By George Glover

Alibaba Group stock was rising Thursday as China's artificial-intelligence boom helped drive up quarterly revenue for the e-commerce company.

Alibaba American depositary receipts climbed 5.4% to $132.57 ahead of the U.S. open. Futures tracking the benchmark S&P 500 index were down 0.2%.

The ADRs were rising after Alibaba's earnings for the quarter ended Dec. 31 came in above Wall Street's expectations.

The online retailer reported an adjusted net profit of 51.07 billion yuan ($7.01 billion), up 6% from a year ago, on revenue of 280.15 billion yuan. Analysts were forecasting profit of 49.94 billion yuan ($6.86 billion) on revenue of 279.34 billion yuan, according to FactSet data.

Revenue for Alibaba's cloud-intelligence group rose to 31.74 billion yuan, a 13% climb from a year ago that outpaced analysts' expectations. Revenue for AI-related products jumped by triple digits for a sixth straight quarter.

It's a sign that Alibaba's AI investments are paying off, at a time when the rapid rise of start-up DeepSeek has kicked off a boom in spending on the tech in China. The company said last week that it would be partnering with Apple to support AI services for iPhones sold in China, reportedly beating rivals including search-engine provider Baidu and TikTok owner ByteDance to the deal.

This is breaking news. Read a preview of Alibaba's earnings below and check back for more analysis soon.

Alibaba Group is in a battle to win China's artificial-intelligence arms race -- and the online retailer's quarterly earnings should give investors a sense of how that is playing out.

The e-commerce company is set to post its results, covering the quarter ended Dec. 31, before the U.S. open Thursday. Analysts surveyed by FactSet are expecting its adjusted net profit to have climbed 4.2% from a year ago to 49.94 billion yuan ($6.86 billion), on revenue of 279.34 billion yuan.

The key focus for investors will be if rising revenue for Alibaba's cloud-computing division, which stands to benefit from the AI boom, can offset weakness in its traditional e-commerce business. Beijing has struggled to restart China's faltering economy over the past year, and sluggish consumer spending has weighed on the top line for the company, as well as rivals like JD.com and Temu owner PDD Holdings.

But investors have moved past that gloomy outlook over the first month-and-a-half of 2025, focusing instead on how the AI boom could boost Chinese stocks after local start-up DeepSeek's new model surged in popularity. Alibaba has been making some advances of its own: last week, the company's chairman Joe Tsai said it would be partnering up with Apple to support iPhone AI services, as the U.S. tech giant seeks to boost sales in one of its biggest markets.

Alibaba's Hong Kong shares hit a three-year high after that tie-up was announced. As of Wednesday the company's American depositary receipts were up 50% in 2025, compared with a 4% gain for the S&P 500 U.S. benchmark.

Write to George Glover at george.glover@dowjones.com

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February 20, 2025 06:24 ET (11:24 GMT)

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