Alibaba’s $10.2 Billion Share Placement Triggers Tech Sell-Off in China and Hong Kong

Alibaba raised $10.2 billion in Hong Kong's largest follow-on share offering, selling 710 million shares at a 3.6% discount. Proceeds will fund AI infrastructure. Stock fell 8.5% on Monday. Chairman and CEO bought shares. Alibaba plans $56.5 billion AI investment over three years. Cloud division revenue up 38% year-over-year.

Alibaba's U.S. shares fell 2% after announcing a $10.2B share issuance for AI projects. Chipmakers like Marvell, AMD, and Intel declined. Memory stocks Sandisk, Western Digital, Seagate, and Micron also dropped. Nucor and Steel Dynamics rose over 3% after U.S.-Canada trade talks collapsed. Robinhood and Coinbase fell 1% and 2% respectively as Bitcoin prices stalled. Jersey Mike's Subs gained 0.5% on buy ratings from analysts.

Alibaba Group (BABA) shares fell 8.1% in Hong Kong after raising $10.2B via equity placement at an 8.4% discount. Proceeds will fund AI investments, including computing infrastructure and cloud services. Q2 capital expenditure surged 75% due to AI spending, leading to a 75% drop in net profit despite a 9% revenue increase.

Alibaba executives Joseph Tsai and Eddie Wu bought HK$120 million ($15.3 million) in shares following a stock price drop after an $80 billion capital raise. The offering, priced at a 3.6% discount, saw strong institutional demand. Alibaba's shares fell 8.5%, their largest decline since early 2025. The company plans to use funds for AI investments, including its Qwen AI model family.

Alibaba's shares dropped 10% after pricing a record $10.2B share placement in Hong Kong to fund AI expansion. The company plans to sell 710M shares at a 3.6% discount, with proceeds going entirely to AI investments. Alibaba's CEO cited the need to build computing capacity for long-term AI growth, despite a 75% profit decline in the recent quarter due to AI spending. The company has committed to investing 380B yuan in AI and cloud over three years, with half already spent.

S&P 500 and Nasdaq futures fell Monday ahead of U.S. sanctions on Iran, Fed Chair Kevin Warsh’s speech, and Nvidia’s earnings. Nvidia reports Wednesday, with investors watching for growth signs. Alibaba’s U.S.-listed shares dropped 3.4% after a $10.2 billion discounted share sale. Birkenstock gained over 3% after strong revenue and raised guidance. PulteGroup rose 2.1% following an upgrade by Wolfe Research. Jersey Mike’s Subs rose slightly after bullish brokerage ratings.