The e-commerce giant's shares listed in the U.S. soared by 8%, marking its biggest single-day gain since last September, closing at $135.97—also a three-year high.
Wedbush Securities analyst Daniel Ives noted that Alibaba had a pivotal quarter, highlighting the strength of its cloud business and the acceleration of its AI strategy.
Additionally, the Wall Street Journal revealed that billionaire investor Ryan Cohen has upped his stake in Alibaba to around $1 billion recently.
Ives commented that Cohen likely isn't the only one betting on Alibaba, as it seems poised to be a key player in the competitive AI landscape in China.
During a call with analysts, Alibaba CEO Eddie Wu emphasized that AI represents a rare opportunity for significant industry transformation, something that happens only once every few decades. He mentioned that the company plans to invest more in AI and cloud computing over the next three years than it has in the last decade, though he didn't specify the exact amount.
For the quarter ending December 31, Alibaba reported revenues of 280.15 billion yuan ($38.58 billion), slightly above the 279.34 billion yuan forecasted by 17 analysts surveyed by LSEG.
To boost consumer spending and sales in their core domestic e-commerce sector, Chinese retailers like Alibaba have been slashing prices and ramping up promotional offers.
Strong demand from international markets and increased year-end spending contributed to the company's sales growth.
Alibaba's domestic e-commerce platforms, Taobao and Tmall Group, saw a 5% increase in revenue for the quarter. Company leaders mentioned that they will keep focusing on stabilizing their market share in the near future.
'AI POWERHOUSE'
Alibaba has kicked off 2025 strong in the AI sector in China, attracting investors with smart business moves. Its stock price has jumped over 60% since the start of the year.
"When it comes to our AI strategy, we’re all about pushing the limits of intelligence," Wu stated, noting that AI could potentially "significantly impact or even replace 50% of global GDP."
The recent inclusion of Alibaba co-founder Jack Ma in a meeting with private enterprise leaders led by President Xi Jinping has boosted investor confidence even more, especially with photos of Ma and Xi shaking hands circulating.
"Alibaba has secured its place in the AI powerhouse and is now enjoying the benefits," commented Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Alibaba is collaborating with Apple to integrate its AI solutions into iPhones sold in China, strengthening its position in a market where local competitor DeepSeek is gaining traction with affordable models.
In late January, Alibaba introduced an enhanced version of its Qwen 2.5 AI model, claiming it outperforms DeepSeek-V3.
The revenue from Alibaba's Cloud Intelligence Unit grew by 13%.
The company’s international e-commerce segment, which includes AliExpress, Alibaba.com, and other regional platforms, remained one of its fastest-growing areas, boasting a 32% revenue increase for the quarter.
Last November, Alibaba announced the merger of its domestic and international e-commerce platforms into a single unit, the Alibaba E-commerce Business Group, combining Taobao, Tmall Group, and the Alibaba International Digital Commerce Group.