Alibaba
AI Sentiment Analysis: +3
Alibaba’s AI Cloud Pivot Faces Its Profitability Test
- Alibaba’s June-quarter profit fell 75% year over year as capital expenditures surged 75% to approximately RMB67.7 billion.
- AI Cloud and Compute Services revenue grew 45% to RMB48.4 billion, while adjusted EBITA rose 133% to RMB5.6 billion.
- Analysts expect September-quarter cloud revenue growth of roughly 52% to 53%, with margins rising from 11.6% toward 12% to 13.5%.
- Management and analysts expect cloud profits to offset AI Labs losses by the December quarter, although the timing depends on demand, chip costs, and infrastructure utilization.
- Alibaba plans to invest at least RMB380 billion in AI and cloud infrastructure through 2029 and expand global data-center capacity beyond 20 gigawatts by 2032.
- Regulatory and geopolitical risks remain substantial, including a U.S. military-affiliate designation, chip restrictions, AI safety-disclosure concerns, and potential shareholder dilution from the $10.2 billion share placement.
- Updated: Oct 11, 2026, 6:04 PM PDT