Alibaba's Revenue Jumps 9% as AI Cloud Growth Hits 45%—But a Profit Plunge Sends Shares Lower
Alibaba reported fiscal first-quarter revenue of 268.95 billion yuan, up 9% year over year and slightly above estimates, marking its fastest quarterly growth in about three years. Most of the gain came from cloud and AI: Alibaba Cloud external revenue accelerated to 45%, and AI-related product revenue reached 12.38 billion yuan, its 12th straight quarter of triple-digit annual growth. CEO Eddie Wu said the results reflected improving commercialization of Alibaba’s full-stack AI strategy. The AI push is expensive. Capital spending jumped 75% to 67.7 billion yuan, mainly for chips and more computing capacity, and free cash flow turned into a more than $6.6 billion outflow. Investors reacted cautiously, sending U.S.-listed shares down about 5% early in trading before a partial recovery. Alibaba is increasingly focusing on distributing its Qwen models, including releasing Qwen 3.8-Max as open weights and ending the free tier of Qwen Code. It is also expanding internationally, including an Apple deal to bring Apple Intelligence to Chinese iPhones.
