Why Alibaba Stock Is Rallying Today

Most of China's top technology stocks are participating in Wednesday's broad turnaround. Leading the charge, however, is Alibaba Group (BABA +10.93%). As of 12:22 p.m. ET shares of the e-commerce giant are up 11.2%... its best day in nearly a year.

Thank UBS, mostly, although several different developments are contributing to the bullish effort.

Analysts provide the catalyst

Down by nearly half since its October peak, BABA shares started today's trading session already ripe for a rebound. UBS's Kenneth Fong triggered it, though, noting on Wednesday that the company likely produced marginwidening revenue growth during the quarter ending in June, led by 45% top-line growth from its cloud computing unit. Most analysts expect to see accelerating revenue growth in August's release of the company's fiscal Q1 results, in fact, largely driven by growth of its artificial intelligence business.** Jefferies**' analysts also added this morning "macro headwinds and softness in consumer sentiment are in the price."

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NYSE: BABA

Alibaba Group

Today's Change

(10.93%) $10.73

Current Price

$108.87

Key Data Points

Market Cap

$236BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$105.68 - $109.35

52wk Range

$91.99 - $192.67

Volume

1.4M

Avg Vol

11.9M

Gross Margin

39.26%

Dividend Yield

1.07%

Analysts' fresh optimism regarding Alibaba isn't the only bullish factor at work on Wednesday, however. Although it's not company-specific, similar gains from shares of other Chinese tech names like** Baidu** (BIDU +4.51%) and** JD.com** (JD +3.96%) point to a broad turnaround effort for most of the region's beaten-down technology stocks.

This tailwind also allows investors to look at recent news about Alibaba through a more bullish lens. This includes Monday's decision from a U.S. federal judge to block -- albeit only temporarily -- the Pentagon from designating Alibaba as a Chinese military company under its Section 1260H rules, which would prevent it from lobbying within the United States.

A hint worth taking for risk-tolerant investors

A big day like today is a tough act to follow. As such, don't be surprised if BABA shares show some weakness as soon as Thursday.

Just don't lose perspective on the way this stock and its peers ebb and flow. Most artificial intelligence stocks tend to move as a herd as the sentiment surrounding the AI revolution evolves. Rather than lasting a mere single day, these moves can last weeks, if not months. They often simply start with that one decisive reversal of an aging trend... like today's bounce from a pullback that began months ago.