Catenaa, Wednesday, May 13, 2026- Alibaba stock rose by 7% on Wednesday as the company said that its growth accelerated for both its AI and cloud businesses in the latest quarter.
Revenue from its Cloud Intelligence Group, which focuses on cloud computing and AI developments, jumped 38% in the January-March quarter from a year ago. That was faster than the 36% and 34% growth in the previous two quarters, respectively.
However, Alibaba recorded an overall loss of $125 million from operations for the quarter, a key measure of profitability of its core operating businesses, which was down sharply from a $4.2 billion gain in the same period last year.
Growing technological investment was one of the main reasons for rising expenses that weighed on profitability, as technology companies globally race to invest to boost infrastructure in supporting the ballooning AI demand.
The Hangzhou-based company, which has about 130,000 employees, last year pledged investments of at least $56 billion over three years in cloud computing and AI infrastructure.
This week, Alibaba said it has fully connected its flagship Qwen AI app to its e-commerce platform Taobao, allowing users to “browse, compare, place orders, and manage deliveries through natural conversation” in hopes of driving up demand.
It launched its “agentic” AI tool Wukong in March to expand its products for commercial customers, and raised prices for some AI services.
“Alibaba’s AI has moved beyond the initial investment phase and progressed to commercialization at scale,” said CEO Eddie Wu on Wednesday in prepared remarks during an earnings call.
In March, Alibaba pledged a goal of surpassing $100 billion in annual AI and cloud revenue within the next five years.
Tencent, a key rival of Alibaba in AI, on Wednesday also reported weaker-than-expected revenue for the January-March quarter. Net profit was up 21%, which fell short of expectations, although some analysts believe its AI investments were also starting to deliver returns.
Capital expenditure across Chinese AI companies is likely to remain elevated as the “investment phase is far from over,” wrote Chelsey Tam, an analyst at Morningstar, in a recent research note, while the AI firms are going to increasingly pivot from user acquisition to monetization.
Despite the 7% gain for the New York Trading, the Alibaba Stock is still down by 2% so far this year.
