Option Witch | Alibaba Rallies as Nvidia H20 Eases Alibaba Cloud Strain, Taobao Flash Sales Pay Off. Two Bullish Trades to Watch

Alibaba’s U.S.-listed stock rose over 6% in premarket trading on Tuesday. The rally is poised to continue as two major growth engines gain momentum. The resumption of Nvidia H20 exports eases AI chip constraints for Alibaba Cloud, reinforcing its leadership in infrastructure. Meanwhile, Taobao’s flash sales strategy and Jack Ma’s push for sustainable growth are driving strong e-commerce performance.

Alibaba Cloud Gets Relief as Nvidia H20 Exports Resume

The resumption of Nvidia H20 chip exports is expected to ease Alibaba Cloud’s AI computing supply constraints. Previously, U.S. export restrictions on the H20 had created bottlenecks in Alibaba Cloud’s AI training and inference operations. While the H20’s performance is slightly below that of the H100, it still offers strong capabilities for vertical model training and inference — well aligned with Alibaba Cloud’s current needs.

Market Share Consolidation: According to IDC’s 2024 report, Alibaba Cloud holds a 23% share of the AI IaaS market — exceeding the combined total of the second and third players. The resumption of H20 chip exports will help Alibaba Cloud further solidify its leading position in AI infrastructure.

Cost Control and Efficiency Gains: The introduction of H20 chips can reduce Alibaba Cloud’s AI computing procurement costs while improving inference efficiency, enhancing its competitiveness in the AI services market.

Jack Ma Requests Taobao Instant Commerce to Stabilize at 80M Orders

Reports emerged that Alibaba founder Jack Ma has intervened in the strategy of Taobao Flash Sales. Ma reportedly directed the division to "anchor at 80 million orders," prioritizing capability upgrades and foundational strengthening over immediate expansion. This move is seen as a prudent step to ensure sustainable growth in the highly competitive e-commerce space. Additionally, Alibaba plans to launch "Super Saturdays" promotional events every Saturday over the next 100 days, potentially boosting sales and market share.

Taobao Flash Sales Boost Night Orders: Since July, the 50 billion yuan in platform consumption vouchers issued by Taobao have driven a more than twofold increase in nighttime orders in cities such as Guangzhou, Shenzhen, and Jinan. Nationwide, over 640,000 stores have seen a monthly growth of over 100% in nighttime orders.

During this period, the volume of nighttime food delivery orders at camping sites on weekends increased by 230%, nighttime orders at scenic parks rose by more than 120%, and leisure venues such as amusement parks and fishing gardens saw a growth of over 110% in nighttime orders. Nighttime orders at hotels and bars also grew by approximately 100%.

Option Strategy

1. Cash-Secured Put (Capital Preservation)

Strategy: Sell Aug 1, 2025 $110 Put

$BABA 20250801 110.0 PUT$

Key Metrics:

• Ideal Scenario: BABA stays above $110 through expiration

• Risk: Below $100.80 = Losses begin (partial hedge from premium)

2. Bull Call Spread (Defined Risk)

Strategy:

• Buy Aug 1, 2025 $115 Call

• Sell Aug 1, 2025 $120 Call

$BABA Vertical 250815 115.0C/120.0C$