Alibaba Group Holding Ltd - ADR

Strong Revenue Growth: Alibaba reported a consolidated revenue of RMB 280.2 billion for the December quarter 2024, marking an 8% year-over-year increase. The revenue growth of the cloud services division accelerated to 13%, while AI-related product revenue maintained triple-digit growth for the sixth consecutive quarter. This reflects increasing customer demand, especially for AI products which are expected to continue this positive momentum.

AI Investment Strategy: Alibaba plans to invest more in AI and cloud infrastructure over the next three years than it has in the past decade, positioning itself for significant growth in AI capabilities. This includes enhanced R&D into AI foundation models and the deep integration of AI across its core e-commerce and cloud services. This aggressive investment underscores the expectation that AI technologies will drive future business transformation and revenue generation.

E-commerce Performance: The e-commerce segment (Taobao and Tmall) showed solid results with a revenue increase of 5%, while customized management revenue (CMR) grew by 9% year-over-year. The number of 88VIP members, a crucial consumer group, increased to 49 million. This segment remains in the investment phase focused on user growth and experience, despite rising operational costs.