Alibaba Reports Earnings Plunge
Alibaba Group Holding Ltd. (NYSE: BABA) experienced a significant downturn following its latest earnings report for the December 2025 quarter, with shares dropping 7%. The company reported a 66% year-over-year decline in earnings, despite a modest revenue increase of 2% year over year. Alibaba’s CEO, Eddie Wu, attributed the earnings drop to substantial investments in artificial intelligence (AI) infrastructure.
In the earnings call, Wu highlighted that Alibaba Cloud’s revenue surged 36% year over year and AI product revenue has seen triple-digit growth for the past ten quarters. The company aims to exceed $100 billion in combined external revenue from cloud and AI initiatives over the next five years, representing approximately 61% of its annualized revenue run rate.
