Alibaba’s Mixed Q2 Earnings: Revenue Beat Overshadowed by Profit Plunge

Alibaba Group Holding Ltd. reported fiscal second-quarter revenue that surpassed analyst estimates, sending its U.S.-listed shares up more than 4% in premarket trading. The Chinese e-commerce giant posted sales of 247.8 billion yuan ($34.8 billion), a 5% year-over-year increase that exceeded the 242.65 billion yuan consensus.

Beneath the top-line strength, profitability metrics told a different story. Non-GAAP net income collapsed 72% to 10.4 billion yuan as the company ramped up investments in artificial intelligence, cloud infrastructure, and quick commerce initiatives. Earnings per American depositary share of 4.36 yuan missed expectations by nearly a third.

The Cloud Intelligence Group emerged as a bright spot, with revenue surging 34% to 39.8 billion yuan. AI-related products maintained their triple-digit growth streak for the ninth consecutive quarter, signaling Alibaba's deepening commitment to next-generation technologies despite near-term margin pressure.