Alibaba Stock Soars as Cloud Revenue Becomes a Heavyweight Growth Engine
Alibaba Group Holding Limited is experiencing a dramatic shift in its investor narrative, moving from a company grappling with fierce e-commerce competition to a powerhouse in the global artificial intelligence race. The latest proof came with the company’s recent earnings report, which saw the stock surge on the back of an accelerating cloud computing business. For shareholders, this wasn’t just a win; it was confirmation that the company’s massive, multi-billion-dollar pivot toward AI is starting to pay off.
The core catalyst for the stock jump, which saw shares climb by as much as 13% in Hong Kong and 5% in the US market, was a remarkable jump in the performance of its Cloud Intelligence Group. Revenue for the cloud division soared 34% year over year in the quarter ending September 2025, a significant acceleration from the 26% growth rate reported just a quarter earlier. This renewed momentum suggests that Alibaba is not only holding its ground but is actively gaining traction in the hyper-competitive cloud arena.
The driving force behind the acceleration can be summed up in two letters: AI. The company’s investments in artificial intelligence have begun generating meaningful returns, with revenue from AI-related cloud products posting triple-digit growth for the ninth consecutive quarter. This success is particularly critical as CEO Eddie Wu has explicitly named “AI plus Cloud” as one of the group’s two primary growth engines, signaling a future less dependent on its legacy e-commerce platform.
While Alibaba’s cloud division still holds a 4% share of the worldwide cloud infrastructure market compared to giants like Amazon Web Services at 29% and Microsoft Azure at 20%, its current growth rate of 34% matches global hyperscalers like Google Cloud and is considerably higher than AWS’s 20% growth for the same period. This places Alibaba in an elite tier of high-growth cloud providers, a position bolstered by its dominance in its home region as the largest player in China’s AI cloud market.
It is worth noting that the good news in cloud revenue came with a caveat. Alibaba’s strategic spending on AI infrastructure and its aggressive expansion into the “quick commerce” business have squeezed profitability in the short term, leading to a significant drop in overall net profit. However, investors appeared willing to overlook the short-term margin pressure, instead focusing on the clear and accelerating growth in the company’s future-facing segment. The stock has already delivered a total return of nearly 100% this year, and with analysts continuing to raise their price targets, the AI-driven cloud business is clearly viewed as the foundation for Alibaba’s next chapter of growth.
