Alibaba Group stock surged nearly 7% in Wednesday trading after investors looked past weaker-than-expected earnings and instead focused on the company’s accelerating AI and cloud computing growth.
The Chinese technology giant reported fiscal fourth-quarter revenue of $35.3 billion, up 3% year-over-year but slightly below Wall Street estimates of $35.8 billion. Adjusted earnings per share came in sharply lower at $0.09, missing analyst expectations as heavy spending on artificial intelligence infrastructure and quick-commerce expansion weighed on margins.
Despite the earnings miss, investors appeared encouraged by the strength of Alibaba’s cloud division, which has become a central pillar of the company’s AI strategy.
Alibaba Earnings Breakdown
While the top-line cloud figures were stellar, the broader financial picture showed the cost of this rapid expansion:
- Total quarterly revenue hit $35.3 billion, up 3% but slightly missing consensus estimates.
- Adjusted Earnings Per Share fell to $0.09, a sharp decline from the expected $0.83, as capital was diverted into AI development and quick-commerce operations.
- Despite the overall profit dip, the quick commerce segment saw revenue jump 57% to $2.9 billion, while narrowing its EBITA loss to just negative $20 million from over half a billion a year ago.
Alibaba Cloud Revenue Jumps 38% on AI Demand
Alibaba’s Cloud Intelligence Group generated $6.04 billion in quarterly revenue, marking a 38% increase from a year earlier. External customer revenue accelerated by 40%, driven largely by demand for AI-related cloud services.
The company said AI cloud products now account for roughly 30% of external cloud revenue and have posted triple-digit annual growth for 11 consecutive quarters. AI-related revenue reached approximately $1.3 billion during the quarter.
Cloud profitability also improved significantly. Adjusted EBITA for the cloud segment rose 57% to $550 million, signaling stronger operating leverage even as Alibaba continues investing aggressively in AI infrastructure.
The results reinforced investor optimism that Alibaba is positioning itself as one of China’s leading AI and cloud computing players amid intensifying competition across the sector.
Quick-Commerce Losses Narrow as Growth Accelerates
Alibaba also continued expanding its quick-commerce business, another major investment area for the company.
Revenue from the segment climbed 57% year-over-year to $2.9 billion, while adjusted EBITA losses narrowed sharply to just $20 million compared to a loss of $518 million a year ago.
Meanwhile, Alibaba’s core China e-commerce business generated $17.72 billion in revenue, up 6%, while international digital commerce revenue rose 6% to $5.14 billion.
The company’s premium 88VIP membership program also continued growing, surpassing 62 million members after posting double-digit annual growth.
Alibaba Strengthens Investor Confidence With Cash Position and Dividend
Alibaba ended the quarter with approximately $75.5 billion in cash and liquid investments, giving the company significant flexibility to continue funding AI expansion and shareholder returns.
The company also announced an annual dividend of $1.05 per ADS, representing a total payout of around $2.5 billion.
Wednesday’s rally places BABA among the top-performing large-cap technology stocks of the session as investors continue rotating into AI-linked companies despite broader market volatility.
Alibaba stock rose after investors focused on strong AI cloud revenue growth despite weaker quarterly earnings.
Alibaba Cloud revenue increased 38% year-over-year, driven by strong demand for AI-related services.
Yes. Alibaba reported quarterly revenue and earnings below analyst estimates as AI investments pressured margins.
