THE GIST Alibaba is making a calculated bet that spending heavily now on AI infrastructure and quick commerce will pay off later.
In the meantime, the profit line looks alarming, and the market isn’t sure what to make of it
WHAT HAPPENED Alibaba reported fiscal fourth-quarter results on Wednesday that presented two very different companies depending on which line you looked at. Revenue came in at 243.4 billion yuan (about $36 billion), up 3% year on year, though that missed analyst estimates of 247.1 billion yuan. Stripping out divested businesses, revenue grew 11%.
The cloud and AI business was genuinely impressive. Cloud Intelligence Group revenue rose 38% to 41.6 billion yuan, with AI-related product revenue reaching 9 billion yuan, extending a streak of triple-digit year-on-year growth to eleven consecutive quarters. AI now represents around 30% of the cloud division’s external revenue.