Alibaba Posts Strong Quarter, Surpassing Analyst Revenue Forecasts

Chinese e-commerce giant Alibaba reported quarterly revenue that exceeded market expectations on Tuesday, supported by continued investment in one-hour delivery services and robust growth in its cloud computing business. The strong results lifted Alibaba’s U.S.-listed shares 2.5% in premarket trading, signaling renewed investor confidence in the company’s strategic direction.

The company reported revenue of 247.80 billion yuan ($34.97 billion) for the second quarter, outperforming the consensus estimate of 242.65 billion yuan, according to LSEG data.

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Fast Delivery Boosts User Growth Amid Fierce Competition

Alibaba has been pouring resources into instant commerce, an area where major Chinese retailers are competing aggressively by offering deep discounts and rapid delivery services. Alibaba’s one-hour delivery options have helped drive higher user engagement across its major shopping platforms, including Taobao and Tmall.

Instant delivery has become a central battleground in China’s e-commerce sector, with retailers seeking to build customer loyalty through convenience and speed.

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Appliance Trade-In Subsidies Support Sales

Alibaba’s sales were also supported by Beijing’s appliance trade-in subsidies, a nationwide initiative encouraging consumers to exchange older home appliances—such as refrigerators, washing machines, and televisions—for discounted new models.

The policy has contributed to increased demand across Alibaba’s platforms, though the program is now winding down and will officially end on December 31. Analysts say the subsidy helped sustain household consumption during a period of uneven economic recovery in China.

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Cloud Division Strengthens as Alibaba Accelerates AI Investments

Alibaba’s cloud computing business—one of the company’s most important growth engines—delivered strong performance this quarter. The company has been positioning its cloud infrastructure at the center of its long-term strategy, especially as demand for artificial intelligence capabilities rises across industries.

Alibaba has been doubling down on AI investments, allocating billions of dollars to:

• Building advanced cloud infrastructure
• Developing large language models and generative AI tools
• Integrating AI into e-commerce, logistics, and digital services
• Expanding its suite of AI products for enterprise customers

These investments aim to solidify Alibaba’s position in China’s rapidly expanding AI market while driving operational efficiency across its consumer ecosystem.

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Market Outlook

Analysts view Alibaba’s return to revenue growth as a positive sign after several quarters of economic uncertainty and intense competition. Continued momentum in cloud services, AI product development, and instant commerce could support further gains in the coming quarters.

However, investors will be watching closely as China’s retail sector adjusts to changing consumer trends and the phaseout of government support programs like the appliance trade-in initiative.