- A number of major Chinese companies are in the green today
- Strong recent earnings and easing lockdown measures seem to be behind the jump
- Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU) are each up more than 12%
Chinese stocks are the talk of Wall Street today as companies like Alibaba and JD.com (NASDAQ:JD) eye sizable gains. Specifically, both a string of strong earnings reports and easing lockdown measures seem to have investors hopeful.
Today, Alibaba reported its financial results for its fiscal fourth quarter ended March 31. The e-commerce giant reported adjusted earnings per share (EPS) of $1.55 with $32.2 billion in revenue. This handily beat analyst expected EPS of $1.07 on $29.9 billion in revenue. Alibaba also recently announced upping the scale of its buyback program, from $15 billion to $25 billion.
Many analysts read this announcement as a strong sign that Alibaba may be undervalued. Right now, BABA trades close to its 52-week low. It is up today, however, currently trending in the green about 14% as the S&P 500 and Nasdaq Composite each enjoy strong trading days.
Chinese Stocks Soar as Covid-19 Fears Ease
Chinese search engine Baidu also recently reported its Q1 financial results, beating expectations. The tech-forward company saw revenue of $4.48 billion, a slight increase over last year’s $4.2 billion figure. Revenue from the company’s artificial intelligence (AI) cloud computing platform, Baidu AI Cloud, grew a promising 45% during the period as well. Of course, it wasn’t all positive; the company did have an EPS loss. Still, BIDU stock is up nearly 13% at the time of writing.
Finally, internet video game company iQIYI (NASDAQ:IQ) also reported its Q1 earnings this morning. After years of annual losses, the company stunned investors by reporting net income of $26.7 million. This is a far cry from its more than $190 million loss during the same period last year. The numbers weren’t otherwise amazing, logging declining revenue and subscribers. However, investors could seemingly care less. IQ stock is up about 8% so far today.
China has been in a state of financial turmoil this year, with the omicron Covid-19 variant resulting in a near total shutdown of the country. Now, though, some hope has emerged as lockdown policies reverse amid waning case numbers. Today’s strong earnings should further convince investors that the storm is almost over.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.