Written by The Banking Post
China’s Alibaba (9988.HK) reported strong quarterly growth in its cloud computing business even as overall revenue fell short of expectations, highlighting artificial intelligence as a key growth driver.
Cloud segment revenue surged 26% to 33.4 billion yuan ($4.67 billion), beating the expected 18.4% rise. However, slower growth in e-commerce left total quarterly revenue at 247.65 billion yuan, below the 252.92 billion yuan estimate.
Alibaba has aggressively invested in AI, spending over 100 billion yuan on infrastructure and product development over the past year. Group CEO Eddie Wu said the company is now seeing tangible results from these investments.
The newly reported China E-commerce Group, including Taobao, Tmall, Ele.me, Fliggy, and the instant commerce business, posted 10% growth, while income from operations declined 3%, and adjusted earnings fell 14% due to expansion costs.
International commerce revenue rose 19%, led by growth in Europe and the Middle East. Alibaba also repurchased shares in its logistics unit Cainiao from Fosun International for $349.8 million.
Analysts note that the company’s pivot toward quick commerce and AI is reshaping operations but pressuring short-term profitability amid intense competition from rivals like PDD Holdings and Meituan.
