Alibaba reported a 2% rise in quarterly revenue to 247.65 billion yuan ($34.6 billion) for the quarter ended June 30, missing analyst forecasts of 252.92 billion yuan. Operating profit fell 3% to 35 billion yuan. New York-listed shares closed 12.9% higher while Hong Kong-listed stock gained as much as 18% after strong AI and cloud performance. AI-related product revenue rose by triple digits and Alibaba Cloud revenue grew 26% year-over-year to 33.4 billion yuan, outperforming expectations. The company continues to incur heavy costs in a fierce, cash-burning food delivery battle with Meituan and JD.com that pressures margins.
"Our investments in AI have begun to yield tangible results," said Alibaba Group CEO Eddie Wu on Friday's earnings call.
"We're seeing an increasingly clear path for AI to drive Alibaba's robust growth," Wu said.
"For Cloud, it maintains accelerating growth on rising AI adoption with enhanced modeling capabilities and strong inference/training demands," wrote equity analysts at Jefferies on Friday.
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