Alibaba-Apple AI Partnership Lifts China Internet Stocks and KWEB ETF

Alibaba is helping drive a broad rebound in Chinese internet stocks.

Alibaba shares rallied after Apple selected its Qwen AI model for Apple Intelligence features in China. [Photo by Niu Jing/For China Daily]

The KraneShares CSI China Internet ETF (KWEB) has gained nearly 13% in July, making it one of the top-performing thematic exchange-traded funds (ETFs), even as the Nasdaq Composite has fallen about 2%, Jared Blikre reported for Yahoo Finance.

Alibaba has led the rally, with its shares rising nearly 27% this month.

The latest catalyst came after Chinese regulators approved Apple Intelligence for use on iPhones in China, clearing a major regulatory hurdle for its long-delayed rollout.

Alibaba said its Qwen artificial intelligence model will be integrated into Apple's iPhone, iPad, Mac, and Vision Pro platforms in China.

Apple is also working with Baidu on AI features for Chinese users, although regulators have not announced a launch date.

The approval gives Apple an opportunity to narrow a significant competitive gap in China, where advanced AI capabilities have become a key differentiator among smartphone manufacturers.

For Alibaba, the partnership places its Qwen AI model within one of the world's largest consumer device ecosystems.

Apple has been one of the Dow Jones Industrial Average's strongest performers in July, gaining more than 12% during the month.

KWEB has matched Apple's performance and outpaced every member of the Magnificent Seven except Meta. During the same period, Microsoft has risen about 8%, Amazon approximately 5%, and Nvidia just over 2%.

Alibaba is not the only Chinese technology company participating in the rally. JD.com has gained about 20% in July, KE Holdings around 18%, and PDD Holdings approximately 13%.