Alibaba showcase its AI technology application achievements from Alibaba Cloud at the World Artificial Intelligence Conference in Shanghai, China on July 26, 2025.
Alibaba delivered better than expected revenue in its fiscal second quarter as sales in its key cloud computing division accelerated.
Alibaba's New York-listed shares were around 4.3% higher in premarket trade as investors looked past a plunge in profitability.
Here's how the company did in its fiscal second quarter ended Sept. 30 versus LSEG estimates:
Revenue rose 5% to 247.8 billion Chinese yuan ($34.8 billion) versus 242.65 billion yuan the previous year.
Investors are focused on Alibaba's cloud computing division which books its revenue related to artificial intelligence. Over the past few quarters, Alibaba's cloud revenue growth has accelerated.
Alibaba reported a 34% year-on-year rise in cloud computing revenue to 39.8 billion yuan versus expectations of 37.9 billion yuan. That growth rate was faster than the 26% notched in the June quarter.
The Chinese tech giant said its investments in AI were helping its cloud unit.
"Robust AI demand further accelerated our Cloud Intelligence Group business, with revenue up 34% and AI-related product revenue achieving triple-digit year-over-year growth for the ninth consecutive quarter," CEO Eddie Wu said in an earnings statement on Tuesday.