Scenes from the Taobao Outdoor Life Festival held in Yangshuo, China (Getty Images)

China’s retail investors can finally trade Alibaba shares 10 years after it went public — thanks to a US law

9/12/24 2:26PM

Imagine if American retail investors couldn’t trade Amazon. For years, that’s what it was like for China’s legions of mom and pop investors when it comes to Alibaba, the country’s biggest online retailer.

But this week, Alibaba finally joined Mainland China’s Southbound Stock Connect program after it obtained a primary listing on the Hong Kong Stock Exchange (HKEX). The program allows mainland China investors to access eligible Hong Kong shares.

In some ways, the decision to file for a HKEX listing was fueled by a 2020 US law. Alibaba first went public on the New York Stock Exchange in 2014. Then in 2020, Congress passed the Holding Foreign Companies Accountable Act, which said that foreign companies publicly listed in the US will be banned if they couldn’t comply with Public Company Accounting Oversight Board audits.

It also targeted specifically at China and, among other things, asked Chinese companies to disclose their connections to the Chinese Communist Party. Five state-owned Chinese companies, including China’s leading energy and insurance company, voluntarily delisted themselves from the NYSE. Other companies, including Alibaba, Netease, Baidu and Bilibili, chose to file for a secondary listing in Hong Kong as a backup option for their investors if they were forced to delist from the NYSE.

In late 2022, the SEC said that it was able to audit Chinese companies listed in the US, so the risk of delisting was gone. But Alibaba still proceeded to pursue a primary listing in HKEX, which finally went through last month, five years after getting its secondary listing.

Shares were up 4.2% in Hong Kong on Sept. 10, the first day of trading with the Stock Connect in effect. Investors bought over $8.5 billion HKD of Alibaba’s stock that day via the program, with purchases from Shenzhen and Shanghai accounted for about half of the day’s turnover.

As a result of the Chinese government’s regulatory crackdown on leading big tech companies beginning in late 2020, Alibaba’s shares have fallen more than 70% from their October 2020 peak.

“The added access and additional liquidity from Mainland retail is actually quite significant,” said Kevin Xu, the founder of Interconnected Capital, a hedge fund that invests in A.I. ventures. “But that doesn’t change the fact that the economy is still very challenged.”

There may be “a bit of an unfortunate timing”, he added, as the first day that the Stock Exchange program became official coincided with the release of a Chinese CPI report that showed that deflationary forces continue to dominate.

Matt Phillips52m

Diverse partnership’s $40 billion data center may the future of funding for AI

Another day, another multibillion-dollar data center deal.

The announced $40 billion buyout — including debt — of Texas-based Aligned Data Centers on Wednesday was the first for a consortium established last year by a diverse base of investors including giant money management firm BlackRock, Abu Dhabi-based technology investment fund MGX, and Microsoft.

Some analysts suggest the variety of investors in such a deal — including tech giants, sovereign investment funds and the private pools of capital controlled by entities like BlackRock — will be an increasingly common site, as the enormously expensive buildout of AI infrastructure continues over the coming years.

Analysts at Morgan Stanley recently estimated that there will be some $2.9 trillion of spending on data centers globally by 2028. Some $1.4 trillion of that will be covered by the cash flows produced by giant hyper scalers like Microsoft, leaving a need for some $1.5 trillion from other sources. The analysts wrote that their “broad takeaway was bullishness on the availability of those sources of capital.”

Nvidia, Microsoft, xAI and BlackRock part of $40 billion deal for Aligned Data Centers

Luke Kawa2h

Rigetti Computing tanks amid souring retail sentiment, bearish options bets

Rigetti Computing is getting taken to the woodshed on Wednesday amid souring retail trader sentiment and options bets on near-term downside.

In particular, one post on Reddit’s wallstreetbets forum from user bespoketrancheop, which shows the Google Street view (circa March 2025) of Rigetti’s listed headquarters, is generating a lot of attention. It’s the most popular Rigetti-centric post on the subreddit in the past seven months.

Rigetti HQ — r/wallstreetbets via bespoketrancheop

Per our executive editor, it’s giving this:

But as one commenter notes, this isn’t exactly new news: “People been posting this since it was $11,” with another pointing out that “making an assessment on a google street view is lazy dd [editor’s note: due diligence].”

For what it’s worth, Rigetti’s Quantum Fab manufacturing facility in Fremont looks a lot more like a place where next-gen technology is being developed and a lot less like the middle school one of my colleagues went to.

Of course, it’s impossible to single this out as <the> specific catalyst for the price action in Rigetti today. But since there’ve been dozens of days in the past couple months where quantum computing stocks went up on no news whatsoever, it stands to reason there are also going to be days when they go down for no (good) reason whatsoever.

More important, perhaps, is the flurry of major options bets positioning for downside in the quantum computing company this week. Put options with a strike price of $50 that expire this Friday are in demand. That contract had open interest of under 7,000 heading into today but has already seen volumes of more than 30,000, suggesting fresh wagers made on a pullback in the formerly high-flying stock.

Luke Kawa3h

AMD soars as HSBC hikes price target to a Street high of $310

Shares of Advanced Micro Devices are soaring after HSBC analyst Frank Lee strapped his price target for the chip designer to a rocket ship, hiking it to $310 from $185. The new price target ties that of Arete Research’s Brett Simpson for the highest on Wall Street, per data from Bloomberg.

The recently announced deal with OpenAI, which was followed by news that AMD will deploy 50,000 AI chips in Oracle’s data centers, catalyzed a massive wave of Wall Street love for AMD.

But that’s just nowhere near enough compared to what the stock deserves, per Lee, who sees AMD’s MI450 series of AI chips as being sufficiently competitive to Nvidia’s offerings. Through 2030, he sees the revenue opportunity of the OpenAI deal to be $80 billion.

“We believe the Street has underestimated the AI GPU revenue with our estimates 50% and 45% above consensus for 2026e and 2027e, respectively,” he wrote. “We believe there could be further upside driven by pricing premium as well as additional AI GPU volume.”

Morgan Stanley accounting analyst on what needs to be disclosed on AI circularity

Analyst: A lot more disclosure needed on these “circular” AI deals

The “circularity” issue keeps swirling.

Matt Phillips3h

Matt Phillips4h

Bloom Energy, Rocket Lab, and Oklo all notch records as momentum stocks romp

Momentum stocks rallied on Wednesday, with fuel-cell-based power provider Bloom Energy and other stocks popular among retail traders notching record highs.

The iShares MSCI USA Momentum Factor ETF was handily outperforming plain vanilla indexes in early trading. And Goldman Sachs’ basket of High Beta Momentum Shares, which includes Bloom Energy, was up nearly 4% shortly before 11 a.m. ET.

Other momentum favorites romped in early trading: space launch and aspiring satellite services company Rocket Lab touched a record high, along with Oklo, an AI-aligned aspirational provider of fission nuclear reactors. (Oklo is not only losing money, but it isn’t expected to report any sales until 2028, according to FactSet.)

Bloom, for one, is up more than 1,000% over the past 12 months. Chatter on the stock has picked up recently on r/WallStreetBets, as has call options activity.

Wall Street analysts covering the shares are along for the ride. UBS raised its price target to $115 from $110 and kept a “buy” rating on the stock on Tuesday. BMO raised its target to $97 from $33, while keeping its rating at “market perform” (basically a “hold”).

The company reports earnings on October 28 after the bell.