Alibaba showcases its AI technology application achievements of Alibaba Cloud at the World Artificial Intelligence Conference in Shanghai, China, July 26, 2025.
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Alibaba generated better-than-expected revenue in its fiscal second quarter, thanks to accelerating sales in its key cloud computing division.
Here are the company’s results in its fiscal second quarter ended September 30 compared to LSEG estimates:
- Revenue: 247.8 billion Chinese yuan ($34.8 billion) versus 242.65 billion yuan.
Turnover increased by 5% year-on-year.
Alibaba’s New York-listed shares were up 4% premarket.
Investors are focusing on Alibaba’s cloud computing division, which accounts for its revenue from artificial intelligence. In recent quarters, Alibaba’s cloud revenue growth has accelerated.
Alibaba reported a 34% year-on-year increase in cloud computing revenue to 39.8 billion yuan, compared to an expected 37.9 billion yuan. This growth rate was faster than the 26% recorded in the June quarter.
The Chinese tech giant said its investments in AI were helping its cloud unit.
“Robust demand for AI further accelerated our Cloud Intelligence Group business, with revenue increasing 34% and AI-related product revenue achieving triple-digit year-over-year growth for the ninth consecutive quarter,” CEO Eddie Wu said in an earnings release on Tuesday.
In September, the company announced plans to increase spending on AI models and infrastructure development, on top of the 380 billion yuan ($53 billion) over three years announced in February. Alibaba said on Tuesday it spent about 120 billion yuan in capital expenditures on AI and cloud infrastructure over the past four quarters.
Earnings before interest, taxes, depreciation and amortization (EBITA), a measure of profitability, rose 35% to 3.6 billion yuan for its cloud division.
Alibaba has become one of China’s leading AI players. On Monday, Alibaba said its Qwen app, the rival to Chinese giant ChatGPT’s OpenAI, surpassed 10 million downloads in the first week after its public launch. The app is powered by Alibaba’s Qwen artificial intelligence models.
During this time, the company invested heavily in the cutthroat instant trading market. It’s a product offering from Alibaba and some of its Chinese e-commerce rivals that promises super-fast delivery on certain items.
Investments in this new segment have weighed on the overall profitability of Alibaba’s business, although cloud computing remains strong.
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