Alibaba CEO Eddie Wu Says Company Is In A ‘Superior Position’ For AI Boom As Q1 Cloud Revenue Surges 45%

Q1 revenue grew 9% to $39.64 billion, but was below Wall Street’s estimate of $39.89 billion, according to Koyfin data.

• Revenue from AI Cloud and Compute Services climbed 45% to about $7.21 billion.
• AI-related product revenue grew triple digits for the 12th straight quarter.
• Capital expenditures jumped 75% to roughly $10.07 billion during the quarter.

Alibaba Group (BABA) was in the spotlight on Thursday after the Chinese technology behemoth reported its first-quarter results, with sharp growth seen across its Cloud and AI-related product revenue.

“With our full‑stack AI strategy, we have put Alibaba in a superior position to capture the substantial growth of demand for artificial intelligence and AI compute,” Eddie Wu, CEO of Alibaba Group.BABA stock edged 0.9% lower at the time of writing.

Q1 Revenue, Earnings Miss Estimates

Q1 revenue rose 9% to $39.64 billion, driven by stronger demand for artificial intelligence services and cloud growth. However, the figure came in slightly below Wall Street’s estimate of $39.89 billion, according to Koyfin data.

Diluted earnings fell 42% to $1.26 per American depositary receipt, also missing analysts’ expectations of $1.60. Alibaba’s profitability remained under pressure as it continued to spend heavily on AI infrastructure, cloud capacity, and its quick-commerce business.

Capital expenditures jumped 75% to roughly $10.07 billion during the quarter.

AI Demand Supercharges Cloud Growth

Revenue from AI Cloud and Compute Services climbed 45% to about $7.21 billion, driven by public cloud demand and growing adoption of AI-related products. Its AI-related product revenue grew triple digits for the 12th straight quarter, as businesses increasingly used its computing infrastructure and Qwen AI models, the company said.

Revenue from Alibaba’s China e-commerce business fell 8% to $16.35 billion, while international e-commerce revenue slipped 1% to $4.09 billion during the quarter.

Alibaba previously said it expects AI-related products to account for more than half of external cloud revenue and is targeting more than $100 billion in combined AI and cloud revenue over the next five years.

Retail Sees Rally Post $130

Retail sentiment surrounding BABA on Stocktwits turned ‘extremely bullish’ from ‘bullish’ a day earlier, amid ‘high’ message volumes. It was among the top trending tickers on the platform at the time of writing.

One user said the market is “sleeping on Alibaba cloud.”

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Another user said if the stock breaks its $130 resistance, it will rally. It is currently trading at just over $125.

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BABA shares are down nearly 18% so far in 2026.

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