Categories Analysis, Retail, Technology
Alibaba (BABA) gains on the back of strong Q3 2025 results and AI-driven cloud growth
AI-related product revenue grew triple-digits YoY in Q3
Shares of Alibaba Group Holding Limited (NYSE: BABA) rose 6% on Thursday after the company delivered strong results for the third quarter of 2025. Revenue and earnings grew on a year-over-year basis and surpassed expectations. The company saw growth in the ecommerce and cloud businesses and expects further momentum in cloud, driven by artificial intelligence (AI).
Q3 numbers
In the third quarter of 2025, Alibaba’s revenue increased 8% to $38.38 billion compared to the year-ago period. Adjusted earnings per ADS grew 13% YoY to $2.93. Both the top and bottom line numbers came ahead of projections.
Cloud and AI momentum
Alibaba’s Q3 results significantly benefited from growth in its cloud division. Revenue from Cloud Intelligence Group increased 13% YoY to $4.35 billion. Revenue excluding Alibaba-consolidated subsidiaries grew 11%, driven mainly by double-digit growth in revenue from public cloud products, including AI-related products. Meanwhile, AI-related product revenue grew triple-digits YoY for the sixth consecutive quarter.
Alibaba expects revenue growth at its cloud division to continue to gain pace driven by AI. The company plans to continue investing in AI infrastructure to increase cloud adoption for AI and maintain its leading position in the market.
Ecommerce growth
In Q3, revenue from the China commerce retail business increased 5% YoY to $17.7 billion. Customer management revenue grew 9%, driven by growth in online gross merchandise volume and an improvement in take rate. Direct sales and others revenue fell 9% due to a planned reduction in certain direct sales businesses.
Revenue from the China commerce wholesale business rose 24% YoY to $901 million, driven by an increase in revenue from value-added services provided to paying members.
During the quarter, revenue from the international commerce retail business increased 36% YoY to $4.3 billion, helped by a rise in revenue from AliExpress and Trendyol. Revenue from the international commerce wholesale business grew 18% to $850 million, driven by an increase in revenue generated by cross-border related value-added services.
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