Alibaba, Baidu pace Chinese tech stock gains as data shows economic recovery
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Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU) were among the biggest gaining Chinese tech stocks on Wednesday after economic data pointed to a recovery.
China's official manufacturing purchasing managers index came in at a reading of 52.6, while the Caixin PMI rose to 51.6, both indicating economic expansion.
Alibaba (BABA) gained 5.2%, while Baidu (BIDU) gained 5.8%. JD.com (NASDAQ:JD), Bilibili (BILI), NetEase (NTES), Pinduoduo (PDD) and Weibo (WB) also saw strong gains, led by a 6.6% rise for NetEase (NTES).
Late last month, investment firm Baird said Alibaba (BABA) is likely to keep seeing continued benefits from the post-COVID Chinese recovery, especially in the cloud.
"...[W]e expect Alibaba to continue benefiting from improvements in demand and supply chain, and we remain constructive on the stock as a China recovery play," analyst Colin Sebastian, who has an outperform rating on Alibaba, wrote.
Alibaba (BABA) recently reported fourth-quarter results that showed cloud revenues rose 3% year-over-year.
However, the company's management said it expects "strong demand" for its cloud services, which Sebastian said should come from growth in the public cloud and technologies including artificial intelligence and virtual reality.
Investment firm Truist Securities recently said Alibaba's (BABA) fourth-quarter results "bodes well" for the future.