Alibaba's quarterly revenue up 9%, misses adjusted profit due to heavy AI spend

Business Recorder reported that Alibaba's quarterly revenue climbed 9% on Thursday, yet adjusted earnings per ADS came to 8.52 yuan, short of the 10.53 yuan analysts had projected. Heavy capital expenditure, up 75% at 67.68 billion yuan, was behind the shortfall in the period to June 30. Shares listed in the United States slipped 2.6% in pre-market dealings.

Revenue for the quarter was 268.95 billion yuan, slightly above the 268.88 billion yuan average analyst estimate compiled by LSEG. Revenue from AI cloud and compute services grew 45%, reaching 48.44 billion yuan or $7.21 billion. The growth was driven by strong AI demand in the cloud business.

Earlier this year, Alibaba separated its AI operations from its cloud unit and placed Eddie Wu in charge of the Alibaba Token Hub group. The move aims to make the AI segment profitable. Ant Group, Alibaba's fintech arm, posted quarterly profit up 1% from a year earlier, according to Reuters calculations.