Market attention has sharpened on Chinese technology developments following the release of DeepSeek's new artificial intelligence model. DeepSeek claims this model is more efficient and affordably produced than its leading U.S. counterparts. In this context, Alibaba Group Holding Ltd. has reported impressive financial results for the December quarter, driven by its Cloud Intelligence unit. The company's revenue and profits exceeded market expectations, signaling a robust performance in its core cloud and AI sectors.
Alibaba's U.S.-listed shares of Cloud Intelligence Group rose 4.3% at 05:53 ET after the release of the results. The company's stock has surged by approximately 50% on both the New York and Hong Kong exchanges in the year to date. This upward trend reflects investor confidence in Alibaba's strategic focus on cloud technology and artificial intelligence.
The company's CEO, Eddie Wu, highlighted the pivotal role of the Cloud Intelligence unit in driving revenue growth. He stated:
"Our Cloud revenue growth reignited to double digits at 13%, with AI-related product revenue achieving triple-digit growth for the sixth consecutive quarter."
- Alibaba CEO Eddie Wu
Alibaba's quarterly revenue reached 280.154 billion yuan, surpassing analyst expectations of 279.34 billion yuan. The net income for the quarter ending December 31 stood at 48.945 billion yuan ($6.72 billion), underscoring the company's financial strength.
The Cloud Intelligence Group posted a year-on-year sales growth of 13%, amounting to 31.742 billion yuan in the last three months of the year. This growth was significantly bolstered by AI-related products, which have continuously achieved triple-digit growth for six consecutive quarters.
Alibaba's strategic advancements in AI began with the launch of its ChatGPT-style product, Tongyi Qianwen (Qwen), in 2023. Recently, the company introduced a new version, Qwen 2.5, which it claims surpasses DeepSeek's latest model. Furthermore, Alibaba has partnered with Apple to integrate AI features into iPhones sold in China, demonstrating its commitment to expanding its AI applications.
Eddie Wu expressed optimism about Alibaba's future prospects, stating:
"Looking ahead, revenue growth at Cloud Intelligence Group driven by AI will continue to accelerate."
- Alibaba CEO Eddie Wu
He further emphasized the progress made:
"This quarter's results demonstrated substantial progress in our 'user first, AI-driven' strategies and the re-accelerated growth of our core businesses."
- Alibaba CEO Eddie Wu