Alibaba, Kuaishou, SMIC slide in Hong Kong tech sell-off

Hong Kong stocks declined on February 5 amid a sell-off in the tech sector, driven by concerns over valuations and the potential impact of AI on traditional business models.

The Hang Seng Index dropped 0.8 percent to 26,628, while the Hang Seng Tech Index fell 1.8 percent.

Major tech stocks such as Alibaba and Kuaishou declined by 2.5 percent and 2.3 percent, respectively.

Semiconductor Manufacturing International and Meituan also reported decreases of 2.3 percent and 2.1 percent.

In contrast, Baidu rose 2.3 percent after announcing a US$5 billion share buy-back plan and a new dividend policy.

On Wall Street, the Nasdaq fell 1.5 percent, with Alphabet dropping 2.2 percent and Applovin losing 16 percent.

The market sentiment was described by analysts as a reaction to fears surrounding AI’s influence on the future of business models.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

The tech sell-off tracks a costly battle for AI supremacy

Investors worry that big AI budgets at large tech firms can squeeze profits.
Alibaba’s Qwen app set aside RMB 3 billion for the “Spring Festival Treat Plan.” It starts February 6. It links with Taobao Flash Purchase; Fliggy; Damai; Hema; Tmall Supermarket; Alipay; plus other Alibaba ecosystem businesses 1.
In the prior quarter, Alibaba’s net income fell 53% year over year to 20.6 billion yuan. The company blamed a “decrease in income from operations” amid AI and commerce spending. Sales and marketing costs more than doubled 2.
Tencent funded a Spring Festival cash red packet push for its Yuanbao AI app worth about RMB 1 billion 1.

A retail investor surge is remaking China’s tech market

Mainland retail traders have poured into China’s stock market even after sharp down days.
In January 2026, new individual investor accounts in China for A-shares (mainland-listed stocks) hit 4.9158 million. That was up 213% year over year and the highest since October 2024 as money moved into AI and tech shares 3.
Flows still split by name. On one recent day, southbound capital net sold HKD 328 million in Alibaba-W. The same channel logged a net inflow of HKD 1.304 billion into Tencent 1.
That mix fits a shift within tech as investors pick different AI winners.