Chinese technology giant alibaba on Thursday reported a 66% drop in net income from a year earlier, missing analysts’ revenue expectations.
Alibaba’s financial results for the fiscal quarter ended December 31, 2025 are as follows:
Sales: 284.8 billion yuan ($41.4 billion), compared with analyst expectations of 290.7 billion yuan, according to data compiled by LSEG Net profit: 15.6 billion yuan, compared with 46.4 billion yuan a year earlier.
Alibaba’s U.S.-listed shares fell 4% in pre-market trading on Thursday.
The technology giant noted that the decline in net income was primarily due to a 74% year-over-year decline in operating income, impacted by investments in quick commerce, user experience, and technology.
Alibaba is one of several Chinese AI companies rushing to catch up with 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 continues to be, one of our key growth engines. Revenue in our Cloud Intelligence group grew 36%, and our AI-related product revenue has recorded triple-digit growth for 10 consecutive quarters.”
Alibaba’s revenue from its cloud business was CNY43.3 billion. “This momentum was primarily driven by increased public cloud revenue, including increased adoption of AI-related products,” the company said.
The company is pledging tens of billions of dollars in investments in AI and cloud infrastructure as it aims to transition from just an e-commerce giant to an AI leader.
The tech giant announced a new series of AI models in January and is also investing in “agent commerce” with the aim of turning chatbots into full-service shopping and payment tools.
