This article first appeared on GuruFocus.
Alibaba (NYSE:BABA) dipped 3% on Friday, despite reports that Beijing is set to approve the commercial import of Nvidia’s H200 AI chips as early as this quarter.
The news initially sparked optimism in the Chinese tech sector, with peers Kuaishou Technology (KUASF) and JD.com (NASDAQ:JD) climbing more than 4%.
The dip in Alibaba shares reflects lingering investor concerns over regulatory scrutiny in China. Analysts note that ongoing government oversight continues to create uncertainty for major tech players, which can limit stock gains even amid positive developments.
Additionally, Alibaba’s core business is under pressure. Soft e-commerce earnings and slower revenue growth have weighed on the stock since October, overshadowing potential benefits from securing an AI chip supply. Market participants also appear to have priced in the Nvidia news, prompting profit-taking after the announcement.
People are a little reserved about cost and time issues. The H2O0 chips are already subjected to 25% of the U.S. value-added tax, and it will take some time to integrate the chips into the large-scale language-model system of Alibaba, which is why investors are not rushing to drive the stock back up at once.