Alibaba Group (NYSE: BABA) is making a spectacular comeback, with shares soaring more than 11% in premarket trading on Thursday after the Chinese e-commerce titan reported stellar earnings for the December quarter. The company beat Wall Street expectations, fueled by a resurgence in cloud services and international sales, signaling a new era of growth after years of regulatory uncertainty.
Alibaba’s Blowout Earnings: Strongest Revenue Growth in Over a Year
Alibaba posted net income of 48.95 billion yuan ($6.72 billion), significantly surpassing analyst forecasts of 40.6 billion yuan. Revenue climbed 8% year-over-year to 280.15 billion yuan ($38.6 billion), marking its fastest growth pace in more than a year. The robust results underscore Alibaba’s successful shift toward AI-driven services and international commerce expansion.
Cloud and AI Power Alibaba’s Resurgence
A key highlight of Alibaba’s earnings report was the impressive performance of its Cloud Intelligence Group, which delivered 13% revenue growth to 31.74 billion yuan ($4.3 billion). This marks the segment’s best performance in nearly two years, fueled by soaring demand for AI-powered cloud services.
Alibaba’s AI-driven cloud expansion is paying off handsomely, with AI-related product revenue achieving triple-digit growth for the sixth consecutive quarter. CEO Eddie Wu emphasized the company’s aggressive investment in AI infrastructure, stating, “The AI era presents a clear and massive demand for infrastructure. We will aggressively invest in AI infrastructure.” Alibaba plans to spend more on AI and cloud infrastructure over the next three years than it has in the past decade.
International Commerce Sales Surge 32%
Alibaba’s global footprint is expanding rapidly, with international commerce revenue skyrocketing 32% year-over-year. This surge was driven by strong performances from AliExpress, Trendyol, and Lazada, indicating robust demand for Alibaba’s platforms beyond China.
The company’s core domestic e-commerce business, Taobao and Tmall Group, also recorded a steady 5% revenue growth to 136.09 billion yuan. While Chinese consumer spending remains under pressure, Alibaba’s diversified global strategy is positioning it as a dominant force in global e-commerce.
Alibaba’s Stock Soars Amid Beijing’s $10 Trillion Stimulus
Investor confidence in Alibaba has been further bolstered by Beijing’s $10 trillion yuan stimulus package aimed at revitalizing China’s economy. With Alibaba’s stock already up nearly 50% this year in both New York and Hong Kong, the company is riding a wave of renewed optimism in the Chinese tech sector.
Additionally, regulatory relief appears to be on the horizon. Co-founder Jack Ma recently attended a high-profile meeting led by President Xi Jinping, a signal that Beijing may be easing its scrutiny on tech giants after years of crackdowns. This renewed government support could pave the way for Alibaba’s continued growth and expansion.
Alibaba’s AI Partnership with Apple Boosts Growth Prospects
Alibaba’s AI ambitions took another major step forward with its partnership with Apple Inc. to integrate AI features into iPhones sold in China. The company’s Qwen AI model, first introduced in 2023, has been evolving rapidly, with its latest iteration, Qwen 2.5, reportedly outperforming local competitors.
As Alibaba cements its leadership in AI and cloud computing, investors are increasingly optimistic about the company’s long-term growth trajectory. With strategic investments, regulatory tailwinds, and international expansion, Alibaba is well-positioned to dominate the next wave of AI-powered commerce and cloud services.
