Alibaba just delivered its strongest cloud performance in over a year, with AI-powered services driving a 34% revenue surge that sent shares climbing 4% in premarket trading. The Chinese tech giant's cloud division hit 39.8 billion yuan ($5.6 billion) in quarterly revenue, beating analyst expectations by 5% and accelerating from the 26% growth rate posted just three months ago.
Alibaba just proved that the AI boom isn't slowing down - at least not in China. The e-commerce giant's cloud computing arm posted a blistering 34% revenue growth to 39.8 billion yuan ($5.6 billion), crushing analyst estimates and marking the fastest expansion rate in four quarters.
The surge sent Alibaba's New York-listed shares up 4% in premarket trading Tuesday, as investors finally got the AI validation they've been waiting for. According to quarterly results released today, the company's AI-related products have now achieved triple-digit year-over-year growth for nine straight quarters - a streak that positions Alibaba as China's most consistent AI revenue generator.
"Robust AI demand further accelerated our Cloud Intelligence Group business, with revenue up 34% and AI-related product revenue achieving triple-digit year-over-year growth for the ninth consecutive quarter," CEO Eddie Wu told investors in Tuesday's earnings statement. The comment signals that enterprise customers aren't just experimenting with AI anymore - they're spending serious money on it.
The timing couldn't be better for Alibaba. Just yesterday, the company announced that its Qwen app - China's answer to OpenAI's ChatGPT - crossed 10 million downloads within a week of its public launch. That's a download velocity that puts it in the same league as viral social media apps, not enterprise software tools.
Behind the scenes, Alibaba has been spending aggressively to maintain its AI leadership. The company disclosed it's already burned through 120 billion yuan ($16.8 billion) in AI and cloud infrastructure capital expenditure over the past four quarters. That's on top of the massive 380 billion yuan ($53 billion) three-year investment plan announced in February, with additional spending commitments made in September.
