From May 29th to June 4th, international oil prices fell rapidly, with five consecutive bearish candlesticks and a cumulative drop of nearly 10%, reaching a low of $72.48, just one step away from the psychological level of $70. There are two main reasons for the decline in international oil prices. One is that OPEC's production cut was less than expected. After the 37th ministerial meeting of OPEC on Sunday last week, it was announced that the voluntary production cut measures (about 2 million barrels per day, originally scheduled to expire at the end of June) would be extended to the end of 2024; collective production reduction measures (about 39 million barrels per day) would be extended until 2025. Although production cuts have been extended, there is no new production reduction plan as expected by the market. Under the disappointment of the expectation, international oil prices were negatively affected. The other reason is that the interest rate cuts of Europe and America are coming, meaning that there is downward pressure on the economy. Yesterday, the Bank of Canada announced its rate decision, cutting interest rates by 25 basis points and lowering the benchmark interest rate to 4.75%. Canada's latest core CPI annual rate is 1.6%, already lower than the moderate inflation standard of 2%, and the potential risk of recession has increased. The European Central Bank's interest rate decision today also has the possibility of interest rate cuts. Market participants expect the Fed to cut interest rates for the first time before the end of the year. Once the inflation rate of European and American countries falls more than expected, the demand for crude oil will significantly decrease. Coupled with OPEC's insufficient production reduction plan, the decline in international oil prices is logical.

This week, the stock market experienced a surge, with technology stocks particularly shining in the Hong Kong stock market. Alibaba (09988) rose by over 13% this week. According to news from earlier this week, Alibaba Cloud announced at its annual flagship event, the Yunqi Conference, that its self-developed TongYi large model AI platform 'Bailian' served over 0.3 million customers, a significant increase from the 0.09 million customers in May this year. Through TongYi large models and its scalable global cloud infrastructure, Alibaba Cloud provides better customer experience and mature innovative solutions for customers in the automotive, gaming, travel, and information technology industries.

Alibaba's cloud computing department is collaborating with semiconductor giant Nvidia to develop an artificial intelligence program aimed at enhancing autonomous driving technology for electric car manufacturers such as Li Auto Inc and Xiaomi in China. This collaboration marks deep cooperation between Alibaba Cloud and the leading US chip manufacturer, driving technological progress in the Chinese electric vehicle industry.

It is reported that Alibaba Cloud's self-developed large language model Qwen - including the Qwen2-7B language model and the Qwen2-VL visual language model - has achieved deep integration with the NVIDIA DRIVE AGX Orin autonomous driving platform. Nvidia's model acceleration technology has significantly reduced computing costs and minimized delays in real-time processing of complex tasks by Alibaba Cloud's artificial intelligence models, ensuring a smooth and uninterrupted intelligent experience for drivers and passengers.

In addition, Xpeng Motors is using Alibaba Cloud's AI models and powerful cloud computing capabilities to redefine its smart cabin and autonomous driving experience. Xpeng Motors uses Alibaba Cloud's Tongyi Qianwen to enhance its AI voice assistant Xiao P's functionality, achieving a more outstanding smart cabin experience. This LLM-driven voice assistant does not require specific commands and can excellently understand complex conversational contexts and user intents, engaging in natural conversations with drivers and passengers. For example, if a user says 'It's cold in the car,' the voice assistant will automatically adjust the interior temperature.

Developing automotive large model solutions signifies the accelerated implementation of Alibaba Cloud's AI large models, expanding to a wide range of scenarios, with more scenarios expected to be restructured and created. Alibaba Cloud CEO Wu Yongming stated that in the new computing power market, over 50% of new demand is AI-driven, with AI computing power demand taking the lead and this trend expected to continue to expand.

Alibaba's stock price has risen by over 29% so far this year, partly due to accelerated growth in its AI business. The latest financial report shows a positive growth momentum in cloud computing business revenue, with the market still not fully reflecting the value growth potential brought by the cloud business. The performance of the core business is expected to further drive the valuation. The stock price has already reached a high since July 2023, and if it effectively breaks through 100 Hong Kong dollars, the target will be the high in January 2023. However, more bullish news is needed for further momentum, and in the short term, it is advisable to watch whether the momentum will slow down around 100 Hong Kong dollars after the sharp rise this week.