By RYAN DEFFENBAUGH

Alibaba Group (BABA) stock jumped Tuesday after the China tech giant reported stronger-than-expected revenue while earnings decreased. An acceleration in Alibaba's cloud growth pointed to its AI momentum.

Alibaba said that it earned an adjusted 4.36 yuan per American depositary share for the September-ended quarter. That's down down 71% from the same period a year earlier and below the 6.03 yuan per ADS that analysts polled by FactSet were forecasting. Sales increased 5% to 247.8 billion yuan, or $34.9 billion, compared to analyst estimates of 243.8 billion yuan.

Alibaba's cloud business grew sales 34% year-over-year to 39.82 billion yuan, or $5.6 billion. That was ahead of the 27.8% growth Wall Street analysts were forecasting. Cloud growth has accelerated this year from 26% in the company's June quarter and 17% in Alibaba's March quarter.

"AI-related product revenue continued to show strong momentum, delivering another quarter of triple-digit year-over-year growth," Alibaba said in a news release. "We are seeing accelerated adoption of our AI products across a broad range of enterprise customers, with a growing focus on value-added applications including coding assistants."

Meanwhile, Alibaba has also been investing in growing its "quick commerce" local delivery business against fellow China tech giants JD.com (JD) and Meituan. Investments in discounts and other growth initiatives has weighed on earnings for Alibaba.

"Quick commerce continued to scale with significant improvement in unit economics and drove rapid growth in monthly active consumers on the Taobao app," Alibaba Group Chief Executive Eddie Wu said in the news release.

Alibaba Stock Jumps

On the stock market today, U.S.-listed Alibaba stock is ahead more than 4% at 167.62 in recent premarket trades. Shares are primed to jump back above Alibaba's 21-day moving average, with its 50-day line sitting slightly higher.

A strong move above the 50-day line could cross a trendline, offering an early entry in what appears to be an emerging double-bottom base.

Alibaba stock rallied 5.1% on Monday after the company said its Qwen AI chatbot exceeded 10 million downloads in its first week. Alibaba is the top cloud-provider in China and is working to establish is Qwen large language models as a global leader. The company said in February that it will spend roughly $53 billion over three years to develop AI infrastructure. By September, Chief Executive Eddie Wu said the company would exceed that total because demand exceeded expectations.

Alibaba stock has rallied nearly 90% year-to-date, though its remains below a 52-week high of 192.67 in early October.

Meanwhile, Alibaba stock has an IBD Composite Rating of 84 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one.

YOU MAY ALSO LIKE:

Oracle Stock Dives Below Key Level As AI Fears Fuel Sell-Off

When To Sell Growth Stocks: This Could Be Your No. 1 Rule

Get Timely Buy & Sell Alerts With IBD Leaderboard

IBD Live: Learn And Analyze Growth Stocks With The Pros

This article was first published on Investor's Business Daily