Alibaba revenue misses estimates in December quarter as net income drops 66%

In this articleChinese tech giant Alibaba on Thursday reported net income had dropped 66% year-over-year, as it missed analyst revenue expectations.Here's how Alibaba performed its fiscal quarter, ending Dec. 31, 2025:Alibaba's U.S.-listed shares dropped 5% in premarket trading on Thursday. The tech giant noted that the net income decrease was primarily due to the 74% year-on-year drop in operational income which was impacted by investments in quick commerce, user experiences and technology.The results were "softer" than expected and below expectations on revenues, adjusted net profit, and adjusted operational income, Citi analysts said in a note. The slight acceleration in cloud revenue growth, which sat at 36% year-on-year, was a "positive note" coming in 1% above its consensus, but market expectations were higher, they said.Alibaba is one of several Chinese AI firms that have been rushing to catch up to U.S. companies in the AI race. "This quarter, Alibaba maintained strong investments across our core pillars of AI and consumption," Alibaba CEO Eddie Wu, said in a statement. "AI is and will continue to be one of our primary growth engines.

Our Cloud Intelligence Group's revenue is up 36% with AI-related product revenue delivering triple-digit growth for the tenth consecutive quarter."Revenue from Alibaba's cloud business was 43.3 billion Chinese yuan. "This momentum was primarily driven by public cloud revenue growth, including the increasing adoption of AI-related products," the company said.It's pledged tens of billions of dollars in investments in AI and cloud infrastructure, as it looks to transition from being just an e-commerce giant to an AI leader. In January, the tech giant announced a new AI model series, and has also been investing in 'agentic commerce' as it looks to turn chatbots into full-service shopping and payment tools. Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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