FOMO builds as Alibaba extends $250 billion AI-fueled comeback

Asian stocks made a modest advance at the open after optimism around artificial intelligence propelled global equities to fresh records.

Stocks in Japan opened higher, with Hitachi Ltd. shares advancing as much as 8.1%. The S&P 500 rose 0.1% while the Nasdaq 100 climbed 0.4%, both to new highs, as OpenAI’s share sale boosted technology stocks.

Alibaba Group Holding Ltd. jumped 3.6% in US trading to the highest level in more than four years while a gauge of Chinese tech shares in the US rose 1.1% to a three-year high.

“Tech momentum shows no sign of fading — as if gravity doesn’t exist — with headwinds brushed aside and every AI headline sparking bursts of euphoria,” said Hebe Chen, an analyst at Vantage Markets in Melbourne.

The moves were a sign the bullish momentum in US tech overcame concerns linked to the Trump administration’s plan to slash “thousands” of federal jobs in the second day of a government shutdown. Republicans sought to use the threat of permanent cuts to encourage Democrats to vote to reopen the government. US President Donald Trump plans to meet with White House Budget Director Russell Vought to discuss the plan.

In Asia, Bank of Japan Governor Kazuo Ueda is expected to speak in Osaka. Markets are closed in China and South Korea.

Elsewhere, Treasury Secretary Scott Bessent predicted a “pretty big breakthrough” in the next round of trade talks with China. The comments come as the Trump administration takes steps to support US farmers hurt by a decline in Chinese purchases.

Traders were also contending with the temporary blackout in economic readouts after Thursday’s weekly initial jobless claims numbers were delayed by the government closure. Figures from outplacement firm Challenger, Gray & Christmas showed US employers dialed back hiring plans in September, even though they also announced fewer job cuts.

The Bureau of Labor Statistics’ nonfarm payrolls data on Friday will also likely be delayed.

“A quick shutdown that sets back the report a few days might not move the needle, but a long one that also threatens release of mid-month inflation data might keep the Fed on the sidelines, unwilling to cut rates at its late October meeting without the data,” according to Joe Mazzola, head trading and derivatives strategist at Charles Schwab Corp. “There are signs that a standoff could be lengthy, with Treasury Secretary Scott Bessent saying a prolonged closure might hurt US economic growth.”

Money markets are still almost fully pricing a quarter-point Fed cut at the end of the month and are widely expecting another in December to support the labor market.

In commodity markets, gold edged higher while oil was on track for its biggest weekly decline since late June, ahead of an OPEC+ meeting that’s expected to result in the return of more idled barrels, exacerbating concerns around oversupply.

Pacific Assets (PAC)

02/10/2025

Results analysis from Kepler Trust Intelligence

Pacific Assets (PAC) has released its half-year results for the period ending 31/07/2025. Over the period, NAV decreased by 3.7% on a total return basis, compared to an increase of 9.5% for the trust's benchmark, the MSCI AC Asia ex Japan Index. longer-term performance remains robust, with five-year returns of 44.6% versus the formal benchmark of 28% to 31/07/2025.

Performance was mostly attributable to India, with a large number of high-quality, well-managed Indian companies held. Whilst operational performance was robust, sentiment impacted share prices and detracted from returns. Positives centred around firms linked to the AI trade.

PAC's previous alternative performance objective of beating UK CPI +6% has been retired following the proposed introduction of a performance-related tender offer. This will allow investors to redeem up to 25% of share capital close to NAV should the company fail to beat a set target over a seven-year period.

The share buy-back programme will be unaffected. In the period, over 2.2m shares were repurchased, with a further 1.7m shares bought back since. The share price total return was 0.3%, contributing to the discount narrowing in the period.

A lower, tiered management fee was announced, based on the lower of market capitalisation or NAV, further incentivising the management team to narrow the discount. The new structure be 0.75% on the first £500m of assets, then dropping to 0.65%.

Doug and the team identified several new stocks most notably in China as government regulation evolved. Recent additions include Alibaba and S.F. Holding, a leading logistics firm which is still founder-led and growing an enduring franchise.

Chairman Andrew Impey commented on the governance changes: "A revised, competitive investment management fee [and] newly introduced Conditional Tender Offer further aligns the portfolio manager with shareholders," also acknowledging that the manager's "clearly differentiated investment process has delivered robust, long-term, risk-adjusted returns."

Kepler View

These results are, in our view, significant, due to the proposal of several shareholder-friendly initiatives which should improve the appeal of the trust over multiple time periods.

The conditional tender helps reduce discount risk in our view and is a pragmatic compromise between the manager's long-term focus, and the awareness of recent returns. It has set an ambitious target although outperformance of this magnitude has been delivered previously.

The team has made several changes, most notably adding to China. This has narrowed the long-standing underweight although new ideas remain high-quality and should reduce the portfolio's relative country risks. The trust is arguably better placed to capture the region's success stories, whilst also maintaining the quality focus that has supported in more volatile periods.

The reduction in the management fee is also positive and can accumulate over the years, whilst also sending a positive signal to investors and further aligning their interests with managers.

We think these changes could help narrow the discount. PAC currently has the widest discount in the peer group (as at 01/10/2025) which we believe could present an opportunity.

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By George Glover and Callum Keown

Alibaba and other Chinese tech stocks rose on Thursday, benefiting from an ongoing artificial-intelligence rally.

Shares in the e-commerce platform Alibaba closed 3.5% higher in Hong Kong trading, while Baidu gained 4.5% and JD.com rose 3.1%. Hong Kong's Hang Seng index added 1.6%.

Alibaba's American depositary receipts climbed 2.8% ahead of the open, after rising 2.3% on Wednesday. The shares surged last month after the company hiked spending on AI, unveiled a new language model and partnered with Nvidia.

Now there's more evidence of its ambitions starting to pay off. The tech conglomerate's AI-driven mapping app — Amap — logged more than 360 million daily active users on the first day of China's eight-day National Day holiday Wednesday, a record for the platform.

On top of that, excitement has been building about DeepSeek's newest AI model, which the tech company said had better training and reasoning and can operate at a lower cost.

Alibaba's ADRs are now up more than 115% in 2025, while the Hong Kong shares have risen 122% this year. The stock's strength this week comes as "global investors look for alternatives to the highly stretched Magnificent Seven valuations," Scope Markets analyst Joshua Mahony said.

Meanwhile, preliminary data showed that China residential home sales steadied in September, boosting hopes that the Asian country may soon be able to exit a seemingly never-ending property-market crisis.

Write to George Glover at george.glover@dowjones.com and Callum Keown at callum.keown@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

By George Glover and Callum Keown

Alibaba and other Chinese tech stocks rose on Thursday, benefiting from an ongoing artificial-intelligence rally.

Shares in the e-commerce platform Alibaba closed 3.5% higher in Hong Kong trading, while Baidu gained 4.5% and JD.com rose 3.1%. Hong Kong's Hang Seng index added 1.6%.

Alibaba's American depositary receipts climbed 2.8% ahead of the open, after rising 2.3% on Wednesday. The shares surged last month after the company hiked spending on AI, unveiled a new language model and partnered with Nvidia.

Now there's more evidence of its ambitions starting to pay off. The tech conglomerate's AI-driven mapping app — Amap — logged more than 360 million daily active users on the first day of China's eight-day National Day holiday Wednesday, a record for the platform.

On top of that, excitement has been building about DeepSeek's newest AI model, which the tech company said had better training and reasoning and can operate at a lower cost.

Alibaba's ADRs are now up more than 115% in 2025, while the Hong Kong shares have risen 122% this year. The stock's strength this week comes as "global investors look for alternatives to the highly stretched Magnificent Seven valuations," Scope Markets analyst Joshua Mahony said.

Meanwhile, preliminary data showed that China residential home sales steadied in September, boosting hopes that the Asian country may soon be able to exit a seemingly never-ending property-market crisis.

Write to George Glover at george.glover@dowjones.com and Callum Keown at callum.keown@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

0859 GMT - Siemens Energy's shares have recovered from August's dip as the company rides a wave of solid industry trends with earnings tailwinds, Citi analysts write. Investors are likely to be more focused on its medium-term targets than its fourth-quarter results, which are due for publication Nov. 14, the analysts write. Citi sees a possibility of the company guiding for a group profit margin in 2028 of 13% to 15%, driven by 18% to 20% margins in its gas and grid divisions. Shares trade up 5.2% at 109.65 euros. (adam.whittaker@wsj.com)

0837 GMT - Copper prices rise in early trading, driven by mounting supply concerns due to disruptions in Chile and Indonesia. Futures on the London Metal Exchange trade 1.2% higher to $10,491.50 a metric ton, after hitting $10,520.50 earlier in the session. Chile's copper production plunged by 9.9% on year in August--the steepest decline since 2023, according to ANZ analysts--following a deadly accident at Codelco's El Teniente mine in July. That adds to concerns of tightening global supply after operations at Indonesia's Grasberg mine were halted last month due to a fatal mudslide accident. Meanwhile, aluminum futures on the LME rise 0.4% to $2,704.50 a ton. (giulia.petroni@wsj.com)

0833 GMT - Alibaba's growth momentum could accelerate thanks to its AI and cloud businesses, J.P. Morgan analysts say in a research note. Alibaba's share price has outperformed the sector average, mainly due to better-than-expected 2Q cloud revenue growth and management's confident articulation of its investment strategy in food delivery and quick commerce, they say. The analysts raise the cloud revenue forecast on Alibaba for fiscal year 2027 and 2028 by 2% and 6%, respectively. Value creation by Alibaba Cloud's AI services and applications is also likely to help the China e-commerce segment's profitability, they note. The bank raises its target price to HK$240.00 from HK$165.00 on stronger financial forecasts and higher valuation multiples. Shares last closed at HK$183.10. (tracy.qu@wsj.com)

0829 GMT - Overall property buyer sentiment remains weak in Shanghai after the city eased home purchase restrictions in August, UOB analysts say in a research note. In urban areas, policy support and scarce locations have revived investment interest among eligible buyers, while purchases in non-core areas were mainly for self uses, the analysts say after visiting Shanghai. Meanwhile, home prices in Shanghai's secondary market could remain under pressure, they say, citing second-hand home agencies. New home projects are likely to adopt the city's newly-introduced standards for "quality homes," which lowers the percentage of balcony area that should be counted in saleable gross floor area, over the next six months, they note. UOB maintains a market weight rating on the sector, with China Resources Land as its top pick. (sherry.qin@wsj.com)

0825 GMT - Shares of European companies that supply chip-making tools are on the rise after Samsung Electronics struck an initial agreement with OpenAI to establish AI infrastructure under the Stargate project. The partnership raises hopes among investors that Samsung will need to purchase more chip-making tools. Shares of ASML Holding--which sells equipment to Samsung--are up 4.2% in Amsterdam. Shares of ASML's smaller rival, ASM International, are up 5.8%. Shares of BE Semiconductor Industries, the Dutch supplier of semiconductor assembly equipment, rise 6.3%. (mauro.orru@wsj.com)

0814 GMT - Shares in London-listed miners rose on the back of a boost to copper prices driven by supply-concerns stemming from an accident at Indonesia's Grasberg mine. According to ANZ Research analysts, the mudslide at the project--one of the world's largest--has taken 3% of global mine supply offline. Freeport-McMoRan, the mine's operator, reduced its sales guidance by 35% for 2026, with early estimates pointing at the mine not returning to full capacity until early 2027. Copper on the London Metal Exchange is trading around $10,409 a metric ton. Rio Tinto shares are up 1.4%, Anglo American rises 1.1%, and Antofagasta is up 1%. (anthony.orunagoriainoff@dowjones.com)

0808 GMT - Kuaishou Technology is set to benefit from its video-generation business, Jefferies analysts say in a research note. "We see the release of [OpenAI's video generation model] Sora 2 attracting industry attention on its strong video generation capabilities," they say. The Chinese short-video company has a video-generation model called Kling, which is a bright spot for the company. Video generation is a huge market, the analysts add. Jefferies keeps a buy rating on Kuaishou and raises its target price to HK$106.00 from HK$94.00. Shares are 8.6% higher at HK$91.65. (tracy.qu@wsj.com)

0758 GMT - Analysts are likely to question whether Tesco can maintain its performance and market-share increase in the second half year, Jefferies analysts write. The U.K.'s number one grocer by market share reported a 4.3% rise in like-for-like sales growth and raised its full-year guidance as it benefited from market-share gains from weaker competitors. Still, the current economic environment and increased pricing competition within the sector is likely to make the rest of the year tough. Shares are up 2.2% at 439.30 pence. (ian.walker@wsj.com.)

0745 GMT - Stellantis reported a 6.4% jump in third-quarter U.S. sales to 324,825 vehicles, sending shares higher. "Fueled by sales growth across the Jeep, Ram, Chrysler and Fiat brands, our U.S. sales saw strong results in the third quarter, including the month of September, which was our highest monthly market share in the U.S. in 15 months," said Jeff Kommor, head of U.S. sales. Stellantis said it is taking action to keep sales momentum moving forward, including bringing back a V8-powered Ram truck, and introducing a new Dodge Charger Scat Pack and Jeep Cherokee. Jeep brand sales rose 11% on year to 160,564 vehicles, while Ram sales fell 4.8% to 103,717 vehicles. Chrysler sales rose 45%, Dodge sales fell 1.7%, Fiat sales rose 1.6% and Alfa Romeo sales fell 21%. Shares rise 6%. (dominic.chopping@wsj.com)

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0705 GMT - Bitcoin remains stronger after reaching a seven-week high overnight as U.S. stocks rose to fresh records after a weak U.S. private payrolls data fuelled expectations for further interest-rate cuts. ADP data on Wednesday showed private employers unexpectedly shed 32,000 jobs in September. The August payrolls figure was also revised to a loss of 3,000 from an initial increase of 54,000. The data prompted markets to fully price in another rate cut from the Federal Reserve at the October 29 meeting, LSEG data show. A U.S. government shutdown means the release of official data, including Friday's nonfarm payrolls report, might be delayed. Bitcoin rises 0.9% to $118,614 after hitting a high of $119,473 overnight, according to LSEG. (renae.dyer@wsj.com)

0702 GMT - Tesco's strong top-line performance was boosted by market-share gains from weaker competitors, RBC's Manjari Dhar and Richard Chamberlain say. The U.K. grocer's market share is up 77 basis points in the first half. Tesco reported first-half revenue of 36.04 billion pounds compared with 34.77 billion pounds. Its top line was also supported by U.K. food inflation coming in higher than expected, so far having limited volume impact, the analysts write in a note. The company's strong performance led to robust free cash flow generation during the period, they add. (aimee.look@wsj.com)

Alibaba's growth momentum could accelerate thanks to its AI and cloud businesses, J.P. Morgan analysts say in a research note. Alibaba's share price has outperformed the sector average, mainly due to better-than-expected 2Q cloud revenue growth and management's confident articulation of its investment strategy in food delivery and quick commerce, they say. The analysts raise the cloud revenue forecast on Alibaba for fiscal year 2027 and 2028 by 2% and 6%, respectively. Value creation by Alibaba Cloud's AI services and applications is also likely to help the China e-commerce segment's profitability, they note. The bank raises its target price to HK$240.00 from HK$165.00 on stronger financial forecasts and higher valuation multiples. Shares last closed at HK$183.10. (tracy.qu@wsj.com)