GoKawiilChinese tech giant Alibaba on Thursday reported net income had dropped 66% year-over-year, as it missed analyst revenue expectations.
Here's how Alibaba performed its fiscal quarter, ending Dec. 31, 2025:
Revenue: 284.8 billion Chinese yuan ($41.4 billion), compared to the 290.7 billion Chinese yuan expected by analysts, according to data compiled by LSEG.
Net income: 15.6 billion Chinese yuan compared to 46.4 billion Chinese yuan in the same period a year ago.
Alibaba's U.S.-listed shares dropped 5% in premarket trading on Thursday.
The tech giant noted that the net income decrease was primarily due to the 74% year-on-year drop in operational income which was impacted by investments in quick commerce, user experiences and technology.
The results were "softer" than expected and below expectations on revenues, adjusted net profit, and adjusted operational income, Citi analysts said in a note. The slight acceleration in cloud revenue growth, which sat at 36% year-on-year, was a "positive note" coming in 1% above its consensus, but market expectations were higher, they said.
Alibaba is one of several Chinese AI firms that have been rushing to catch up to U.S. companies in the AI race.
"This quarter, Alibaba maintained strong investments across our core pillars of AI and consumption," Alibaba CEO Eddie Wu, said in a statement.
"AI is and will continue to be one of our primary growth engines. Our Cloud Intelligence Group's revenue is up 36% with AI-related product revenue delivering triple-digit growth for the tenth consecutive quarter."
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