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On August 28, 2024, the office building of Alibaba in Nancin, Jiangsu province, China, August 28, 2024.
Cfoto | Future Edition Gets the image
Alibaba In the June quarter, more than expected in June, which is fueled by accelerated sales in its cloud computing, and the further revival of its e -commerce business.
However, the Chinese giant’s revenues came under analysts’ forecasts. Alibaba’s stocks rose 12.9% in the US after initially dropped.
Here’s how Alibaba did in its financial first quarter that ended in June compared to LSEG’s estimates:
- Profit: 247.65 billion Chinese yuan ($ 34.6 billion) against 252.9 billion yuan.
- Net income: 43.11 billion yuan compared to 28.5 billion yuan.
Revenue increased by 2% compared to last year, and the company’s net income increased by 78%. Alibaba has attributed an increase in profits in some of its investments in stock and disposing of Turkish e -commerce Trendyol. This was offset by revenue revenue from operations.
However, with the exception of income from investment, the net income of Alibaba would decrease by 18% compared to last year as it continues to invest in a cut commercial space in China.
Alibaba carries out a delicate act of balancing between investment areas such as artificial intelligence and new e -commerce models, showing that it can continue to grow in the competitive market of China. So far, investors have awarded Alibaba for 40% of the stock listed this year.
This is partly due to the constant acceleration of growth in its key cloud computing, as well as improvements in both China and International E -Commerce.
The cloud is accelerated
Cloud calculations were one of the bright spots.
Alibaba said the Division’s profits amounted to 33.4 billion yuan, which is 26% compared to last year. It was faster than the 18%growth rate, which is observed in the previous quarter. Alibaba cloud block is seen as a key to a company that monetizes artificial intelligence, like Microsoft or Google.
“AI managed reliable demand, Cloud Intelligence Group has experienced accelerated revenue growth, and the profit from AI products is now a considerable part of the income from external customers,” Alibaba CEO Eddie Wu said in a statement.
Investors are focused on Alibaba’s investment in artificial intelligence where it has become a major global player. The company has aggressively launched different AI models And selling services through its cloud computing.
While Alibaba focused AI with open source – that is, its models can be used free of charge and built on developers – it also sells AI through its cloud block.
Alibaba said the income from AI products “supported the triple growth for the year in the eighth in a row.”
Adjustable profits before interest, taxes and cushioning (EBITA), a profitability indicator, jumped 26% compared to the year in the cloud block.
Alibaba is developing a new chip II It looks like to rely on growth in its cloud division, CNBC reports on Friday. The news about the chip, for the first time reported The Wall Street Journal, was also a driver for Alibaba’s shares on Friday.
On Friday, Alibaba’s management said the company’s goal is to maintain the cloud growth rate above the average market rather than raise gross profitability in the near future.
“Fast Commerce” War
The main business e -commerce business, which is more than 50% of the profit, had ambiguous results.
Overall, the profit increased by 10% compared to last year to 19.6 billion yuan. Customer management profits, which Alibaba makes from the sale of marketing and other services to the merchants on its platform, jumped by 10%. CMR makes up the bulk of e -commerce revenue.
However, the adjusted profit in the division decreased by 21% annually. All because Alibaba is investing in the so -called fast or instant commerce. This feature presented in Taobao, one of the main Chinese applications for Alibaba e -commerce that provides delivery of certain products in China for an hour
In China, the competition is intense, including giant food delivery meituan and jd.com. And rivalry already took its value to some of these firms, with Meituan this week arrangement 89% plunged in the second quarter, adjusted by net income.
Alibaba’s own rapid trade department has brought more than 14.8 billion yuan, or $ 2 billion, increasing by 12% compared to last year. According to the call call on Friday, Alibaba’s leadership said instant commerce would add 1 trillion yuan to annual additional gross goods (GMV) over the next three years. GMV is the amount of money made on Alibaba platforms but does not turn into direct income.
However, investors look normally with the Alibaba’s instant trading because its cloud computing continues to rise, while its international internet trading block – which includes Aliexpress – that the loss has narrowed 19%when losses.
