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Alibaba’s stock saw a significant surge in premarket trading on Thursday after the company posted strong earnings for the December quarter, driven by solid growth in its Cloud Intelligence and e-commerce divisions. The Chinese tech giant reported a net income of 48.945 billion yuan ($6.72 billion), surpassing market expectations of 40.6 billion yuan and marking a substantial increase from the 14.433 billion yuan recorded in the same period last year. Meanwhile, revenue reached 280.154 billion yuan, slightly exceeding analyst projections, and the stock has gained about 50% on both the New York and Hong Kong exchanges this year.
The company’s cloud computing division played a crucial role in its financial success, reporting a 13% year-on-year revenue increase, bolstered by strong AI-related product sales that continued their triple-digit growth streak for the sixth consecutive quarter. Alibaba’s partnership with Apple to introduce AI features to iPhones in China has further highlighted its technological ambitions. Additionally, the company is doubling down on artificial intelligence, recently launching the Qwen 2.5 model, which it claims outperforms rival local startup DeepSeek’s AI system. This tech expansion aligns with the broader shift in China’s technology landscape, underscored by President Xi Jinping’s recent meeting with business leaders, including Alibaba founder Jack Ma, to encourage private sector growth.
On the retail front, Alibaba’s core e-commerce units, Taobao and Tmall Group, saw a 5% year-over-year revenue increase, reaching 136.091 billion yuan in the December quarter. Its International Digital Commerce Group, responsible for global operations like Lazada and AliExpress, grew even faster, with a 32% revenue boost to 37.756 billion yuan. While concerns persist over China’s economic outlook and consumer sentiment, recent data showed an unexpected 3.7% rise in retail sales for December, with Beijing deploying stimulus measures to counteract a sluggish property market. Despite mixed signals from analysts on long-term consumer spending trends, inflation in China picked up pace in January, hinting at a potential recovery in domestic demand.
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