Why Alibaba stock was soaring today

A share buyback announcement helped trigger another gain for the Chinese tech giant.

| More on:
Child with superhero mask and cape flies after jumping on sofa

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened?

Shares of Alibaba (NYSE: BABA) were moving higher on Tuesday after the Chinese tech giant announced an increase in its share buyback program, signalling that management sees the stock as undervalued.

As of 12:22pm ET, the stock was up 10.7%.

So what?

On Tuesday morning, management revealed that the board had voted to boost the size of its share repurchase authorization from $15 billion to $25 billion, equivalent to about 8% of the stock's market cap after the morning's gains. The company did not explain the move, but called it a sign of confidence about its continued growth.

Alibaba shares surged last week after China's Vice Premier Liu He said that the government would act to support stability in the economy and financial markets, and that its ongoing crackdown on tech companies should be over soon. That announcement followed more than a year of tightening regulations on that country's tech companies. Alibaba was particularly targeted. The government in Beijing blocked the planned spinoff and IPO of Ant Group, its financial arm; levied a $2.8 billion anti-monopoly fine against it; and forced it to divest itself of several of its media assets. Those actions and similar ones involving other companies have rattled investor confidence in China. Alibaba stock fell by as much as 75%, and its peers experienced sharp declines as well.

Now what?

Following last week's announcement, Chinese officials have continued to send conciliatory signals to the market. Beijing now seems to believe its prior policies have gone too far, given that China's GDP growth slowed to just 4% in the fourth quarter, and Chinese stocks have lost more than $2 trillion in market cap.

Alibaba's share buyback announcement won't make a huge difference, but it's the latest sign that the tech giant is on the rebound after a forgettable year for investors.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Should you invest $1,000 in Alibaba Group right now?

Before you buy Alibaba Group shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Alibaba Group wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Jeremy Bowman owns Alibaba Group Holding Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Prediction: This artificial intelligence (AI) stock will be worth $5 trillion in 3 years

Let's take a closer look at the catalysts that could propel this stock toward that valuation.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
International Stock News

This Artificial Intelligence (AI) chipmaker just got a game-changing boost from Amazon, and Nvidia investors should be paying close attention

Amazon just made a notable investment in Nvidia's top rival.

Read more »

Happy man working on his laptop.
International Stock News

A once-in-a-decade opportunity: Here's why I'm buying Alphabet stock like there's no tomorrow

Alphabet's stock rarely gets this cheap, and right now could be a once-in-a-decade opportunity to scoop up shares at a…

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
International Stock News

Is Warren Buffett's Berkshire Hathaway the smartest investment you can make today?

So, with all the uncertainty, is Berkshire Hathaway the smartest investment you can make today?

Read more »

Warren Buffet
International Stock News

7 ways Warren Buffett changed my investing approach

I'm a big fan of Warren Buffett, and have been for many years.

Read more »

iPhone with the logo and the word Google spelt multiple times in the background.
International Stock News

Down 12% this year, should you buy Alphabet stock?

The Google owner is underperforming the Nasdaq Composite, which has rallied in recent weeks.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

Missed out on Apple in 2012? Buying Nvidia stock today could be your second chance

By now, it's clear that artificial intelligence (AI) is the next major technology platform.

Read more »

Robot humanoid using artificial intelligence on a laptop.
International Stock News

3 reasons Amazon stock looks like an incredible bargain right now

Here are three reasons Amazon stock looks like a rare bargain at current levels.

Read more »