BABA-W (09988) shares surged 14.95% to HK$133 in early trading on Monday, with trading volume reaching HK$2.518 billion. The dramatic rise follows Alibaba's impressive first quarter fiscal year 2026 financial results released last week, which showcased the company's strong performance and strategic investments in AI and cloud technologies.
Alibaba reported a 10% year-over-year revenue growth to RMB 247.652 billion, excluding divested businesses, while net profit soared 76% to RMB 42.382 billion. The company's cloud business was a particular highlight, with Alibaba Cloud revenue growing 26% year-over-year, marking its highest growth rate in three years. AI-related product revenue achieved triple-digit year-over-year growth for the eighth consecutive quarter.
Investors were especially encouraged by Alibaba's significant investments in AI and cloud infrastructure. The company's capital expenditure in AI+Cloud reached a record high of RMB 38.6 billion for the quarter, up 220% year-over-year. This aligns with Alibaba's previously announced three-year RMB 380 billion investment plan in AI and cloud technologies, demonstrating the company's commitment to these strategic areas despite potential changes in chip supply policies.
Alibaba Group CEO Eddie Wu emphasized the company's focus on mass consumption and AI+Cloud as key drivers for long-term growth. The positive market reaction reflects investor confidence in Alibaba's strategic direction and its potential to capitalize on the growing demand for AI and cloud services in the rapidly evolving tech landscape.
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