Alibaba Reports Q1 Earnings with 26% Cloud Intelligence Revenue Growth

Alibaba Group reported Q1 earnings with a 2% increase in revenue to RMB247,652 million (US$34,571 million), a 26% growth in revenue from its Cloud Intelligence Group driven by AI-related products, and a 76% increase in net income year-over-year. Despite a 3% decrease in income from operations, the company remains committed to investing in its strategic pillars of consumption and AI + Cloud.

Alibaba Group Holding Limited (NYSE: BABA) reported its Q1 earnings for the fiscal year ended June 30, 2025, with revenue increasing by 2% to RMB247.65 billion (US$34.57 billion), falling short of analyst expectations by 2% [1]. The company's Cloud Intelligence Group, driven by AI-related products, experienced a 26% year-over-year growth in revenue, reaching RMB33.4 billion (US$4.67 billion) [1]. Despite this, the company's overall net income increased by 76% year-over-year to RMB43.11 billion (US$6.13 billion) [1].

Alibaba's e-commerce segment, which includes platforms Taobao and Tmall, saw a 10% year-over-year growth in revenue to RMB19.6 billion (US$2.76 billion) [1]. However, the adjusted earnings in this segment fell by 21% year-over-year due to heavy investments in the instant commerce business [1]. The company's instant commerce division, which provides deliveries of certain products in China within an hour, generated revenue of over RMB14.8 billion (US$2 billion) [1], a 12% year-over-year increase.

Alibaba's strategic investments in AI and cloud computing are part of a $53 billion plan over the next three years, aiming to reduce dependency on U.S. technology and accelerate AI-driven growth [2]. The company's focus on AI and cloud infrastructure has positioned it to capitalize on long-term growth opportunities, despite the challenges posed by intense competition and macroeconomic headwinds.

Alibaba's stock price climbed 12.9% in the U.S. after initially dipping following the earnings report, indicating investor optimism about the company's strategic direction and the growth prospects of its cloud computing and AI segments [1].

References:
[1] https://www.cnbc.com/2025/08/29/alibaba-baba-june-quarter-2025-earnings-report.html
[2] https://www.ainvest.com/news/alibaba-q1-results-comeback-story-disappointing-earnings-revenue-misses-2508/