Alibaba's stock saw a sharp rise following the release of its latest earnings report, reflecting strong performance in key segments such as cloud computing and e-commerce. Shares listed in Hong Kong climbed as much as 11%, closing nearly 9.2% higher, while its U.S.-listed stock jumped more than 8% after the results were published.

For the quarter ended December 31, Alibaba reported a net income of 48.95 billion yuan ($6.72 billion), significantly surpassing estimates and more than tripling the 14.4 billion yuan recorded in the same period last year. Revenue reached 280.15 billion yuan ($38.38 billion), exceeding market expectations, with an 8% year-over-year growth. Adjusted earnings per share also outperformed analyst estimates.

E-Commerce and Cloud Drive Growth

Alibaba's core e-commerce business showed solid momentum, with revenue from its domestic retail operations rising 5% year over year to 130.4 billion yuan ($18.64 billion). Customer management revenue grew by 9% due to increased online sales and improved platform monetization. The company's international digital commerce segment surged 32% year over year to 36.2 billion yuan ($5.17 billion), fueled by cross-border expansion and strong demand from platforms such as AliExpress.

Cloud computing remained another key driver, with revenue increasing 13% to 30.5 billion yuan ($4.35 billion). The demand for AI inference services, which now account for a significant portion of new cloud-related business, continues to rise. To capitalize on this trend, Alibaba has committed to its most concentrated investment in AI and cloud infrastructure over the next three years—expected to exceed its total cloud investments from the past decade.

Strategic Investments and Future Outlook

Alibaba's recent moves indicate a stronger push toward global e-commerce profitability and AI development. The company has expanded its cloud presence by launching its first cloud region in Mexico and increasing investments in AI-driven solutions. This strategic focus aligns with China's broader efforts to stimulate economic activity, including subsidies to boost consumption and digital transformation.

Additionally, Alibaba's financial position remains robust, with $83.58 billion in cash and equivalents as of the end of 2024. The company generated an operating cash flow of $9.72 billion for the quarter, marking a 10% year-over-year increase, though free cash flow declined due to increased capital expenditures on cloud infrastructure.

Looking ahead, Alibaba expects its international e-commerce unit to reach profitability in the next fiscal year, supported by continued growth in cross-border retail. Meanwhile, the company's commitment to AI and cloud computing is expected to shape its long-term trajectory, positioning it as a key player in the evolving global tech landscape.

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