Alibaba’s Stock Drops Amid US Concerns

Alibaba’s shares listed in Hong Kong fell about 5% during Monday’s early trading, hitting the Hang Seng China Enterprises Index hard after US officials raised alarms about a partnership with Apple.

The White House has expressed concerns that this deal might enhance China’s AI capabilities, subject Apple to stricter data regulations in China, and create potential national security threats.

This setback comes alongside Alibaba’s mixed results for Q4 2025. The company’s revenue reached RMB2364.4 billion (approximately $32.6 billion), which was below the expected RMB237.9 billion. Additionally, earnings per depository receipt were $1.73 less than anticipated. Following the revenue announcement, investors responded by pushing the stock down more than 8%.

Analysts caution that increased regulatory scrutiny might hinder Alibaba’s growth in cloud services and AI. Katherine Lim from Bloomberg Intelligence notes that pushback from the US could significantly limit the company’s cloud revenue prospects.

Apple, which is China’s second-largest smartphone vendor, may also be affected if their partnership with Alibaba falters. Sales in the region dipped by 2.3% in the last quarter due to fierce competition from Huawei and Xiaomi. Vey-Sern Ling from Union Bancaire Privee points out that for Apple to remain competitive in China’s fast-changing market, they will need local AI partners.