Alibaba shares fell as much as 5% in U.S. premarket trading Thursday after the Chinese e-commerce giant reported fiscal fourth-quarter earnings that missed analyst expectations on both revenue and net income. The company cited ongoing macroeconomic challenges and intensified domestic competition as key headwinds.
For the quarter ended March 31, Alibaba posted revenue of 236.5 billion yuan ($32.6 billion), narrowly missing LSEG's estimate of 237.2 billion yuan. Net income came in at 12.4 billion yuan, roughly half of the 24.7 billion yuan expected by analysts.
While revenue rose 7% year-on-year, net income surged 279% off a low base. The company attributed the improvement to gains from operations and valuation changes in equity investments, offset by losses related to the disposal of certain subsidiaries.
CEO Eddie Wu emphasized the firm's focus on technology-led growth in Thursday's earnings release. AI-related product revenue achieved "triple-digit growth for the seventh consecutive quarter," Wu stated, though Alibaba did not disclose specific revenue figures tied to AI initiatives.
Revenue from Alibaba's core Taobao and Tmall Group segment, which comprises its China e-commerce business, increased 9% to 101.4 billion yuan. The segment benefited from a 12% rise in customer management revenue, driven by marketing and service sales to platform merchants.
Despite that growth, Alibaba continues to face mounting pressure from rivals such as JD.com and PDD Holdings' Pinduoduo. JD.com earlier this week reported stronger-than-expected first-quarter revenue, fueled by rising user engagement. All major Chinese e-commerce platforms are currently locked in a price war amid weakening consumer sentiment and sluggish domestic demand.
Chinese consumers remain cautious, impacted by a prolonged property crisis and economic uncertainty. To combat spending fatigue, Alibaba has expanded partnerships and offered deeper discounts. A new integration allows Taobao product links to be embedded within Xiaohongshu (Rednote) posts, encouraging direct purchases from social content.
Alibaba's Cloud Intelligence Unit posted revenue of 30.13 billion yuan, up 18% year-on-year, led by faster growth in public cloud adoption and AI-related services. The division also supports Alibaba's in-house AI platform, Quark, powered by its latest open-source large language model Qwen 3, launched in April.
