Alibaba Shares Surge 13% on Cloud and AI Growth Despite Profit Decline
Alibaba Group Holding Ltd. (BABA) rallied 13.1% Friday as investors rewarded its accelerating cloud and artificial intelligence revenue, overshadowing a quarterly profit decline. The Chinese e-commerce giant reported 26% growth in its cloud intelligence unit, with AI developments taking center stage following China's restrictions on NVIDIA's H20 chips.
While overall revenue grew just 2%, Core commerce segments showed strength—domestic e-commerce rose 10% and international commerce jumped 19%. The company's heavy investments in Taobao Instant Commerce and marketing campaigns compressed margins, driving an 11% EBITDA drop. "When giants pivot, markets notice," observed one analyst, referencing Alibaba's strategic shift toward AI infrastructure.
