Alibaba Group Holding Ltd., a Chinese technology giant, reported strong results for the quarter ending December. The profit reached 48.9 billion Yuan ($6.7 billion).
The company attributes the success to its international growth in e-commerce and its ongoing push for artificial intelligence.
The revenue increased 8% over the previous year to reach $38,38 billion. This was higher than analysts’ predictions of $38,23 billion.
FactSet reported that adjusted earnings per share were $2.93 – also exceeding market expectations of $2.67.
Alibaba CEO Eddie Wu said, “This quarter’s results showed substantial progress in our ‘user-first AI-driven’ strategies as well as the reaccelerated growth of core business.”
Alibaba’s shares were up about 8% in the morning of Thursday.
Since the beginning of this year, the stock price has increased by over 45% at both New York and Hong Kong.
Alibaba puts AI and cloud computing in the heart of its strategy
Alibaba’s Cloud Intelligence Group reported a 13 percent increase year-over-year in revenues, which reached 31.7 billion Yuan.
AI sales have grown by triple digits for six consecutive quarters, a testament to the importance AI is playing in cloud revenues.
Wu stated that revenue growth for Cloud Intelligence Group will be driven by AI in the future.
Alibaba’s AI initiative has attracted renewed interest, especially after the recent Apple partnership to bring AI features into iPhones in China.
Chinese AI firms are stepping up their efforts to compete against US AI leaders.
Local startup DeepSeek announced in January that its new AI model is more cost-effective and efficient than American counterparts.
Alibaba has responded to DeepSeek by releasing an updated version of Qwen 2, its AI model. The company claims that Qwen 2.5 outperforms DeepSeek technology.
Jack Ma returns as Beijing calls for private sector growth
Alibaba founder Jack Ma made a rare appearance in public earlier this week during a meeting behind closed doors with Chinese President Xi Jinping.
Xi, who was joined by several business leaders of note, urged private companies to “show off their talent” and increase their confidence about China’s new era in economic activities.
Ma was once an outspoken critic of Chinese regulators. However, he has been largely absent from the media since Beijing cracked down on China’s tech industry in 2020.
Ses participation at the meeting could signal a shift in the relationship between China’s government and the private sector.
Consumer sentiment and retail sales remain the main concerns
Alibaba’s main e-commerce platform, Taobao, and Tmall Group reported an annual revenue increase of 5%, with a total of 136.1 billion Yuan.
Although the rise in spending suggests a resilient consumer market, there are still questions about China’s economic recovery.
The December retail sales figures in China exceeded expectations, with a 3.7% increase year-overyear. Beijing has taken measures to counter the prolonged downturn of real estate.
The Chinese government has announced interest rate reductions and an ambitious 10-trillion yuan five-year fiscal stimulus package to stimulate growth.
Analysts warn that despite these efforts the consumer’s sentiment is still fragile. In January, inflation reached its highest rate in 5 months.
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