Alibaba Group Holding Ltd (NYSE:BABA) stock fell 2.02% (As on November 25, 11:38:15 AM UTC-4, Source: Google Finance) after the company posted stronger-than-expected quarterly revenue driven by gains in its AI-powered cloud division. Cloud Intelligence Group revenue reached RMB39.8 billion ($5.59 billion), beating forecasts of 37.99 billion yuan. Company figures showed stronger underlying growth: total revenue and revenue excluding Alibaba-consolidated subsidiaries accelerated to 34% and 29% respectively. AI-related product revenue grew by triple digits for the ninth consecutive quarter. Sales in the China e-commerce segment advanced 16% to 132.58 billion renminbi. Within this division, e-commerce inclined to 102.93 billion renminbi from 94.47 billion in the prior-year quarter. China commerce wholesale sales climbed 13% to 6.74 billion renminbi. The international digital commerce business grew 10% to about 34.8 billion renminbi, reflecting double-digit gains in retail and wholesale. The all others segment, which includes Cainiao, Amap and Hujing digital media and entertainment, fell 25% to 62.97 billion renminbi, mainly due to the disposal of the Sun Art and Intime businesses, the company said.

Non-GAAP earnings per ADS were $0.61, missing estimates by $0.20. Non-GAAP diluted EPS in RMB was 4.36, down about 71% year-over-year. Management pointed to product adjustments and restructuring as factors, while investors cheered the top-line resilience. The company had reported the adjusted revenue growth of 3 percent to $34.81 billion in the third quarter of FY25, beating the analysts’ estimates for revenue by about $570 million. On an RMB basis, revenue was RMB247.8 billion, a 5% increase year-on-year; excluding sales from disposed units Sun Art and Intime, like-for-like revenue grew about 15%, beating the FactSet-polled consensus of 243.75 billion renminbi.

Moreover, Alibaba has already invested 120bn yuan in its AI infrastructure in a year and could revise upwards its initial three-year budget of 380bn yuan. The Qwen app, based on the group’s proprietary models, surpassed 10 million downloads in its first week after public launch, consolidating Alibaba’s position as a major AI player in China. At the same time, the group’s overall profitability has fallen sharply, with EBITDA down 78% to 9.1bn yuan, weighed down by investments in the quick commerce segment. Nevertheless, this activity is growing rapidly, with revenue up 60% compared with 12% in the previous quarter. Domestic online commerce as a whole recorded growth of 16%, and Alibaba now regards quick commerce as a strategic pillar, with a target of 1 trillion yuan in business volume within three years.