tencent is enhancing its talent pool and shifting resources to support these new projects.
Lightspeed moved developers from existing games like High Energy Heroes into its&nbsp;Palworld-like project, Bloomberg noted.
Timi, maker of Call of Duty Mobile, is hiring Unreal Engine programmers, 3D artists and combat designers for its project, the report noted, citing a job post for a &quot;fantasy adventure world with cute pets.&quot;
Palworld, an independent PC title, was created by a small studio operating with restricted resources. Despite its modest beginnings, the game skyrocketed to become the most downloaded new title globally upon its January release.
Read Next:&nbsp;<a href="https://www.benzinga.com/markets/asia/24/03/37877704/tencents-assassins-creed-jade-delayed-to-2025-as-focus-shifts-to-dreamstar">Tencent&#39;s Assassin&#39;s Creed Jade Delayed To 2025 As Focus Shifts To DreamStar</a>
Image created using photos from Shutterstock and Steam.

Gaming

How Tencent's New Mobile Ventures Aim To Mimic Palworld's Global Success

Gamers eagerly waiting for the debut of Assassin&#39;s Creed Jade will have to wait until 2025.
The game&#39;s developer, Tencent Holdings ADR (OTC: <a class="ticker" href="https://www.benzinga.com/stock/tcehy#OTC">TCEHY</a>), has reportedly <a href="https://www.benzinga.com/general/gaming/24/01/36747478/game-industry-braces-for-year-of-closures-in-2024-report-says">delayed the release</a> of the mobile game.
The decision stems from a strategic shift within Tencent, with resources being redirected from Assassin&rsquo;s Creed Jade to the recently launched DreamStar party game.
See Also:&nbsp;<a href="https://www.benzinga.com/general/gaming/23/07/33252418/assassins-creed-mirage-introduces-haptic-vest-so-players-can-feel-everything-including-stabs-and-p">Assassin&#39;s Creed Mirage Introduces Haptic Vest So Players Can Feel Everything, Including Stabs And Parkour</a>
Reuters <a href="https://www.reuters.com/technology/tencents-next-level-up-fewer-big-foreign-franchise-games-more-in-house-2024-03-21/">disclosed </a>that hundreds of staff members working on Assassin&rsquo;s Creed Jade have been reassigned to DreamStar.
Assassin&rsquo;s Creed Jade, a mobile spin-off set in ancient China, has been in development for over four years.
The delay is attributed to Tencent&#39;s new focus on shifting away from developing Western franchises for mobile platforms due to narrow profit margins. Instead, Tencent aims to concentrate on creating games similar to NetEase&#39;s Eggy Party and miHoYo&#39;s Genshin Impact, which utilize their own intellectual properties, enabling Tencent to retain a larger share of the profits.
Level Infinite, a subsidiary of Tencent, in collaboration with Ubisoft Entertainment SA&nbsp;(OTC: <a class="ticker" href="https://www.benzinga.com/stock/ubsff#OTC">UBSFF</a>), is responsible for the development of Assassin&rsquo;s Creed Jade, marking the first full game within the franchise exclusively designed for mobile devices.
Meanwhile, the next mainline installment in the Assassin&#39;s Creed series, codenamed Assassin&rsquo;s Creed Codename Red, is scheduled for release by the end of March 2025.
Read Next:&nbsp;<a href="https://www.benzinga.com/general/gaming/23/10/35382025/ubisofts-upcoming-assassins-creed-red-faces-protagonist-leak-by-senior-writer">Ubisoft&#39;s Upcoming Assassin&#39;s Creed Red Faces Protagonist Leak By Senior Writer</a>
Image credits:&nbsp;<a href="https://www.shutterstock.com/es/g/DailyFX">CryptoFX</a>&nbsp;on Shutterstock.

UBSFF

Tencent's Assassin's Creed Jade Delayed To 2025 As Focus Shifts To DreamStar

Tencent-owned (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) Epic Games has revealed plans to launch on mobile platforms, promising equitable terms for all developers and a truly multi-platform experience.
What Happened: On Wednesday, Epic Games announced its intention to bring the Epic Games Store to mobile users. 
The company posted on X, &#8220;We're coming to iOS and Android! Same fair terms, available to all developers, on a true multi-platform store – with amazing games for everyone.&#8221;
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">We're coming to iOS and Android! Same fair terms, available to all developers, on a true multi-platform store – with amazing games for everyone. <a href="https://t.co/TUKlF8PI8A">pic.twitter.com/TUKlF8PI8A</a>
&mdash; Epic Games Store (@EpicGames) <a href="https://twitter.com/EpicGames/status/1770500825166545305?ref_src=twsrc%5Etfw">March 20, 2024</a></blockquote>
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See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37784585/gene-munster-says-apple-will-fight-to-rebrand-gemini-on-iphone-but-the-deal-is-what?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Gene Munster Says &#8216;Apple Will Fight&#8217; To Rebrand Gemini On iPhone, But The Deal Is What Google Investors Have Been &#8216;Waiting For The Last 6 Months&#8217;</a>
The announcement came on a day when the mobile gaming community is increasingly looking for alternatives to the dominant app stores. Epic Games&#8217; expansion to iOS and Android is seen as a direct challenge to the status quo, offering a new avenue for developers and gamers alike.
Why It Matters: This development follows a significant victory for Epic Games in Europe, where Apple <a href="https://www.benzinga.com/general/gaming/24/03/37567854/epic-victory-fortnite-returns-to-ios-in-europe-as-apple-relents-on-eu-ban">recently reversed its ban on Epic Games</a>, allowing them to introduce their app store on iOS. This decision came after pressure from EU officials and is a strong indication of the European Commission&#8217;s commitment to enforcing the Digital Markets Act and maintaining competition.
Previously, <a href="https://www.benzinga.com/general/gaming/24/03/37517484/apple-terminates-epic-games-developer-account-in-ongoing-feud-over-app-store-fees">Apple had terminated Epic Games&#8217; developer account</a> amid a feud over app store fees, which Epic Games labeled as a serious violation of the Digital Markets Act. The conflict highlighted the tension between app developers and the gatekeepers of mobile app ecosystems.
Industry figures like Y Combinator&#8216;s Paul Graham have <a href="https://www.benzinga.com/markets/equities/24/03/37528407/y-combinators-paul-graham-thinks-power-has-corrupted-apple-thinking-of-them-as-evil-so-inconveni">voiced strong opposition to Apple&#8217;s approach</a>, with Graham recently condemning the tech giant for its stance on alternative app stores and payment options in the EU. 
Read Next: <a href="https://www.benzinga.com/news/24/03/37841933/elon-musk-mocks-don-lemon-again-i-suspect-people-will-find-it-just-as-unwatchable-as-it-was-on-cnn?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Elon Musk Mocks Don Lemon Again: &#8216;I Suspect People Will Find It Just As Unwatchable As It Was On CNN&#8217;</a>
Image via Shutterstock
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AAPL

Epic Games Announces Expansion To iOS And Android Platforms

<a href="https://www.ft.com/content/95cf8b56-e822-4fc0-a12e-1e7ae15733fd" title="https://www.ft.com/content/95cf8b56-e822-4fc0-a12e-1e7ae15733fd">https://www.ft.com/content/95cf8b56-e822-4fc0-a12e-1e7ae15733fd</a>

PARA

Financial Times Reported Earlier: Shari Redstone Prefers Skydance Deal To $11B Apollo Bid For Paramount Studio

The Biden administration is contemplating the addition of several&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/03/37828477/alibaba-unveils-new-processor-and-open-source-laptop-based-on-risc-v-processors" rel="noreferrer noopener">Chinese semiconductor firms</a>&nbsp;associated with&nbsp;Huawei Technologies Co&nbsp;to the blacklist.&nbsp;
This consideration arises as Huawei achieved a notable tech breakthrough last year, raising concerns in Washington about its enhanced capabilities despite existing sanctions. Prior reports indicated Huawei,&nbsp;Tencent Holding Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) developing AI chips competing with&nbsp;Nvidia Corp&#8217;s&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) to tap China&#8217;s $7 billion AI market.
This move could escalate the U.S. efforts to contain China&#8217;s aspirations in AI and semiconductor technology, putting additional pressure on Huawei, which has progressed in creating a smartphone processor unexpectedly advanced for its current sanctions status, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-03-20/us-weighs-sanctioning-huawei-s-secretive-chinese-chip-network?srnd=technology-vp&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/government/23/12/36173387/nvidia-faces-fierce-competition-in-china-tencent-and-huawei-lead-the-charge" rel="noreferrer noopener">Nvidia Faces Fierce Competition in China, Tencent and Huawei Lead the Charge</a>
Among the entities possibly facing blacklisting are chipmakers like Qingdao Si&#8217;En, SwaySure, and Shenzhen Pensun Technology Co. (PST), alongside China&#8217;s leading memory chipmaker, ChangXin Memory Technologies Inc.
These companies were identified in a presentation by the Semiconductor Industry Association, indicating their connection to Huawei&#8217;s efforts to develop chipmaking facilities.&nbsp;
The U.S. is also considering sanctions against companies like Shenzhen Pengjin High-Tech Co. and SiCarrier, who are suspected of assisting Huawei in obtaining restricted semiconductor manufacturing equipment.
Reportedly,&nbsp;<a target="_blank" href="https://www.benzinga.com/government/24/03/37791010/alibabas-strategic-shift-new-ceo-for-grocery-arm-and-bold-move-to-enhance-harmonyos-with-huawei" rel="noreferrer noopener">Chinese tech juggernaut</a>&nbsp;Alibaba Group Holding Limited&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) collaborated with Huawei to create native applications for Huawei&#8217;s HarmonyOSto compete with&nbsp;Alphabet Inc&#8217;s&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>) Google Android and&nbsp;Apple Inc&#8217;s&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) iOS in mainland China.
Recent reports also indicated Alibaba&#8217;s Damo Academy is preparing to launch the C930, the newest member of its XuanTie series of RISC-V processors, within 2024 to overcome the difficulties imposed by strict U.S. trade restrictions on the export of advanced chip technologies from the likes of&nbsp;Nvidia Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) to China.
Reports have previously suggested that China&#8217;s embrace of the RISC-V architecture, an adaptable and power-efficient alternative to&nbsp;Advanced Micro Devices, Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>) and&nbsp;Intel&nbsp;Corp&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/INTC#NASDAQ">INTC</a>), threatened their X86 chip dominance.&nbsp;
At the XuanTie Partner Conference, Alibaba demonstrated the capabilities of RISC-V processors across various applications, including 5G communications, robotics, and financial services.
Price Actions:&nbsp;BABA shares closed lower by 0.14% at $73.42 on Tuesday. NVDA shares closed higher by 1.07% at $894.00.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image Credits &#8211; Shutterstock

GOOG

GOOGL

INTC

Huawei's Ambitious AI Chip Developments Trigger Potential US Sanctions on Chinese Firms

Advanced Micro Devices, Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>) stock traded above 2% on Wednesday despite reports of U.S. sanctions taking a toll on&nbsp;<a target="_blank" href="https://www.benzinga.com/government/24/03/37485236/why-is-amd-stock-trading-lower-tuesday" rel="noreferrer noopener">its China ambitions</a>.
AMD initially held a smaller portion of the Chinese AI chip market compared to Nvidia, which dominated the space before the imposition of U.S. restrictions in 2022.&nbsp;
However, AMD is now pursuing the AI chip market with greater ambition. In December, it unveiled its new MI300 series, aimed at competing with&nbsp;Nvidia Corp&#8217;s&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) processors.
The product tailored for China has been dubbed the MI309. The identity of the Chinese client interested in purchasing AMD&#8217;s AI chips remains unknown, which could affect AMD&#8217;s ability to obtain a license if it decides to proceed, SCMP&nbsp;<a target="_blank" href="https://www.scmp.com/tech/tech-war/article/3254327/us-blocks-amd-selling-ai-chip-tailored-china-without-licence-sources" rel="noreferrer noopener">reports</a>.&nbsp;
Previously, Nvidia voiced a lack of&nbsp;<a target="_blank" href="https://www.benzinga.com/government/23/10/35345164/is-nvidia-benefiting-from-us-sanctions-on-china" rel="noreferrer noopener">significant impact from</a>&nbsp;the China ban despite U.S. chipmakers canvassed the U.S. government to go softer on the ban.
Major Chinese technology firms, including&nbsp;Tencent Holdings Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) and&nbsp;Baidu Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BIDU#NASDAQ">BIDU</a>), have reportedly accumulated sufficient stockpiles of advanced chips from Nvidia—now under U.S. restrictions—to support their chatbot developments for an additional one to two years. In response to the U.S. ban,&nbsp;Huawei Technologies, based in Shenzhen, is working on developing its AI semiconductors and chip-manufacturing capabilities.
The U.S. Department of Commerce has imposed export restrictions on advanced AI processors. To serve its customers in China, AMD designed a chip that aligns with U.S. export regulations, possessing lower performance capabilities compared to its global offerings.
AMD also tapped Thomas Zacharia as the new&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/03/g37469110/amd-hires-thomas-zacharia-to-expand-strategic-ai-relationships" rel="noreferrer noopener">Senior Vice President</a>&nbsp;of Strategic Technology Partnerships and Public Policy. Zacharia will help to drive the global expansion of AMD&#8217;s relationships with governments, non-governmental organizations (NGOs), and other entities.&nbsp;
His role focuses on accelerating the adoption of customized AMD-powered AI solutions for various global projects aiming to utilize AI for public benefit.&nbsp;
Zacharia previously served as the Director of the U.S.&#8217;s largest multi-program science and energy research laboratory.&nbsp;
Meanwhile, AMD launched its latest Spartan UltraScale+ FPGA family, broadening its diverse range of cost-optimized FPGAs and&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/03/g37482199/amd-extends-market-leading-fpga-portfolio-with-amd-spartan-ultrascale-family-built-for-cost-sensit" rel="noreferrer noopener">adaptive SoCs on Tuesday</a>.&nbsp;
These new devices are designed for various I/O-intensive applications at the edge, showcasing the best I/O to logic cell ratio among FPGAs made with 28nm and finer process technologies.&nbsp;
They achieve up to 30% less total power consumption than prior models and feature the most comprehensive security capabilities in the AMD Cost-Optimized Portfolio.
Investors can gain exposure to AMD via&nbsp;AOT Growth And Innovation ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AOTG#NASDAQ">AOTG</a>) and&nbsp;Invesco PHLX Semiconductor ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOXQ#NASDAQ">SOXQ</a>).
Price Actions:&nbsp;AMD shares traded higher by 2.86% at $211.01 premarket on the last check Wednesday.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/government/24/01/36714857/nvidias-key-market-china-wants-to-beat-us-embargo-boosts-chipmaking-machinery-imports-by-14" rel="noreferrer noopener">Nvidia&#8217;s Key Market China Wants To Beat US Embargo, Boosts Chipmaking Machinery Imports by 14%</a>
Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
AMD logo. Photo via Shutterstock.

AOTG

BIDU

SOXQ

AMD Launches Spartan FPGA Family, Boosts AI Team as US Sanctions Challenge China Operations

Alibaba Group Holding Ltd&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) is taking the lead in a financing round that aims to raise at least $600 million for the&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/02/37335567/alibabas-1b-bet-on-ai-start-up-moonshot-marks-major-push-into-generative-tech" rel="noreferrer noopener">Chinese AI startup</a>&nbsp;MiniMax, marking its second significant investment in artificial intelligence this year as it seeks avenues for growth.&nbsp;
This investment positions MiniMax, a two-year-old company focusing on generative AI similar to ChatGPT, at a valuation of over $2.5 billion, with both Alibaba and HongShan (formerly Sequoia China) committing to the financing.&nbsp;
This initiative reflects Alibaba&#8217;s strategy to invest in emerging leaders within the AI sector, mirroring its previous $1 billion investment in Moonshot AI, which also valued the startup at around $2.5 billion, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-03-05/alibaba-backs-2-5-billion-ai-startup-in-second-major-2024-deal?srnd=technology-vp&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
The investment spree indicates Alibaba&#8217;s renewed focus on growth, led by Joseph Tsai and Eddie Wu, amidst efforts to rejuvenate the company after it faced regulatory challenges and an economic downturn.&nbsp;
Given its potential military and commercial applications, the Chinese government&#8217;s emphasis on AI research underscores the technology&#8217;s critical role.&nbsp;
Alibaba&#8217;s early move in 2024 to secure deals in AI sets it apart from other Chinese tech giants like&nbsp;Tencent Holdings Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) and&nbsp;Baidu Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BIDU#NASDAQ">BIDU</a>), which have also been active in funding AI startups.
Alibaba is investing in AI and undertaking significant restructuring to foster independence across its business sectors, from cloud computing to logistics.&nbsp;
The company aims to rejuvenate&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/03/37453606/alibaba-and-jd-com-engage-in-aggressive-price-cutting-intensifying-cloud-services-competition" rel="noreferrer noopener">its cloud segment</a>&nbsp;and leverage AI across its extensive portfolio, which includes entertainment. Tsai highlighted the cloud unit&#8217;s pivotal role in hosting numerous Chinese generative AI firms and serving most of the nation&#8217;s tech companies, showcasing Alibaba&#8217;s strategic investments in cutting-edge technology to maintain its leadership and innovation in the digital era.
Separately, Alibaba also launched a significant discounting campaign in the cloud computing industry, cutting prices by as much as 55% across over 100 services to recapture market share within a fiercely competitive landscape.
This action quickly elicited a reaction from&nbsp;JD.com Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/JD#NASDAQ">JD</a>), a principal rival in the e-commerce and cloud service arenas. It disclosed its pricing reductions on the same day via its WeChat account.
Investors can gain exposure to&nbsp;ProShares Online Retail ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ONLN#NYSE">ONLN</a>) and&nbsp;Global X E-Commerce ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EBIZ#NASDAQ">EBIZ</a>).
Price Action: BABA shares traded lower by 0.92% at $71.35 premarket on the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Wikimedia Commons

EBIZ

ONLN

Alibaba Amplifies AI Investment, Valuing MiniMax Over $2.5B in Latest Financing Round

Following deep losses in 2022, many <a href="https://www.benzinga.com/markets/emerging-markets">emerging market assets</a> were at bargain valuations and the recovery began in late 2022, driven by tech stocks such as Taiwan Semiconductor Manufacturing Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TSM#NYSE">TSM</a>) and Samsung Electronics Co (OTC:<a class="ticker" href="https://www.benzinga.com/stock/SSNLF#OTC">SSNLF</a>). 
Emerging market equities — particularly in the manufactured goods sectors — are deeply tied to the cyclical performance of the U.S. economy, relying on exports to the world&#8217;s biggest consumer market.
The iShares Core MSCI Emerging Markets ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEMG#NYSE">IEMG</a>), an exchange traded fund that includes both TSMC and Samsung among its top holdings, hit a record-high close of $70 in February 2021 as the clamor for new tech from COVID-19 lockdown-restricted U.S. consumers drove domestic shares of both companies to all-time highs.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/05074644/newplot-2024-03-05T114617.717.png" alt="" class="wp-image-239312" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/05074644/newplot-2024-03-05T114617.717.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/05074644/newplot-2024-03-05T114617.717-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
But, as the Federal Reserve embarked on its rate hike cycle in 2022 — that would eventually see U.S. rates hit 5.25-5.5% in mid 2023 — EM equity markets collapsed.
The IEMG ETF slumped 41% from its 2021 peak to an October 2022 trough of $41.44.
At this point, many emerging markets were seen as poisonous to investors. Growing trade tensions between the U.S. and China saw once-popular Chinese-listed stocks such as Alibaba Group Holdings (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) and Tencent Holdings (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) tumble even further.
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37425122/microsofts-genai-advantage-is-distancing-it-from-the-competition-says-analyst">Microsoft&#8217;s GenAI Advantage Is &#8216;Distancing It From The Competition,&#8217; Says Analyst</a>
<h2 class="wp-block-heading">Tech-Driven Recovery</h2>
But by October 2022, growing supply chain problems that limited exports of key supplies of semiconductors and other Asia-manufactured parts and goods drove a revival in emerging markets.
Wedded to this was the vast growth in artificial intelligence research and development that drove the U.S.-listed Magnificent Seven stocks such as Microsoft Corporation and Nvidia Corporation to new highs through 2023.
&#8220;All of this occurred despite the largest increase of interest rates in decades, wars in Ukraine and the Middle East, high energy prices, a regional banking crisis, and a recession in parts of the eurozone,&#8221; said analysts at Lazard Asset Management.
But, unlike in the U.S., where stock indices and the ETFs that track them, recovered to new record highs in 2023, emerging markets losses of 2022 have yet to rebound.
&#8220;We believe emerging markets remain one of the most mispriced asset classes globally,&#8221; Lazard said.
Its analysts added: &#8220;While absolute valuation levels have moved higher since they bottomed in the fourth quarter of 2022, relative to developed market equities, valuations remain generally inexpensive. 
&#8220;Valuation discounts relative to developed markets and U.S. equities are hovering near 30% and 40%, respectively.&#8221;
Even as concerns mount that the valuations of some of the U.S. mega-cap stocks are becoming stretched, investors continue to gravitate towards them. Thus, if a U.S. market correction should occur in 2024, emerging market valuation discounts could present investors with alternatives.
Since its October 2024 trough, the IEMG ETF has regained 22.6% to $50.80. 
<h2 class="wp-block-heading">Mitigating China Risk</h2>
While China remains a risk, its government has pledged support for its ailing markets, which saw the Shanghai Composite index drop 20% between May 2023 and February 2024. Since the February low, the index has recovered 12.8%.
Further news on these measures could come at this week&#8217;s National People&#8217;s Congress, China&#8217;s flagship annual political event, where the Communist party is expected to outline how it plans to deal with its geopolitical and economic challenges, including its ongoing real estate crisis.
If investors don&#8217;t like the China exposure in the IEMG ETF — which is minimal — iShares offers the MSCI Emerging Markets Ex-China ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EMXC#NYSE">EMXC</a>), which strips out Chinese-listed stocks, and has climbed 30% since its October 2022 low.
Now Read: <a href="https://www.benzinga.com/general/entertainment/24/03/37421433/netflixs-2024-gains-is-cinemas-loss-amc-shares-slump-despite-box-office-boost-from-taylor-s">Netflix&#8217;s 2024 Gains Is Cinema&#8217;s Loss: AMC Shares Slump Despite Box Office Boost From Taylor Swift, Beyoncé</a>
Photo: Shutterstock

Analyst Color

Equities

Large Cap

Emerging Market ETFs

Economics

ETFs

EMXC

IEMG

SSNLF

TSMC, Samsung Lead Recovery In Asia's Emerging Markets With AI And Chip Sector Growth

Alibaba Group Holding Limited&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) initiated a significant&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/02/37393754/whats-going-on-with-alibaba-stock-thursday" rel="noreferrer noopener">price reduction strategy</a>&nbsp;in the cloud computing services sector, slashing prices by up to 55% on more than 100 services to regain market share in a highly competitive environment.&nbsp;
This move prompted an immediate response from&nbsp;JD.com Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/JD#NASDAQ">JD</a>), a key competitor in both e-commerce and cloud services, which announced its price cuts on the same day through its WeChat account.&nbsp;
The price war between these tech giants signals an aggressive competition phase, likely to benefit customers but at the expense of the companies&#8217; profits, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-03-01/alibaba-triggers-price-war-in-cloud-computing-with-steep-cuts?sref=TBDibEcD" rel="noreferrer noopener">reports</a>.&nbsp;
Alibaba&#8217;s aggressive pricing strategy is part of a broader effort to combat rivals like&nbsp;Tencent Holdings Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>),&nbsp;Baidu Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BIDU#NASDAQ">BIDU</a>), and&nbsp;JD.com Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/JD#NASDAQ">JD</a>), especially after the company reversed its decision to spin off its cloud business into an independent entity last year.
Under the leadership of CEO Eddie Wu, Alibaba is concentrating on expanding its public cloud services, targeting enterprise customers within China amidst challenges like US sanctions affecting the supply of advanced chips to Chinese firms.&nbsp;
This focus is crucial as Alibaba aims to rejuvenate growth following a period marked by regulatory challenges and the impact of the COVID-19 pandemic on its diverse business segments, including e-commerce, logistics, and cloud computing.&nbsp;
Despite losing some clients to competitors, including state-backed firms and newer entrants like Huawei Technologies Co, Alibaba&#8217;s latest move in the cloud computing price war, echoed by JD.com&#8217;s competitive pricing, underscores the intense rivalry and dynamic nature of China&#8217;s tech industry.
Alibaba also remains engaged in its&nbsp;<a href="https://www.benzinga.com/news/24/02/37335567/alibabas-1b-bet-on-ai-start-up-moonshot-marks-major-push-into-generative-tech" target="_blank" rel="noreferrer noopener">artificial intelligence endeavors</a>&nbsp;to unlock shareholder value as its cloud and logistics unit IPOs succumbed to weakness in the domestic economy.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/04054015/newplot-6.png" alt="" class="wp-image-237382" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/04054015/newplot-6.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/04054015/newplot-6-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Investors can gain exposure to Alibaba via&nbsp;Invesco Golden Dragon China ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PGJ#NASDAQ">PGJ</a>) and&nbsp;Tidal Trust II CoreValues Alpha Greater China Growth ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CGRO#NYSE">CGRO</a>).
Price Action: BABA shares traded lower by 1.05% at $73.85 premarket on the last check Monday.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/03/37421369/alibaba-revamps-management-team-aiming-for-innovation-and-growth-amid-challenges" rel="noreferrer noopener">Alibaba Revamps Management Team, Aiming for Innovation and Growth Amid Challenges</a>
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image by Tada Images via Shutterstock

Alibaba and JD.com Engage in Aggressive Price Cutting, Intensifying Cloud Services Competition

Microsoft Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) is taking a significant step by divesting the Toys for Bob&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/01/36783057/microsofts-major-gaming-shake-up-1-900-layoffs-and-leadership-changes-in-post-acquisition-strategy" rel="noreferrer noopener">video-game studio</a>&nbsp;two decades after its Activision subsidiary scooped the studio.&nbsp;
Toys for Bob, known for developing popular titles such as Skylanders and Crash Bandicoot N. Sane Trilogy, announced through a blog post by studio heads Paul Yan and Avery Lodato that it would be transitioning to operate as an independent studio.&nbsp;
They also expressed an interest in exploring a potential partnership with Microsoft, although the financial details of the divestiture remain undisclosed, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-02-29/microsoft-divests-video-game-studio-behind-skylanders-hit?srnd=technology-vp&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
The decision is portrayed as an opportunity for Toys for Bob to embrace its origins as a &#8220;small and nimble studio,&#8221; a sentiment echoed by the studio&#8217;s leaders. Activision has publicly supported this move.
Founded in 1989, Toys for Bob has achieved notable success, particularly with the Skylanders franchise, which innovatively combined collectible figures with video game play.&nbsp;
The studio has recently contributed to developing the Call of Duty franchise under Activision&#8217;s banner.
This divestiture occurs in the context of Microsoft&#8217;s $69 billion acquisition of Activision in October, marking the largest acquisition in the video game industry to date.&nbsp;
The industry itself is currently experiencing a period of consolidation, highlighted by job cuts and the cancellation of games.&nbsp;
Earlier in January, Microsoft announced the elimination of 1,900 positions within its gaming divisions, impacting numerous employees at Toys for Bob.&nbsp;
Electronic Arts Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EA#NASDAQ">EA</a>) announced&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/02/37394000/ea-to-lay-off-5-employees-shifts-focus-on-core-gaming-franchises-and-online-communities" rel="noreferrer noopener">a significant workforce</a>&nbsp;reduction, planning to lay off 5% of its employees, around 670 people, as part of a broader initiative to streamline operations and cut back on office space and certain game developments.&nbsp;
Similarly,&nbsp;Sony Group Corp&#8217;s&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SONY#NYSE">SONY</a>) PlayStation division and other major players like Microsoft and&nbsp;Tencent Holding Ltd&#8217;s&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) Riot Games have also undertaken substantial layoffs, signaling a widespread industry shift towards consolidation and strategic refocusing.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/01062704/newplot-1.png" alt="" class="wp-image-235621" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/01062704/newplot-1.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/01062704/newplot-1-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
SPDR Select Sector Fund &#8211; Technology&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>) and&nbsp;Fidelity MSCI Information Technology Index ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTEC#NYSE">FTEC</a>) can help investors gain exposure to Microsoft. The ETFs have gained 10% year-to-date.
Price Action: MSFT shares are trading lower by 0.44% at $411.80 premarket on the last check Friday. 
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock

Asset Sales

FTEC

MSFT

Sony Group Corporation American Depositary Shares

SONY

Microsoft Sells Toys for Bob Studio, Eyeing Future Partnerships Amid Gaming Industry Overhaul

Electronic Arts Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EA#NASDAQ">EA</a>) disclosed plans on Wednesday to lay off 5% of its workforce, approximately 670 employees, as part of a broader strategy to consolidate office space and halt development on certain video games.&nbsp;
This decision reflects a continuation of significant downsizing within the video game industry and the broader tech&nbsp;<a target="_blank" href="https://ir.ea.com/financial-information/sec-filings/sec-filings-details/default.aspx?FilingId=17319633" rel="noreferrer noopener">sector</a>.&nbsp;
The company estimated approximately $125 million to $165 million in total charges for the plan.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/general/gaming/24/01/36871658/ea-ceo-signals-ea-sports-metaverse-plans-watch-this-space-as-earnings-exceed-2-3-billion" rel="noreferrer noopener">EA CEO Signals EA Sports Metaverse Plans: &#8216;Watch This Space&#8217; As Earnings Exceed $2.3 Billion</a>
EA&#8217;s CEO, Andrew Wilson, communicated to employees that this move aims to streamline operations and focus on delivering more immersive and interconnected experiences for gamers globally.&nbsp;
The company proposed to complete the restructuring by the end of December essentially.&nbsp;
Wilson explained that the adjustments align with EA&#8217;s strategic priorities and growth plans, emphasizing optimizing their global real estate and discontinuing projects involving future licensed IP deemed unlikely to succeed, CNBC&nbsp;<a target="_blank" href="https://www.cnbc.com/2024/02/28/ea-layoffs-company-to-cut-5percent-of-workforce-or-about-670-employees.html" rel="noreferrer noopener">reports</a>
The layoffs and strategic shift will allow EA to concentrate on its most promising areas, including proprietary intellectual properties, sports titles, and extensive online communities.&nbsp;
Wilson highlighted the company&#8217;s commitment to investing in successful franchises like Apex Legends, Battlefield, EA Sports FC, Madden NFL, and The Sims, aiming to strengthen their position in a rapidly evolving industry.
Sony Group Corp&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SONY#NYSE">SONY</a>) also&nbsp;<a target="_blank" href="https://www.benzinga.com/general/gaming/24/02/37343651/playstation-feels-industry-pressure-sony-cuts-900-jobs-shuts-down-london-studio" rel="noreferrer noopener">announced layoffs of</a>&nbsp;about 900 staff members in its PlayStation division, representing 8% of its workforce.&nbsp;
Similarly,&nbsp;Microsoft Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) and&nbsp;Tencent Holding Ltd&#8217;s&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) Riot Games have recently made substantial job cuts across their gaming divisions.
Roundhill Video Games ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NERD#NASDAQ">NERD</a>) has close to 10% exposure to Electronic Arts and has gained 0.46% year-to-date.
Price Action:&nbsp;EA shares traded higher by 2.17% at $143.12 premarket on the last check Thursday.
Also Read: <a href="https://www.benzinga.com/news/earnings/24/01/36855650/electronic-arts-q3-earnings-highlights-sales-miss-eps-beat-madden-and-soccer-games-power-through" target="_blank" rel="noreferrer noopener">Electronic Arts Q3 Earnings Highlights: Sales Miss, EPS Beat, Madden And Soccer Games Power Through</a>
Photo via Shutterstock

Movers

NERD

EA To Lay Off 5% Employees, Shifts Focus on Core Gaming Franchises and Online Communities

Alibaba Group Holding Limited&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) Cloud announced a significant price reduction of up to 55% on a broad array of its core cloud products, starting Thursday, to&nbsp;<a target="_blank" href="https://www.benzinga.com/government/23/11/35694118/alibaba-and-ai-whats-going-on" rel="noreferrer noopener">regain market share</a>&nbsp;from competitors like&nbsp;Tencent Holdings Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) and&nbsp;Baidu Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BIDU#NASDAQ">BIDU</a>).&nbsp;
Alibaba will offer discounts of up to 55%, averaging 20% across over 100 internet-based services, including data storage and elastic computing.&nbsp;
The decision follows the company&#8217;s surprising cancellation of a spinoff and IPO for its cloud unit, Aliyun, a growth engine essential for AI advancements, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-02-29/alibaba-unveils-big-cloud-price-cuts-as-ai-rivalry-intensifies?srnd=technology-vp&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
This strategic move aims to democratize cloud capabilities amidst the&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/02/37335567/alibabas-1b-bet-on-ai-start-up-moonshot-marks-major-push-into-generative-tech" rel="noreferrer noopener">burgeoning era of AI</a>, ensuring that more enterprises and developers can leverage the benefits of advanced public cloud services.&nbsp;
Liu Weiguang, president of the public cloud business at Alibaba Cloud Intelligence, emphasized the potential growth of China&#8217;s digital market and the company&#8217;s commitment to facilitating more comprehensive access to cloud services, CNBC&nbsp;<a target="_blank" href="https://www.cnbc.com/2024/02/29/alibaba-cloud-slashes-prices-by-as-much-as-55percent-to-fuel-ai-growth-in-china.html" rel="noreferrer noopener">reports</a>.&nbsp;
This initiative aligns with the explosive interest and investment in generative AI technologies.&nbsp;
A McKinsey report from November 2023 underscored the crucial role of cloud infrastructure in supporting generative AI projects, noting the necessity for scalable cloud platforms to manage the complex demands of generative AI applications effectively.&nbsp;
Moreover, Canalys forecasts a 20% growth in global cloud service spending in 2024, driven by the rapid adoption of AI applications.&nbsp;
Analysts and experts weigh in on Alibaba&#8217;s strategic pricing adjustment. Vey-Sern Ling, managing director at Union Bancaire Privee, remarked, &#8220;Alibaba&#8217;s cloud business has been facing tough market conditions and rising competition. The price cuts, under new management, aim to rejuvenate growth, but their effectiveness remains to be seen.&#8221;&nbsp;
Bloomberg Intelligence analysts Catherine Lim and Trini Tan suggest that the price reductions could spur customer acquisition and technology enhancement for Alibaba Cloud, potentially revitalizing revenue growth in the latter half of the fiscal year.
However, skepticism remains regarding the impact of these discounts on Alibaba&#8217;s market share, especially against the backdrop of competitors like&nbsp;Huawei Technologies Co&nbsp;making significant inroads.&nbsp;
&#8220;Alibaba&#8217;s attempt at price reductions in 2023 had limited success, and we anticipate continued market share losses to Huawei through 2024,&#8221; said Bloomberg Intelligence analyst Robert Lea.
This week, Alibaba led a $1 billion investment in Moonshot AI, significantly boosting the startup&#8217;s value to approximately $2.5 billion.&nbsp;
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/29042608/newplot-104.png" alt="" class="wp-image-233777" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/29042608/newplot-104.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/29042608/newplot-104-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Invesco Golden Dragon China ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PGJ#NASDAQ">PGJ</a>) has close to 9% exposure to Alibaba. It has gained 13% last month.
Price Action: BABA shares traded higher by 0.34% at $74.85 premarket on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Alibaba Photo by zhu difeng on Shutterstock

What's Going On With Alibaba Stock Thursday?

Alibaba Group Holding Ltd&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) spearheaded the most significant financing round in a&nbsp;<a target="_blank" href="https://www.benzinga.com/government/23/11/35694118/alibaba-and-ai-whats-going-on" rel="noreferrer noopener">Chinese artificial intelligence</a>&nbsp;startup, showcasing its renewed focus on growth through substantial investments.&nbsp;
The e-commerce giant led a $1 billion investment in Moonshot AI alongside existing investor Monolith Management, significantly increasing the startup&#8217;s value to approximately $2.5 billion.&nbsp;
This move places Alibaba among other significant players like&nbsp;Tencent Holdings Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) and&nbsp;Microsoft Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), splurging in generative AI technologies such as those behind ChatGPT, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-02-27/alibaba-leads-record-deal-to-create-2-5-billion-china-ai-player?srnd=technology-vp&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.&nbsp;
Moonshot AI, founded in March 2023 and known for its generative AI development in China, aims to rival entities like&nbsp;OpenAI&nbsp;and&nbsp;Alphabet Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>)&nbsp;Google.&nbsp;
Following the launch of its Kimi chatbot and a developer platform for AI applications, its valuation skyrocketed from $300 million to $2.5 billion.&nbsp;
Alibaba&#8217;s leadership under Joseph Tsai and Eddie Wu is focused on revitalizing the company through&nbsp;<a href="https://www.benzinga.com/news/23/08/34041964/alibaba-elevates-ai-war-with-advanced-open-source-models" target="_blank" rel="noreferrer noopener">investments in AI</a>&nbsp;and other technologies amidst challenges like regulatory scrutiny and economic downturns. Tsai highlighted the cloud division&#8217;s role in hosting many of China&#8217;s generative AI firms.&nbsp;
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/27040249/newplot-39.png" alt="" class="wp-image-230192" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/27040249/newplot-39.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/27040249/newplot-39-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Alibaba stock lost over 15% in stock value last year as it struggled with its organizational and management restructuring to unlock shareholder value while the domestic economy played a spoilsport. Microsoft gained 63% courtesy of the AI frenzy.
Also this week, Alibaba <a href="https://www.benzinga.com/government/24/02/37308769/whats-going-on-with-alibaba-stock-monday" target="_blank" rel="noreferrer noopener">disclosed more Chinese</a> government ownership within its units than previously known in response to a U.S. Securities and Exchange Commission (SEC) inquiry. 
The Hangzhou-based company revealed in recent U.S. and Hong Kong filings that state-owned enterprises and foreign sovereign wealth funds have stakes in many parts of its conglomerate amidst China&#8217;s Communist Party&#8217;s plans to shape the nation&#8217;s technology sector significantly. 
This admission follows significant antitrust fines imposed on Alibaba and its fintech affiliate Ant Group, highlighting the Chinese government&#8217;s increasing &#8220;golden shares&#8221; influence on major tech companies. Alibaba aims to rejuvenate its diverse business operations under CEO Eddie Wu&#8217;s leadership.
Price Action:&nbsp;BABA shares closed higher by 0.72% at $76.51 on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Alibaba Photo Via Shutterstock

Alibaba's $1B Bet on AI Start-Up Moonshot Marks Major Push into Generative Tech

Alibaba Group Holding Ltd&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) has revealed a&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/01/36754606/alibabas-jack-ma-and-joe-tsai-amplify-stakes-sparking-stock-surge-amid-management-shakeup" rel="noreferrer noopener">more extensive involvement</a>&nbsp;of Chinese government stakes within its various business units than previously disclosed, following a request for information from the U.S. Securities and Exchange Commission (SEC).&nbsp;
Based in Hangzhou, the company disclosed in filings in the U.S. and Hong Kong over the weekend that Chinese state-owned enterprises or foreign sovereign wealth funds partially own numerous entities within its conglomerate.&nbsp;
This disclosure comes amid statements from China&#8217;s Communist Party regarding its intention to influence the nation&#8217;s technology and scientific development sectors significantly, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-02-26/alibaba-discloses-state-ownership-in-more-than-12-business-units?sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/02/37289015/alibaba-to-sell-suning-stake-at-huge-loss-strategic-shift-or-financial-misstep" rel="noreferrer noopener">Alibaba To Sell Suning Stake at Huge Loss: Strategic Shift or Financial Misstep?</a>
China had fined Alibaba a whooping&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/23/11/35843563/whats-going-on-with-alibaba-stock-friday" rel="noreferrer noopener">18 billion yuan</a>&nbsp;in 2021 for antitrust infringements. In July 2023, China ended its regulatory overhaul on fintech affiliate&nbsp;Ant Group&nbsp;by imposing a penalty of 7.12 billion yuan.
The SEC&#8217;s inquiry prompted Alibaba to amend its previous filings, highlighting Chinese government ownership in six direct-sales businesses, accounting for less than 6% of its total revenue for the fiscal year ending March 2023.&nbsp;
Ownership percentages by state-owned enterprises in these businesses ranged from under 10% to below 30%.&nbsp;
Furthermore, Alibaba disclosed ownership stakes by state entities in its ventures spanning sports, health, logistics, and local consumer services sectors, alongside minor investments by sovereign wealth funds from countries such as Singapore, Malaysia, the UAE, and Qatar.
This development adds to the notion of &#8220;golden shares&#8221; held by the Chinese government in leading tech firms, including Alibaba and&nbsp;Tencent Holdings Ltd&nbsp;(OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>), allowing for potential government influence over company decisions.&nbsp;
During its most significant restructuring efforts, Alibaba, under CEO Eddie Wu, is navigating through challenges to rejuvenate its comprehensive portfolio of e-commerce, logistics, and cloud services in a competitive and regulatory intense environment.
Joe Tsai, co-founder of Alibaba, remains optimistic about the company&#8217;s prospects despite facing several hurdles, including organizational changes, the suspension of a cloud computing IPO, and growing e-commerce competition.&nbsp;
<a target="_blank" href="https://www.benzinga.com/markets/asia/24/02/37306011/alibaba-co-founder-joe-tsai-optimistic-about-future-amid-recent-challenges-were-back" rel="noreferrer noopener">In an interview</a>, Tsai highlighted the positive impact of recent restructuring and management changes. He anticipates e-commerce penetration in the country to rise from 30% to over 40% in the next five years.&nbsp;
Tsai and Jack Ma have reinforced their belief in Alibaba&#8217;s future by purchasing more than $200 million in company shares.&nbsp;
Although the IPO for Alibaba&#8217;s logistics arm, Cainiao, has been postponed due to market challenges, Tsai signals readiness for future opportunities.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/26052745/newplot-36.png" alt="" class="wp-image-228635" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/26052745/newplot-36.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/26052745/newplot-36-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Alibaba stock lost 15% in stock value last year as it battled heightened domestic competition from the likes of&nbsp;PDD Holdings Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PDD#NASDAQ">PDD</a>).
Price Action: BABA shares are trading higher by 0.61% at $76.42 premarket on the last check Monday.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/02/37235200/alibabas-taobao-live-revamps-strategy-new-hosts-to-spark-e-commerce-innovation" rel="noreferrer noopener">Alibaba&#8217;s Taobao Live Revamps Strategy: New Hosts to Spark E-Commerce Innovation</a>
Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

What's Going On With Alibaba Stock Monday?

Last week, Nvidia (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) and SoftBank (OTCPK: SFBQF) <a href="https://www.benzinga.com/news/24/02/37158033/whats-going-on-with-soundhound-ai-stock">announced a stake</a> in SoundHound AI (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOUN#NASDAQ">SOUN</a>) through 13F filings, pushing the stock higher by over 60%.
While retail aficionados scrambled to research more about this small company with high potential, stock market veterans would remember that Nvidia invested in the company as early as 2017, participating in a $75 million funding round.
"We&#8217;ve had a business relationship with Nvidia for many years now, and we&#8217;re not at all surprised by the amazing success the company is seeing," SoundHound's CEO Keyvan Mohajer told Benzinga, offering his perspective on arguably the most extraordinary stock run in the recent history.
Still, SoundHound's success didn't come overnight. The company has been around for two decades, tracing its origins to Mohajer's Ph.D. research at Stanford University. He had a 20-year vision, in contrast to venture capitalists who sought quick returns and favored shorter investment cycles.
 In response, Mohajer innovated by introducing the ability to search through humming, a feature that Big Tech had not yet developed at the time. The result was the SoundHound Music App, and with it came the much-needed funding. After almost a decade of hard work, the company started patenting its technology before presenting a <a href="https://www.youtube.com/watch?v=M1ONXea0mXg">demo</a> in 2015.
Now read: <a href="https://www.benzinga.com/top-stories/23/12/36242654/soundhound-ceo-keyvan-mohajer-building-technology-so-advanced-it-feels-like-magic">SoundHound CEO Keyvan Mohajer: Building Technology So Advanced, It Feels Like Magic&#8217;</a>
"We pioneered many concepts, including AI as a platform, Speech-to-Meaning in voice AI, the handling of complex conversations with groundbreaking speed and accuracy, and we built an entire developer ecosystem before even Big Tech," Mohajer said, referring to 270+ patents the company has registered globally.
Besides notable investors like Nvidia, Samsung (OTCPK: SSNLF), and Tencent (OTCPK: TCEHY), SoundHound has attracted attention from SoftBank – one of the largest publicly traded investors in tech companies.
"SoftBank has been at the forefront of pioneering technologies for a long time, and we are pleased to have them as an investor. SoundHound&#8217;s momentum across industries continues to attract both investors and customers, crystalizing our position as a leading AI provider with the potential to drive real disruption," Mohajer said.
SoundHound's products are currently making waves in the restaurant and automotive industry. The firm recently announced a <a href="https://investors.soundhound.com/news-releases/news-release-details/soundhound-and-jersey-mikes-introduce-voice-ai-phone-ordering">partnership</a> with a sandwich chain, Jersey Mike's Subs, launching a voice AI ordering system at 50 locations. Through state-of-the-art technology, customers can make orders but receive a broad range of answers regarding anything from store opening times to parking, allergens and other related information.
Furthermore, SoundHound AI's Voice Assistant with integrated ChatGPT is going to full production with Stellantis' (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STLA#NYSE">STLA</a>) brand, DS Automobiles. Following a successful <a href="https://www.media.stellantis.com/uk-en/ds/press/chatgpt-to-be-offered-as-standard-on-ds-automobiles-following-successful-trial?adobe_mc_ref=&amp;adobe_mc_ref=&amp;adobe_mc_ref=">European pilot</a> program, the French luxury automaker will make the SoundHound Chat AI-powered assistant, Iris, available in 13 languages across 18 countries.
However, looking at the rapidly growing spatial computing market, SoundHound's technology seems inevitable.
With the recent Vision Pro headset and Quest 3 representing the next generation of hardware, the trend is toward downsizing such technology. Spatial computing pioneers like Avi Bar-Zeev see this technology packed in a <a href="https://medium.com/predict/the-road-to-all-day-xr-glasses-46063af34285">product</a> as convenient as a pair of glasses. A product of such size would feature little in terms of buttons, but it would certainly feature a small microphone. Thus, artificial intelligence would be crucial in developing such a device.
"Spatial computing also undoubtedly needs to look to voice and conversational AI to fully unlock its value, and this clearly matches our strengths and offerings perfectly," Mohajer told Benzinga.
When asked about the recent surge of interest in his company, he responded, saying, "It feels right. SoundHound is a major force and leading innovator in AI and has been for nearly two decades. We feel like we&#8217;ve earned the recognition we&#8217;re getting," he said.
Also read: <a href="https://www.benzinga.com/news/earnings/24/02/37230744/nvidias-earnings-around-the-corner-can-ai-stalwart-bulldoze-its-way-to-another-superlative-quarterl">Nvidia&#8217;s Earnings Around The Corner: Can AI Stalwart Bulldoze Its Way To Another Superlative Quarterly Performance?</a>
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EXCLUSIVE: SoundHound's AI Voice Technology Revolutionizes Restaurant, Automotive Industries

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Back in the last decade, I told anyone who would listen about the great news of Alibaba stock (NASDAQ:<a href="https://investorplace.com/stock-quotes/baba-stock-quote/">BABA</a>). <a href="https://investorplace.com/2019/11/alibaba-the-most-profitable-company-in-the-world/">I even bought some shares. </a>



Alibaba was one of China&rsquo;s three &ldquo;Cloud Emperors.&rdquo; Its hyperscaled data centers, like those of Tencent (OTCMKTS:<a href="https://investorplace.com/stock-quotes/tcehy-stock-quote/">TCEHY</a>) and Baidu (NASDAQ:<a href="https://investorplace.com/stock-quotes/bidu-stock-quote/">BIDU</a>), were serious threats to Amazon (NASDAQ:<a href="https://investorplace.com/stock-quotes/amzn-stock-quote/">AMZN</a>), Microsoft (NASDAQ:<a href="https://investorplace.com/stock-quotes/msft-stock-quote/">MSFT</a>), and Alphabet (NASDAQ:<a href="https://investorplace.com/stock-quotes/googl-stock-quote/">GOOGL</a>, NASDAQ:<a href="https://investorplace.com/stock-quotes/goog-stock-quote/">GOOG</a>) in the cloud.



Now Alibaba stock is down 60% from 5 years ago and I wouldn&rsquo;t touch it with a barge pole. It&rsquo;s a story America and its tech investors should be very glad for.



<h2>The Empire Strikes Back</h2>



Chinese dictator Xi Jinping decided that technology was a threat to his regime. <a href="https://www.reuters.com/technology/beijings-regulatory-crackdown-wipes-11-trln-off-chinese-big-tech-2023-07-12/">He cracked down on the industry </a>in favor of car companies like Nio (NYSE:<a href="https://investorplace.com/stock-quotes/nio-stock-quote/">NIO</a>). A manufacturing workforce is a compliant one. Tech workers ask questions.



Some of Xi&rsquo;s actions might be applauded by American liberals. Higher taxes, an end to monopoly, and taking responsibility for what&rsquo;s online are common political demands here. But Xi went further, <a href="https://asia.nikkei.com/Business/Markets/Triple-woes-weigh-on-Alibaba-Tencent-and-other-Chinese-tech-titans">demanding that technology serve him</a>, not the market and not the people.



The result was predictable. I would have predicted it<a href="https://investorplace.com/2021/08/look-past-the-meddling-it-makes-no-sense-for-china-to-keep-alibaba-down/"> if I thought</a> Xi really would kill his economy to retain absolute power. I was wrong. In this case, American conservatives were right.



The three years since the crackdown haven&rsquo;t just cost China $1.1 trillion in market cap. They&rsquo;ve let America lap China&rsquo;s whole economy. China has missed the AI boom because, like all tech innovations, AI rides on the minds of empowered talent. Freedom is the price of competing in technology. If you want people to think differently you first must allow them to think freely.



<h2>Ma Comes Back</h2>



In the crackdown, <a href="https://www.cnn.com/2020/11/04/tech/ant-ipo-beijing-china-intl-hnk/index.html">Alibaba co-founder Jack Ma was Xi&rsquo;s bete noir</a>. Once China&rsquo;s wealthiest man, Ma was driven from the country, eventually taking a position with <a href="https://www.cnn.com/2023/05/02/business/jack-ma-visiting-professor-japan-university-intl-hnk/index.html">Tokyo University</a>.



Ma still visits China. He&rsquo;s still a name. The stock jumped just this week after he praised the company&rsquo;s <a href="https://www.cnbc.com/2024/04/10/alibaba-founder-jack-ma-re-emerges-with-praise-of-transformations.html">reorganization</a>. To hide itself from Xi&rsquo;s wrath, Alibaba is <a href="https://www.cnbc.com/2023/03/28/alibaba-says-it-will-split-into-6-units-that-can-raise-funds-and-ipo.html">splitting itself</a> into six pieces. But even Alibaba insiders weren&rsquo;t fooled. CEO Daniel Zhang <a href="https://www.cnbc.com/2023/06/20/alibaba-announces-eddie-wu-to-succeed-daniel-zhang-as-ceo.html">quit</a>.



Ma&rsquo;s remarks praising management gave Alibaba stock a brief boost. But the stock is flat for 2024, down 26% over the last year. The company is not what it was. Even in e-commerce, Alibaba is being lapped by Pinduoduo (NASDAQ:<a href="https://investorplace.com/stock-quotes/pdd-stock-quote/">PDD</a>), whose Temu site offers cheap, customized goods from a network of online sweatshops.



Alibaba is distracted by the government and its internal turmoil. It is missing the entrepreneurship that once made it great. Sales for 2023 were down from 2022. Profit growth has stalled, and the company has missed several profit estimates.



Ma wants Alibaba to <a href="https://asia.nikkei.com/Business/Companies/Jack-Ma-memo-backs-Alibaba-reforms-urges-staff-to-grasp-AI-opportunity">&ldquo;grasp the opportunity of AI,&rdquo;</a> focusing their efforts on customers. Mistakes were made, he says, but Alibaba is now more <a href="https://www.scmp.com/business/china-business/article/3258442/jack-ma-steps-mistakes-brouhaha-boost-alibabas-morale-urges-staff-embrace-change-and-prepare-ai">&ldquo;simple and agile.&rdquo; </a>



Fine words, but China&rsquo;s smartest people aren&rsquo;t fooled. They&rsquo;re voting against Xi with their feet, <a href="https://www.wsj.com/articles/chinas-brain-drain-threatens-its-future-dbe38096">taking their talent and money with them. </a>



<h2>The Bottom Line</h2>



The gating factor to growth in our time isn&rsquo;t resources like oil, or simple manufacturing prowess, as it was a century ago.



It&rsquo;s people. Trained, empowered, and free minds are the gating factor to growth today. The more talent you can attract, and the more security you can give them, in their work and in their life, the more money you can make.



Alibaba stock can&rsquo;t deliver that because Xi Jinping won&rsquo;t let it. American policymakers are fighting a tariff war, seeking to limit China&rsquo;s access to AI chips. But that isn&rsquo;t why we&rsquo;re winning this Cold War.



Freedom is what&rsquo;s winning this Cold War. Xi won&rsquo;t allow it, Ma can&rsquo;t grant it, and Alibaba is stuck as a result.



On the date of publication, Dana Blankenhorn held LONG positions in AMZN, MSFT, and GOOGL.&nbsp;The opinions expressed in this article are those of the writer, subject to the&nbsp;InvestorPlace.com&nbsp;<a href="https://investorplace.com/corporate/investorplace-publishing-guidelines/" target="_blank">Publishing Guidelines</a>.



<a href="http://www.danablankenhorn.com/">Dana Blankenhorn</a> has been a financial and technology journalist since 1978. He is the author of <a href="https://www.amazon.com/Technologys-Big-Bang-Yesterday-Tomorrow-ebook/dp/B0829C7XSF">Technology&rsquo;s Big Bang: Yesterday, Today and Tomorrow with Moore&rsquo;s Law</a>, available at the Amazon Kindle store. Write him at <a href="https://d.docs.live.net/3ee366d2beb18dea/Documents/InvestorPlace/danablankenhorn@gmail.com">danablankenhorn@gmail.com</a>, tweet him at <a href="http://www.twitter.com/danablankenhorn">@danablankenhorn</a>, or subscribe to his <a href="https://danafblankenhorn.substack.com/">free Substack newsletter</a>.
<div><a href="http://www.danablankenhorn.com/">Dana Blankenhorn</a> has been a financial and technology journalist since 1978. He is the author of <a href="https://www.amazon.com/Technologys-Big-Bang-Yesterday-Tomorrow-ebook/dp/B0829C7XSF">Technology&rsquo;s Big Bang: Yesterday, Today and Tomorrow with Moore&rsquo;s Law</a>, available at the Amazon Kindle store. Tweet him at <a href="http://www.twitter.com/danablankenhorn">@danablankenhorn</a>, connect with him on <a href="https://journa.host/@DanaBlankenhorn"> Mastodon</a> or subscribe to his <a href="https://danafblankenhorn.substack.com/">Substack</a>.</div><h3>More From InvestorPlace</h3>
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	The post <a href="https://investorplace.com/2024/04/the-fall-of-chinas-tech-giant-how-alibabas-woes-expose-the-perils-of-xis-crackdown/">The Fall of China&#8217;s Tech Giant: How Alibaba&#8217;s Woes Expose the Perils of Xi&#8217;s Crackdown</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

The Fall of China's Tech Giant: How Alibaba's Woes Expose the Perils of Xi's Crackdown

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<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
The broad basket of social <a href="https://investorplace.com/industries/communications/media/">media stocks</a> has much to gain as they seek to trim inefficiencies while investing in various growth drivers. Undoubtedly, generative artificial intelligence (AI) can help many big-name social media firms better monetize their swollen user bases. 



Additionally, AI seems to be the magic solution to automating less-than-efficient aspects of operations while driving forth innovative features and profitability opportunities. As AI becomes the new normal, while various firms look to enter the metaverse, social media companies must invest to stay relevant as the &ldquo;spatial&rdquo; medium gradually inches into our everyday lives. 



Undoubtedly, those chunky, often expensive headsets may remain quite niche for now. But social media firms add another dimension to their products; perhaps the headsets will gain the &ldquo;killer apps&rdquo; that we all seek as reasons to make the big splurge on fancy face computers!



<h2>Meta Platforms (META)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2024/01/meta1600-1-300x169.png" alt="In this photo illustration the Meta logo seen displayed on a smartphone and in the background the Facebook logo"><div>Source: rafapress / Shutterstock.com</div></div>Undoubtedly, Meta Platforms (NASDAQ:<a href="https://investorplace.com/stock-quotes/meta-stock-quote/">META</a>) continues to flex its muscles as one of the biggest and best <a href="https://investorplace.com/industries/communications/media/social-media/">social media stocks</a> to buy now. Meta founder and CEO Mark Zuckerberg is a genius, and he&rsquo;s not about to lift his foot off the pedal after driving efficiencies and making cuts to less &ldquo;growthy&rdquo; parts of his business.



Even after Meta&rsquo;s multi-year, multi-bagger run, various analysts see more room for growth as the firm looks to expand its advertising business. Ronald Josey over at Citigroup (NYSE:<a href="https://investorplace.com/stock-quotes/c-stock-quote/">C</a>) sees META stock climbing to $590.00 per share on the back of &ldquo;newer ad innovations,&rdquo; including Advantage+ Creative and a long-form version of its TikTok rival Reels. Such a price target entails an 18% gain from here.



In many ways, Meta stands out as one of the best that the Magnificent Seven has to offer. Whether we&rsquo;re talking about the firm&rsquo;s new advertising tools, its powerful AI team hard at work on next-generation models, its relatively affordable line of headsets to plug into its metaverse, and its &ldquo;moaty&rdquo; family of social apps, Meta has no shortage of growth levers. In the <a href="https://techcrunch.com/2024/04/09/meta-confirms-that-its-llama-3-open-source-llm-is-coming-in-the-next-month/">coming month</a>, Meta will be ready to launch the latest version of its open-source AI model: LLaMA 3



Over the next year, I expect the company to continue outpacing the market as it pulls all of them simultaneously.



<h2>Alphabet (GOOG, GOOGL)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/03/alphabet_goog_googl_1600-300x169.png" alt="Alphabet Inc. (GOOG, GOOGL) and Google logos seen displayed on a smartphone"><div>Source: IgorGolovniov / Shutterstock.com</div></div>Alphabet (NASDAQ:<a href="https://investorplace.com/stock-quotes/goog-stock-quote/">GOOG</a>, <a href="https://investorplace.com/stock-quotes/googl-stock-quote/">GOOGL</a>) and Meta Platforms have seen increased business overlap in recent years. 



Though Alphabet doesn&rsquo;t share Mark Zuckerberg&rsquo;s ambition for the future of the metaverse or virtual reality, both firms are clashing for generative AI dominance. Alphabet&rsquo;s Google Gemini is a capable large language model (LLM) that competes with OpenAI&rsquo;s ChatGPT and Meta&rsquo;s LLaMA.



It&rsquo;s not just AI where Alphabet will compete against Meta for market dominance. Alphabet&rsquo;s YouTube platform competes against Meta&rsquo;s social-media family of apps in a battle for user engagement. In the short-form video scene, YouTube Shorts and Meta Reels could take their battle to the next level if some sort of TikTok ban were implemented in the U.S.



Either way, Alphabet may very well be home to the most influential social media platform. With Shorts and live streaming, it will be interesting to see how the ecosystem evolves in the age of AI-created content.



<h2>Tencent (TCEHY)</h2>



<div><img width="300" height="165" src="https://investorplace.com/wp-content/uploads/2017/12/tcehymsn-300x165.jpg" alt="Tencent stock TCEHY stock"><div>Source: Shutterstock</div></div>Tencent Holdings (OTCMKTS:<a href="https://investorplace.com/stock-quotes/tcehy-stock-quote/">TCEHY</a>) is the social media powerhouse in China, with its dominant super-app WeChat bringing in more than <a href="https://www.statista.com/statistics/255778/number-of-active-wechat-messenger-accounts/">1.3 billion</a> monthly active users as of the latest quarter. Undoubtedly, WeChat has branched out to offer a wide range of services to monetize the firm&rsquo;s massive user base. From payments to gaming, WeChat is pretty much a mobile operating system within a single app.



Though Tencent&rsquo;s dominance puts it at risk of increased regulatory scrutiny, the firm has taken steps to ensure it&rsquo;s playing by the Chinese government&rsquo;s rules to avoid costly penalties and hurdles that could weigh on future growth.



At the time of this writing, TCEHY shares trade at 23.4 times trailing price-to-earnings (P/E), making it one of the cheapest mega-cap social-media titans in the world. Still, off over 61% from its all-time high, Tencent shares look like a rather untimely bargain for those hungry for exposure to the Chinese economy while it&rsquo;s still in a slump. 



On the date of publication, Joey Frenette owns shares of Alphabet (Class C). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com&nbsp;<a href="https://investorplace.com/corporate/investorplace-publishing-guidelines/">Publishing Guidelines</a>.
<div>Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.</div><h3>More From InvestorPlace</h3>
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Despite facing several challenges, the Chinese economy has demonstrated exceptional resilience lately. With several stimulus measures in place and the pipeline, should China investors consider buying Alibaba Group (BABA) and Tencent Holdings (TCEHY)? Read on to learn my view... China, the world's second-largest economy, has faced several challenges, including a struggling property market, record youth unemployment, subdued consumption, deflation, loss of consumer confidence, and declining birth rates.  However, the Chinese authorities are undertaking several corrective measures to get the economy back on track.
Against this promising backdrop, investors looking to invest in China could consider buying fundamentally strong stocks Alibaba Group Holding Limited (<a href="https://stocknews.com/stock/BABA/">BABA</a>) and Tencent Holdings Limited (<a href="https://stocknews.com/stock/TCEHY/">TCEHY</a>).
According to official figures issued by the National Bureau of Statistics, China's economy expanded faster than predicted in the first quarter. GDP grew <a href="https://www.cnbc.com/2024/04/16/chinas-q1-gdp-grew-5point3percent-in-the-first-quarter-beating-expectations.html">5.3%</a> year-over-year during the first quarter, driven by a surge in industrial output and retail sales. The strong GDP expansion in the first quarter positions the country well to achieve its <a href="https://www.cnbc.com/2024/03/05/china-gdp-target-2024.html">5% growth target for 2024</a>.
The stimulus measures are beginning to show their desired effects as China's manufacturing activity expanded for the first time in six months in March. The purchasing managers' index (PMI) rose to <a href="https://www.reuters.com/world/china/chinas-march-factory-activity-expands-first-time-six-months-2024-03-31/">50.8 in March</a> from 49.1 in February. Moreover, China's exports and imports both rose <a href="https://finance.yahoo.com/news/chinas-march-exports-imports-shrink-074250074.html">1.5% year-over-year</a> in the first quarter.
Chairman of the Standing Committee of the National People's Congress, Zhao Leji, believes that China's import and export of goods will exceed <a href="https://www.reuters.com/world/china/chinas-economy-will-provide-strong-driving-force-world-recovery-2024-03-28/">$32 trillion in the next five years</a>. Retail sales of consumer goods rose <a href="https://www.fibre2fashion.com/news/retail-industry/china-s-retail-sales-increase-4-7-yoy-in-q1-2024-294576-newsdetails.htm">4.7% year-over-year in the first quarter</a>, and online retail sales grew 12.4% over the prior-year period.
With policymakers rolling out support measures to revive household consumption, private investment, and market confidence, domestic demand is expected to recover strongly.
Considering these encouraging trends, let's discuss the fundamentals of the two <a href="https://stocknews.com/category/china/">China</a> stock picks, starting with the second choice.
Stock #2: Alibaba Group Holding Limited (<a href="https://stocknews.com/stock/BABA/">BABA</a>)
BABA, headquartered in Hangzhou, China, provides merchants, retailers, and other businesses with technology infrastructure and marketing reach for enhanced user and customer engagement. It operates in China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, Innovation Initiatives, and Others segments.
BABA's trailing-12-month <a href="https://www.investopedia.com/terms/e/ebitda-margin.asp">EBITDA margin</a> of 19.59% is 77.2% higher than the industry average of 11.05%. Likewise, the stock's trailing-12-month net income margin of 10.81% is 133.4% higher than the 4.63% industry average. Also, its trailing-12-month levered FCF margin of 15.77% is 185.5% higher than the 5.52% industry average.
For the fiscal third quarter that ended December 31, 2023, BABA's revenue increased 5.1% year-over-year to $36.67 billion. Its adjusted EBITA grew 2% from the year-ago value to $7.44 billion. The company reported non-GAAP net income and non-GAAP earnings per share of $6.75 billion and $2.37, respectively.
In addition, as of December 31, 2023, the company's cash and cash equivalents came in at $35.89 billion, and its current assets were $113.70 billion.
Analysts expect BABA's revenue for the quarter ended March 31, 2024, to increase 2.6% year-over-year to $30.37 billion. For the fiscal year ended March 31, 2024, BABA's EPS and revenue are expected to grow 9.4% and 5.5% year-over-year to $8.48 and $130.20 billion, respectively.
The company surpassed the consensus EPS estimates in three of the trailing four quarters. Shares of BABA have gained marginally over the past three months to close the last trading session at $69.61.
BABA's <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> reflect this promising outlook. It has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
BABA has a B grade for Momentum and Quality. Within the B-rated <a href="https://stocknews.com/category/china/">China</a> industry, it is ranked #9 out of 39 stocks. To see the additional ratings of BABA for Growth, Value, Stability, and Sentiment, <a href="https://stocknews.com/stock/BABA/">click here</a>.
Stock #1: Tencent Holdings Limited (<a href="https://stocknews.com/stock/TCEHY/">TCEHY</a>)
Headquartered in Shenzhen, People's Republic of China, TCEHY is an investment holding company that offers value-added services (VAS), online advertising, fintech, and business services internationally. It operates through VAS, Online Advertising, FinTech, Business Services, and Others segments.
TCEHY's trailing-12-month Return on Common Equity of 15.06% is 421.8% higher than the 2.89% industry average. Its trailing-12-month levered Return on Total Assets of 7.30% is 547.2% higher than the 1.13% industry average. Additionally, its 18.92% trailing-12-month net income margin is 712.5% higher than the 2.33% industry average.
During the fourth quarter ended December 31, 2023, TCEHY's revenues increased 7.1% year-over-year to RMB155.20 billion ($21.44 billion). Its gross profit increased 25.5% from the year-ago value to RMB77.56 billion ($10.72 billion).
For the same quarter, the company's non-IFRS profit attributable to equity holders of the company rose 42.6% year-over-year to RMB42.68 billion ($5.90 million). Also, its EPS for profit attributable to equity holders of the company stood at RMB2.80.
For the quarter that ended March 31, 2024, TCEHY's EPS and revenue are expected to increase 32.7% and 2.2% year-over-year to $0.64 and $21.90 billion, respectively. Over the past three months, the stock has gained 7.6% to close the last trading session at $38.38.
TCEHY's strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system.
It is ranked #7 in the same industry. It has a B grade for Stability and Sentiment. To see the additional TCEHY ratings for Growth, Value, Momentum, and Quality, <a href="https://stocknews.com/stock/TCEHY/">click here</a>.
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TCEHY shares were trading at $38.21 per share on Wednesday morning, down $0.17 (-0.44%). Year-to-date, TCEHY has gained 1.11%, versus a 5.84% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Rashmi Kumari</h2> <img src='https:/wp-content/uploads/2022/10/Rashmi-Kumari_headshot_2-1.jpg' style="float:left; padding:5px;width:125px;">Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.<a href="https://stocknews.com/authors/?author=rashmi-kumari">More...</a>The post <a href=https://stocknews.com/news/tcehy-baba-are-tcehy-and-baba-the-must-have-stocks-for-china-investors/>Are TCEHY and BABA the Must-Have Stocks for China Investors?</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>