By Vahid Karaahmetovic

Investing.com -- Alibaba shares dipped around 4% in U.S. premarket trading Thursday after the Chinese e-commerce and cloud giant reported second-quarter earnings well below analyst expectations.

The company reported second-quarter earnings per share of RMB8.52, missing the analyst estimate of RMB10.72. Revenue for the quarter increased by 9% year-over-year to RMB268.95 billion, just ahead of the RMB268.34 billion consensus estimate.

Revenue from AI Cloud and Compute Services reached RMB48.4 billion, with year-over-year growth accelerating to 45%, driven by rising adoption of AI-related products. AI-related product revenue rose to RMB12.4 billion, marking a twelfth consecutive quarter of triple-digit year-over-year growth.

"We delivered a strong quarter, driven by the improving commercialization of our full‑stack AI capabilities," said Eddie Wu, CEO of Alibaba Group. "Alibaba Cloud's external revenue growth accelerated to 45%, with AI-related product revenue delivering triple-digit growth for the twelfth consecutive quarter.

"Cloud segment revenue growth continued to accelerate, with quality earnings and operating leverage increasing EBITA margin to 12%," said Toby Xu, chief financial officer at Alibaba.

Within China-ecommerce, customer management revenue fell 7% year-over-year to RMB89.12 billion. On a like-for-like basis, excluding the contra revenue impact from a new business development program, it would have grown 1%.

• 

  Predict and win massively with the world largest prediction markets.

  
  
  Polymarket Ad

Total Alibaba Group e-commerce revenue rose 4% to RMB205.9 billion.

Adjusted EBITA fell 30% year-over-year to RMB27.3 billion, with the adjusted EBITA margin shrinking to 10% from 16%. The company attributed the decline primarily to increased investment in technology, partly offset by improved operating results in its cloud business and enhanced operating efficiency across other segments.

Related articles

Alibaba stock dips as Q2 profit misses estimates despite strong AI cloud growth

Wolfe Research outlines eight risks that could spark stock declines in 2026