Alibaba Shares Surge 9% on Cloud Growth & E-Commerce Boost

Alibaba’s stock surged Thursday following the Chinese behemoth’s dramatic earnings increase for the December quarter, which was supported by continued growth in its e-commerce and Cloud Intelligence divisions.

Alibaba revealed that its net income for the quarter that ended on December 31 was 48.945 billion yuan ($6.72 billion), which was higher than the 14.433 billion yuan reported during the same period last year and the 40.6 billion yuan predicted by LSEG.

Revenue was 280.154 billion yuan, which was less than the 279.34 billion yuan analysts had predicted.

Over the year, the company’s stock has increased by about 50% on the New York and Hong Kong exchanges.

Alibaba CEO Eddie Wu said in a statement released with the results, “This quarter’s results demonstrated substantial progress in our ‘user first, AI-driven’ strategies and the re-accelerated growth of our core businesses.”

With sales from AI-related products reaching triple-digit growth for the sixth consecutive quarter, our cloud revenue growth rekindled to double digits at 13%. Looking ahead, Cloud Intelligence Group’s AI-driven revenue growth will keep picking up speed.

Shortly after the data were released, the company’s U.S.-listed shares were up 9.20% at 7:15 a.m. ET in premarket trading.

Focus on technology

In the three months ending in December, Alibaba’s Cloud Intelligence Group reported a 13% increase in sales year over year to 31.742 billion yuan.

Investors are keeping a close eye on the retail behemoth’s technological endeavors following the news of the Chinese company’s collaboration with Apple to introduce AI capabilities for Chinese-sold iPhones.

Following the groundbreaking late-January release of local startup DeepSeek’s new AI model—which the company claims is more efficient and reasonably priced to build than sector-leading U.S. counterparts—market attention has shifted to Chinese tech advancements. According to Reuters, Alibaba, which initially entered the AI space in 2023 with the introduction of its own ChatGPT-style product Tongyi Qianwen (Qwen), earlier this year released a new Qwen 2.5 version of its technology that it said outperformed the DeepSeek model.

Alibaba’s vocal founder Jack Ma, who has mostly avoided the spotlight since 2020, was one of the businesspeople who attended a rare meeting held behind closed doors on Monday. The Beijing leader encouraged private companies to “show their talents” and boost their confidence in a “new era” for their operations.

Purchases

The International Digital Commerce Group, which manages e-commerce companies like Lazard and AliExpress, saw a 32% year-over-year increase in revenue to 37.756 billion during the period due to the “strong performance of cross-border businesses,” while Alibaba’s main business units, Taobao and Tmall Group, reported an annual 5% increase in revenue to 136.091 billion yuan in the December quarter.

Concerns about consumer sentiment have persisted in the second-biggest economy in the world. According to the most recent data, Chinese retail sales increased by a better-than-expected annual 3.7% in December. Beijing implemented several stimulus measures, including interest rate cuts and a 10 trillion yuan fiscal package, to overcome a prolonged real estate slump. Despite warnings from some analysts about persistent weakness in consumer spending, consumer inflation surged to its highest level in five months in January.

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