Alibaba’s shares popped more than 8% overnight after cloud unit and e-commerce growth pushed quarterly profit, which was a great combination with Jack Ma’s recent friendly discord with Xi Jinping. The Chinese titan posted a sharp profit hike in the December quarter amid strength in its Cloud Intelligence unit and e-commerce segment. The beat was driven by its core Taobao and Tmall business as well as its closely watched AI division – this market was expecting a good result, and it wasn’t disappointed:
- Total Taobao and Tmall Group revenue 136.09 billion yuan, +5.4% YoY, beating estimates of 131.73 billion yuan.
- Total Alibaba International Digital Commerce Group revenue was 37.76 billion, +32% YoY, ahead of 36.16 billion estimates.
- BABA’s Cloud Intelligence Group posted year-on-year sales growth of 13% to 31.742 billion yuan in the three months to the end of December.
- Adjusted EBITDA 62.05 billion yuan, +4.2% YoY, beating 60.42 billion estimates.
- BABA’s net profit of 48.945 billion yuan ($6.72 billion) in the quarter ended Dec. 31, beating expectations and the 14.433 billion yuan reported in the same period last year.
The accompanying commentary was also positive: “This quarter’s results demonstrated substantial progress in our ‘user first, AI-driven’ strategies and the re-accelerated growth of our core businesses,” said Alibaba CEO Eddie Wu. The stock has surged in recent weeks following improving sentiment towards the Chinese tech sector and the announcement of the Chinese company’s partnership with Apple to roll out AI features for iPhones sold in China with this result adding to the bullish backdrop.
- We remain optimistic about BABA moving through 2025 and hold it in the International Equities Portfolio.
MM remains long & bullish BABA
Add To Hit List
