Alibaba Profit Falls 66.3 Percent Amid Weak Consumer Demand
Alibaba reported a 66.3 percent drop in net income as heavy spending failed to spur demand. While cloud revenue grew, weak consumer sentiment hit earnings.
Alibaba Group Holding Limited reported on Thursday a 1.7% increase in third-quarter revenue, while net income dropped by 66.3%. Both figures fell short of market expectations as heavy spending on rapid delivery services and aggressive promotions failed to significantly boost consumer demand in China. Following the report, United States-listed shares of the e-commerce leader declined nearly 4% in premarket trading.
The company booked revenue of 284.84 billion yuan ($41.28 billion) for the quarter ending in December, missing the 3.7% growth projected by LSEG analysts. Despite the overall shortfall, cloud revenue exceeded expectations with a 36% increase. This growth was supported by the introduction of numerous AI agent integrations for consumer-facing operations and expanded infrastructure investments.
