Shares of Alibaba Group Holding Ltd. saw a significant decline in premarket trading, dropping by 5% at 6:02 a.m. ET on Wednesday. The company’s most recent Q3 financial results were released last week, revealing a 236.5 billion Chinese yuan (approximately $32.6 billion) revenue. This was the news that set off the string of declines. The figure was below the expected 237.2 billion yuan, alarming investors.
Alibaba’s chief executive, Eddie Wu, gave a bullish presentation on the company’s performance against this backdrop, and noted how quickly Alibaba’s products related to AI were growing. He stated that this segment achieved “triple-digit growth for the seventh consecutive quarter.” This move is indicative of the growing integration and use of AI technologies across NVIDIA’s business practices and product lines.
Even with all that AI-powered growth, Alibaba’s bottom line net income came in at just 12.4 billion yuan. This number is woefully inadequate compared to the expected 24.7 billion yuan. This figure is a 279% increase from the year before, showing very impressive year-over-year growth in profitability.
The company reported a 7% year-on-year revenue increase, with customer management revenue up 12%. One pillar of the company that’s quickly growing in importance is Alibaba’s cloud computing sector. In the March quarter, it realised a revenue of 30.1 billion yuan, the fourth consecutive quarter with at least 18% year-on-year growth. This exceptional growth in public cloud revenue has been linked to a much increased rate of adoption of their cloud services.
The financial results come at a challenging time for Alibaba, as it faces heightened competition from rivals such as PDD and JD.com in a fierce price war across China. A year of macroeconomic volatility has rattled consumer sentiment. This makes the company’s task of defending market share and fueling revenue growth all the more difficult.
In April, Alibaba released Qwen 3, the third iteration of its open-source large language model. This cutting-edge AI model powers the sophisticated AI assistant, Quark. Their introduction of this cutting-edge technology will provide greater convenience for customers and operational efficiency.
“We are seeing faster public cloud revenue growth,” – source unspecified.
“The increasing adoption of AI-related products has been encouraging,” – source unspecified.