Alibaba’s latest earnings report shows the Chinese tech megacap leaning hard into the two engines that management believes will define its future — namely, "instant commerce" and AI. And those bets are starting to pay off.
Instant commerce surged 60% and cloud revenue soared on AI workloads, sending shares higher for a second straight day
Photo by Horacio Villalobos#Corbis/Getty Images
Alibaba’s latest earnings report shows the Chinese tech megacap leaning hard into the two engines that management believes will define its future — namely, "instant commerce" and AI. And those bets are starting to pay off.
For the quarter ended September 30, Alibaba reported 15% revenue growth over last year, excluding its divested retail operations — making for one of its strongest showings in recent memory. The company credited growth in consumer activity and its expansion into one-hour delivery, a much-contested battleground where China’s biggest retailers are slashing prices and pouring money into logistics to win market share.
The company said revenue from its instant commerce businesses grew about 60%, driven by one-hour and same-day fulfillment services that draw users into Taobao’s broader ecosystem and function to boost frequent, repeat purchases.
Granted, this strategy is pretty expensive — adjusted earnings for Alibaba’s China commerce division fell sharply versus the 2024 numbers — but the company said the unit economics have “substantially improved” recently, with efficiency increasing and order values rising, too.
It’s primarily Alibaba’s other pillar — cloud computing.
Revenue at Alibaba Cloud grew 34%, on the back of demand for AI infrastructure and workloads driving eye-watering triple-digit growth in AI products. External cloud revenue climbed 29%, and the company is also gaining traction with its model "family," Qwen, which now boasts more than 180,000 derivative models on Hugging Face, a central marketplace for open-source AI. The analyst firm Omdia estimates Alibaba holds about 36% of China’s AI cloud market, which puts the company well ahead of domestic rivals.
Alibaba’s international commerce also passed a milestone, with its overseas division reporting 10% revenue growth and posting a profit.
Alibaba shares rose another 3% heading into Tuesday’s market open.
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