Alibaba Group reported first-quarter revenue of 268.95 billion yuan, a 9% increase that slightly exceeded analyst estimates. Adjusted earnings per ADS reached 8.52 yuan, falling short of the 10.53 yuan consensus. U.S.-listed shares dropped between 2.6% and 4.5% in pre-market trading following the announcement.
The profit decline reflects a 75% surge in capital expenditures. Alibaba is aggressively expanding its AI infrastructure to compete in China's accelerating technology race, prioritizing long-term growth over short-term profitability.
Revenue from the AI and cloud division rose 45% to 48.44 billion yuan, beating market expectations. AI-related product revenue maintained triple-digit growth for the 12th consecutive quarter.