China's Alibaba Group Holdings Inc. missed out on revenue estimates, but expanded its AI cloud business between April and June 2025 brought strong quarterly growth.
Alibaba's crowdsegment revenues surged from 26% to 33.41 billion yuan ($4.67 billion) over the three months ended June 30th, easily defeating the expected 18.4% increase. This was ingrained by weaker growth than expected in the e-commerce business, with overall revenue delaying estimates by 2%.
Alibaba is one of the most offensive players in China's AI sector, and announces almost weekly upgrades.
Over the past four quarters, the company has cumulatively invested 100 billion yuan in research and development on AI infrastructure and AI products, group CEO Eddie Wu told analysts about the after-revenue call on Saturday.
“Investing in AI has begun to produce concrete results,” Wu said. “We see an increasingly clear path for AI to drive robust growth for Alibaba.”
The company-wide total revenue was 2476.5 billion yuan for the quarter ended June 30th, below the average estimate of 25.292 billion yuan compiled by LSEG.
This is the first time Alibaba has reported revenue from a Chinese e-commerce group. This includes platforms that include Taobao and Tmall, the new instant commerce business, the food delivery app ELE.ME, and travel agent Fliggy.
The group reported a 10% increase in revenue.
Revenue from Alibaba's operations fell 3% annually, with adjusted profit before interest, taxes and amortization down 14% primarily due to investments in the instant commerce business.
Earlier this week, rivals PDD Holdings and Meituan, alongside Alibaba and JD.com, were trapped in the battle for subsidies-driven market share in the instant retail space, but the increase in investment refused to focus on profits for the coming quarter. Executives from both companies said competition was growing during the period.
CFRA analyst Angelo Gino said while the pivot on quick commerce and AI investments has driven meaningful operational changes across the business, “profitability was influenced by growth initiatives that include user acquisition and technology infrastructure spending.”
Wu said Alibaba aims to use its quick commerce business to help build an overall consumer base for e-commerce, targeting 30 trillion yuan addressable markets. Jiang Fan, CEO of Alibaba's e-commerce business group, predicted that the Quick Commerce segment could contribute 1 trillion yuan in total annual product volume over the next three years.
International commercial revenues increased 19% due to the expansion of major markets in Europe and the Middle East.
Alibaba also said it had bought back stakes in Fosun International's logistics unit Cainiao for $349.8 million on Friday.
