Alibaba (BABA) Soars 6.76% on AI, Cloud Revenue Surge

On August 29, 2025, Alibaba's stock surged by 6.76% in pre-market trading, reflecting a strong market response to the company's recent financial performance and strategic initiatives.

Alibaba reported a solid revenue beat for the first quarter, with revenue reaching $34.6 billion. This growth was driven by strong performances in AI cloud and e-commerce sectors, despite missing earnings per share expectations. The company's core businesses, including customer management and Cloud Intelligence Group, showed robust revenue growth, with AI-related revenue growing significantly.

Alibaba's strategic focus on AI and cloud computing is evident in its recent developments. The company has been working on a new AI chip to reduce its reliance on Nvidia, further solidifying its position in the cloud computing market. This move is part of a broader strategy to enhance its technological capabilities and maintain its competitive edge.

Throughout the year, Alibaba's stock has seen a nearly 50% increase, driven by the stabilization of its e-commerce business and the acceleration of its cloud business. The company's efforts to return value to shareholders, including significant buybacks and dividends, have also contributed to its positive market sentiment.

Despite the overall positive outlook, there are concerns about the company's profitability. While revenue growth is strong, the quality of the business has been decreasing, and recent profit boosts have been attributed to one-time divestments. However, Alibaba's strategic investments in AI and cloud computing are expected to drive long-term growth and profitability.