Alibaba reports revenue growth as AI and cloud services strengthen performance
Alibaba Group Holding posted stronger than expected results for the September quarter, supported by rising demand for its cloud computing and artificial intelligence services. The company reported on Tuesday that revenue for the financial second quarter reached 247.8 billion yuan, equal to about US$34.8 billion, marking a 5 per cent rise from a year earlier. The figures surpassed the market expectation of 245.2 billion yuan based on estimates compiled by Bloomberg, and showed an improvement from the 2 per cent growth recorded in the previous quarter.
The company said the momentum in its AI related business lines played an important role in the latest results. Alibaba has been directing more resources toward developing and expanding its cloud infrastructure to support next generation computing needs. This includes providing AI model training, enterprise cloud solutions and data services to a wide range of clients across China and overseas. CEO Eddie Wu Yongming noted that Alibaba is now entering what he described as an investment phase aimed at strengthening long term strategic capabilities in artificial intelligence technologies and the infrastructure required to power them. He said this approach is designed to position the company for the next wave of digital transformation across industries.
While revenue growth outperformed analyst expectations, the company’s profitability saw a noticeable decline. Net income attributable to ordinary shareholders dropped to 21 billion yuan, compared with 43.9 billion yuan in the same quarter last year. Alibaba attributed the decrease primarily to lower income from operations as the company continued to invest in high priority development areas. Even so, the reported net income was still higher than the 9.2 billion yuan projected by analysts, indicating that the company’s financial performance remained more resilient than expected despite the additional spending.
Analysts say the results show the company is steadily recovering after several challenging quarters marked by shifting economic conditions and evolving market competition. The enhanced focus on cloud and AI technologies reflects a broader trend in the Chinese digital economy, where major firms are competing to build advanced computing platforms capable of supporting large scale artificial intelligence applications. Alibaba’s cloud division is central to this strategy, serving both commercial clients and government related digital infrastructure projects.
The company said it will continue to expand its cloud capabilities while exploring further opportunities to apply AI solutions across sectors including retail, logistics and enterprise software. As the global market places greater emphasis on automation and intelligent computing, Alibaba aims to solidify its position as one of the leading providers of digital infrastructure in Asia. The latest quarter’s performance suggests that the company’s long term focus on advanced technology development is beginning to provide measurable returns even as short term profit margins fluctuate.
