Importance Score: 55 / 100 🔵
Alibaba’s Stock Dips Amid Cloud Profitability Concerns
Shares of the $295 billion e-commerce titan, Alibaba, experienced an 8% decline in New York trading following lackluster quarterly performance. A surprise contraction in the profitability of its cloud division is stoking apprehension among investors. Despite Alibaba’s notable progress in artificial intelligence (AI), its business strategies remain somewhat undefined amid intense market rivalry.
Financial Results Overview
On May 15, Alibaba declared revenue of 236.5 billion yuan ($32.8 billion) for the quarter concluding on March 31, representing a 7% surge compared to the previous year. Adjusted profits saw a 22% increase, reaching 29.8 billion yuan.
Cloud Computing Performance
The company’s cloud computing segment witnessed an 18% year-over-year revenue climb, totaling 30.1 billion yuan. Alibaba also noted that “AI-related product revenue sustained triple-digit year-over-year growth for the seventh consecutive quarter.”
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Market Reaction
Alibaba’s shares in New York ended the trading day on May 15 down 7.6%, settling at $123.90.