Chinese tech giant Alibaba on Thursday reported net income had dropped 66% year-over-year, as it missed analyst revenue expectations.
Here’s how Alibaba performed its fiscal quarter, ending Dec. 31, 2025:
Revenue: 284.8 billion Chinese yuan ($41.4 billion), compared to the 290.7 billion Chinese yuan expected by analysts, according to data compiled by LSEG.Net income: 15.6 billion Chinese yuan compared to 46.4 billion Chinese yuan in the same period a year ago.
Alibaba’s U.S.-listed shares dropped 4% in premarket trading on Thursday.
The tech giant noted that the net income decrease was primarily due to the 74% year-on-year drop in operational income which was impacted by investments in quick commerce, user experiences and technology.
“This quarter, Alibaba maintained strong investments across our core pillars of AI and consumption,” Alibaba CEO Eddie Wu, said in a statement.
“AI is and will continue to be one of our primary growth engines. Our Cloud Intelligence Group’s revenue is up 36% with AI-related product revenue delivering triple-digit growth for the tenth consecutive quarter.”
Revenue from Alibaba’s cloud business was 43.3 billion Chinese yuan. “This momentum was primarily driven by public cloud revenue growth, including the increasing adoption of AI-related products,” the company said.
Alibaba is one of several Chinese AI firms that have been rushing to catch up to U.S. companies in the AI race.
It’s pledged tens of billions of dollars in investments in AI and cloud infrastructure, as it looks to transition from being just an e-commerce giant to an AI leader.
In January, the tech giant announced a new AI model series, and has also been investing in ‘agentic commerce’ as it looks to turn chatbots into full-service shopping and payment tools.
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