Alibaba’s cloud division growth accelerated in the June quarter, offsetting a 75% net income decline due to higher infrastructure spending.
Alibaba reported a 45% year-on-year increase in cloud revenue for the June quarter, driven by rising demand for its artificial intelligence products. The growth in its core cloud segment contrasted with a sharp 75% drop in net income to 10.4 billion Chinese yuan, as increased spending on cloud infrastructure weighed on profitability.
The company’s cloud revenue growth outpaced the prior quarter’s performance, reflecting stronger enterprise adoption of AI-driven solutions. Analysts had anticipated a slowdown amid broader economic challenges, but the division’s expansion signaled resilience in demand for digital services.
U.S.-listed shares of Alibaba fell 4% in premarket trading following the earnings release, as investors weighed the profit decline against the cloud division’s robust growth.