Alibaba (BABA) Soars 8% on US Chip Exports Ease to China

We recently published Lackluster Tuesday? Not for These 10 Stocks on Sky High. Alibaba Group Holding Limited (NYSE:BABA) is one of Tuesday's top performers.

Alibaba grew its share prices for a fourth straight day on Tuesday, jumping 8.09 percent to close at $116.97 apiece, as investor sentiment was buoyed by the improving relations between China and the US amid the latter’s recent move to ease up on chip exports.

Alibaba Group Holding Limited (NYSE:BABA) traded higher alongside its Chinese counterparts after the US gave the green light for Nvidia Corp. to resume selling H20 AI chips to China.

Alibaba Group Holding Limited (NYSE:BABA)—a China-based technology company specializing in e-commerce—stands to benefit from the move, particularly through its cloud computing subsidiary Alibaba Cloud—one of the several Chinese firms that heavily relied on H20 chips.

More broadly, the US’ move signaled easing trade tensions between the two countries and sparked more confidence for Chinese firms pursuing technology investments and infrastructure expansion.

While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.