Focus: Q3 2025 U.S. Earnings Reports Fueled by the artificial intelligence (AI) boom, Alibaba Group reported a 34% year-over-year surge in cloud computing revenue for the latest quarter.
However, the Chinese tech giant's total revenue for the July-September quarter grew just 5% year-over-year to 247.8 billion yuan ($35 billion), while profits plummeted 52% compared to the same period last year. The decline was attributed to fierce price wars in China's e-commerce sector, including the food delivery segment, which eroded short-term profitability. Rival JD.com also reported a 55% drop in net profit for the same quarter.
Originally an e-commerce pioneer, Alibaba has shifted its focus to cloud computing and AI technologies. Earlier this year, the company pledged to invest at least 380 billion yuan ($53 billion) over three years to advance cloud and AI infrastructure.
In a pre-released statement on Tuesday, Alibaba CEO Eddie Wu noted that the group's "substantial" investments in AI contributed to revenue growth. The 34% cloud revenue increase outpaced the 26% growth recorded in the April-June quarter (Q2 of the calendar year).
The company also highlighted that AI demand is "accelerating" and expressed "strong confidence in future AI-driven growth." Alibaba revealed that its final AI investment could exceed the planned 380 billion yuan to meet surging demand.
On Monday, November 24, Alibaba announced that its upgraded AI chatbot, Qwen (designed to compete with OpenAI’s ChatGPT), surpassed 10 million downloads in its first week after launch.
Alibaba’s Hong Kong-listed shares rose 2% on Tuesday, while its U.S.-traded shares gained 2.4% in pre-market trading. Buoyed by optimism over its AI advancements, the stock has surged over 90% year-to-date.
Chinese AI momentum has strengthened since tech startup DeepSeek disrupted the industry, raising doubts about U.S. dominance in the field.
Recent earnings from other Chinese tech giants have been mixed. Tencent, an AI competitor to Alibaba, reported a 15% revenue jump for the July-September quarter, while Baidu, another rival in AI development, saw a 7% revenue decline.
Despite Nvidia’s strong earnings last week easing some concerns, investors and analysts remain wary of an overheating AI bubble.
