Alibaba Group recorded its strongest daily stock surge since 2022 in early September 2025. The Hong Kong exchange saw share prices rise more than 19% in a single trading day, while American depositary receipts climbed nearly 13%. The catalyst came from quarterly results showing a 76% increase in net earnings and 26% cloud segment growth, benefiting from rising artificial intelligence demand among Chinese companies.
Alibaba Shares React to 76% Net Earnings Jump
In the second fiscal quarter of 2025, Alibaba achieved revenues of 247.65 billion Chinese yuan ($34.6 billion), representing just 2% year-over-year growth. While results fell short of analyst expectations, net earnings rose dramatically by 76-78% to approximately 43 billion yuan ($6 billion).
Key factors driving improved profitability include:
- Investment returns and partial sale of Turkish platform Trendyol stake;
- More efficient cost structure in cloud operations;
- Higher margins from artificial intelligence products.
This development confirms the company can maintain stable core business while improving profitability through new technology segments and enhanced service portfolio.
Cloud Division Accelerates Growth to 26% Annually
Alibaba Cloud recorded 26% year-over-year revenue growth in the recent quarter, significantly faster than previous periods. The segment benefits primarily from growing Chinese company demand for cloud services connected to artificial intelligence.
Key cloud growth drivers include:
- Eight consecutive quarters of triple-digit AI product growth;
- Artificial intelligence transition from testing to regular business use;
- Rising need for high computing power in the Chinese economy.
From a portfolio perspective, cloud and AI gradually strengthen their weight against traditional online commerce, indicating successful business model transformation toward higher added value.
Proprietary AI Chip Reduces Foreign Dependence
Developing proprietary artificial intelligence chips forms part of the technology strategy. This step holds crucial significance given American sanctions on advanced chip exports to China. Custom chip design can:
- Secure long-term access to necessary components;
- Reduce dependence on external suppliers like NVIDIA or Intel;
- Ensure continuity of key AI and cloud projects.
Domestic chip development represents strategic investment that may significantly impact Alibaba share competitiveness in the global technology market.
Alibaba Expands Express Delivery Despite Higher Costs
Alibaba launched rapid delivery services within the Taobao platform this year, enabling selected goods delivery within one hour. Express delivery expansion responds to changing consumer preferences and competitive pressure from JD.com, Meituan, and Pinduoduo.
Financial impact includes:
- Short-term increases in delivery and logistics costs;
- Reduced immediate profitability of traditional online commerce;
- Potential long-term customer base and market share strengthening.
This strategy demonstrates Alibaba’s effort to maintain dominant position in core retail business while transforming toward technology services.
Market Rewards Strategic Transformation with Record Growth
Positive response to results and strategic moves reflected in capital markets. Hong Kong shares recorded the most significant daily growth since early 2022, while American depositary shares rose nearly 13%. For comparison, global cloud leaders like Amazon Web Services grow at 15-20% annually, while Alibaba Cloud achieves 26% growth in the rapidly developing Chinese market.
Several analysts revised their target prices upward, reasoning that investment strategies in AI and cloud strengthen long-term growth prospects for market capitalization.
Current dynamics show gradual shift from traditional online commerce to broader technology services. This trend may positively influence revenue structure and margin stability if Alibaba maintains technological competitiveness in environments with limited access to foreign technologies.
Continuing the current trend will depend primarily on Alibaba Cloud results and proprietary AI chip success in the competitive Chinese technology market environment.
