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Alibaba Group Holding Ltd. and Nio Inc. shares sank in premarket trading on Thursday, after the Chinese e-commerce giant reported a 63% drop in quarterly profit and the electric-car maker announced a recall of its vehicles.
Alibaba said its net income fell to $2.81 billion in the three months ended Dec. 31, from $7.67 billion a year earlier. The company’s revenue rose 32% to $56.15 billion.
Alibaba’s core e-commerce business continued to power its growth, with revenue from that segment rising 37% to $52.14 billion. But the company’s other businesses, including its cloud-computing and digital-media divisions, struggled.
Nio, meanwhile, said it was recalling nearly 5,000 of its electric vehicles in China over a battery defect. The company said it had received four reports of battery fires, but no injuries or fatalities had been reported.
Nio’s shares were down 9.4% in premarket trading, while Alibaba’s stock was off 5.7%.Alibaba and Nio shares sink
Chinese e-commerce giant Alibaba Group Holding Ltd. and electric vehicle maker Nio Inc. were among the biggest decliners in U.S. trading on Monday, as a sell-off in technology shares continued.
Alibaba shares fell 6.4% to $186.45, while Nio shares tumbled 15.2% to $16.01. The Nasdaq Composite Index was down 2.3% in midday trading.
The declines come as a rotation out of high-flying growth stocks and into value stocks continues. The rotation was sparked last week by comments from Federal Reserve Chair Jerome Powell that signaled the central bank is not in a hurry to raise interest rates.
Value stocks, which are typically more sensitive to changes in interest rates, have outperformed growth stocks since Powell’s comments. The Russell 1000 Value Index is up 2.6% since Thursday, while the Russell 1000 Growth Index is down 2.1%.
Alibaba and Nio are both growth stocks that have seen their shares surge this year. Alibaba is up 85% so far in 2020, while Nio is up more than 400%.
The sell-off in technology stocks is likely to continue in the near term as the rotation out of growth stocks continues. However, longer-term investors may see this as a buying opportunity in two of the hottest stocks in the market.Alibaba and Nio shares sink
Alibaba Group Holding Ltd. and Nio Inc. were among the worst performers in the U.S. stock market on Thursday, as a rout in Chinese tech stocks spread to Wall Street.
Alibaba shares fell 7.6% to $186.85, while Nio shares tumbled 8.7% to $32.15. The declines came after the Chinese government announced new restrictions on the country’s tech sector, including a crackdown on the practice of using user data to offer targeted advertising.
The new rules could hit Alibaba’s core e-commerce business, as well as its newer businesses in areas such as cloud computing and artificial intelligence. Nio, which makes electric cars, could also be affected by the restrictions, as the Chinese government has been encouraging the adoption of electric vehicles.
Other Chinese tech stocks also fell sharply on Thursday. Baidu Inc. shares fell 6.5% to $142.01, while JD.com Inc. shares tumbled 7.2% to $33.35.
The sell-off in Chinese tech stocks came as the overall U.S. stock market was under pressure, with the Dow Jones Industrial Average falling more than 200 points.Alibaba and Nio shares sink
Alibaba Group Holding Ltd and Nio Inc saw their shares sink on Friday after the Chinese e-commerce giant reported a 63 percent drop in quarterly profit, while the electric carmaker posted a wider-than-expected loss.
Alibaba, China’s biggest company by market value, said its core commerce business was hit by a rise in marketing costs and a drop in consumer spending due to the coronavirus pandemic.
The Hangzhou-based firm’s shares fell as much as 9.4 percent in morning trade, taking their losses this year to around 30 percent.
Nio, which went public in 2018, reported a net loss of $340.8 million for the first quarter, compared with a loss of $176.9 million a year earlier.
The Shanghai-based company’s shares tumbled as much as 18.5 percent, taking their losses this year to around 60 percent.
Alibaba’s results were a stark reminder of the pandemic’s toll on businesses across the globe, with the company saying it expects the virus to have a “significant, negative impact” on its business in the current quarter.
Nio, meanwhile, said it was suspending production at its plant in Hefei, China, for two weeks due to the outbreak.
