By Chinese tech giant Alibaba Group Holding Ltd. reported strong earnings for the December quarter, with profit reaching 48.9 billion yuan ($6.7 billion).
The company credited the performance to its growing international e-commerce business and its continued push into artificial intelligence.
Revenue rose 8% year-over-year to $38.38 billion, exceeding analysts’ expectations of $38.23 billion.
Adjusted earnings per share came in at $2.93, also beating market forecasts of $2.67, according to FactSet.
“This quarter’s results demonstrated substantial progress in our ‘user-first, AI-driven’ strategies and the re-accelerated growth of our core businesses,” said Alibaba CEO Eddie Wu.
Shares of Alibaba were up by about 8% on Thursday morning.
The stock has gained over 45% on both the New York and Hong Kong exchanges since the start of the year.
AI and cloud computing at the center of Alibaba’s strategy
Alibaba’s Cloud Intelligence Group posted a 13% year-over-year increase in revenue, reaching 31.7 billion yuan.
The company highlighted the growing importance of AI in driving cloud revenue, with AI-related product sales achieving triple-digit growth for the sixth consecutive quarter.
“Looking ahead, revenue growth at Cloud Intelligence Group driven by AI will continue to accelerate,” Wu said.
Alibaba’s AI initiatives have attracted renewed attention, particularly after its recent partnership with Apple to introduce AI-powered features for iPhones sold in China.
The announcement comes as Chinese tech firms ramp up efforts to compete with leading US AI developers.
In January, local startup DeepSeek launched a new AI model that it claims is more efficient and cost-effective than American competitors.
Alibaba responded by rolling out an upgraded version of its own AI model, Qwen 2.5, which the company says outperforms DeepSeek’s technology.
Jack Ma reappears as Beijing urges private sector growth
Alibaba’s founder, Jack Ma, made a rare public appearance earlier this week at a closed-door meeting with Chinese President Xi Jinping.
The gathering, attended by several top business leaders, saw Xi urging private enterprises to “show their talents” and strengthen their confidence in China’s “new era” of economic activity.
Ma, once a vocal critic of Chinese regulators, has remained largely out of the public eye since 2020, following Beijing’s crackdown on the country’s tech sector.
His participation in the meeting signals a possible shift in relations between the Chinese government and its private business sector.
Retail sales and consumer sentiment remain key concerns
Alibaba’s core e-commerce platforms, Taobao and Tmall Group, reported a 5% annual rise in revenue, totaling 136.1 billion yuan.
While the increase suggests resilience in consumer spending, questions remain over China’s broader economic recovery.
December retail sales in China rose 3.7% year-over-year, surpassing expectations as Beijing introduced measures to combat the country’s prolonged real estate downturn.
Authorities have rolled out interest rate cuts and a five-year, 10-trillion-yuan fiscal package aimed at stimulating growth.
Despite these efforts, analysts caution that consumer sentiment remains fragile, with inflation accelerating to its fastest pace in five months in January.
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