MW Alibaba's stock rallies after profit beat expectation as AI business sees rapid growth

The U.S.-listed shares of Alibaba Group Holding Ltd. $(BABA)$ rallied 3.4% in premarket trading Friday, after the China-based e-commerce giant reported fiscal second-quarter profit that beat expectations, as the AI business continued to see rapid growth, to offset a revenue miss. Net income rose to 43.55 billion renminbi ($6.21 billion), or RMB18.17 per American depositary share, from RMB29.7 billion, or RMB10.77 per ADS, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per ADS fell to RMB15.06 from RMB15.63 but beat the FactSet consensus of RMB14.82. Revenue grew 5.2% to RMB236.50 billion ($33.70 billion), but came up short of the FactSet consensus of RMB239.45 billion. Revenue from the company's Taobao and Tmall e-commerce businesses increased 1.4% to RMB98.99 billion but was below the FactSet consensus of RMB104.34 billion. The company's cloud intelligence group saw revenue rise 7.1% to RMB29.61 billion to top the FactSet consensus of RMB29.52 billion. The company said artificial-intelligence related revenue grew at a triple-digit percentage rate for a fifth consecutive quarter. The stock has gained 16.9% year to date through Thursday, while the iShares MSCI China ETF $(MCHI)$ has advanced 16.2% and the S&P 500 index has rallied 24.7%.

-Tomi Kilgore

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November 15, 2024 06:57 ET (11:57 GMT)

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