- Cloud revenue surges 36%, with AI-related products seeing tenth consecutive quarter of triple-digit growth
- Company’s AI expansion accelerates with new products and increased cloud commercialization
Alibaba Group posted solid fiscal third-quarter 2026 earnings, with revenue growing 9% year-on-year to 284.84 billion yuan ($41.27 billion), excluding income from its divested retail businesses.
In the quarter ended December 31, 2025, the company’s cloud services were a key driver, with revenue rising 36% from a year earlier.
Meanwhile, AI products continued their robust performance, posting triple-digit growth for the tenth consecutive quarter, the financial statement shows.
“In this quarter, we continued to invest heavily in AI and consumption, two core business areas,” CEO Eddie Wu Yongming said during the earnings call. “AI remains one of our primary growth engines, with cloud revenue up 36% and AI-related products showing triple-digit growth for ten consecutive quarters.”
Alibaba’s AI division made notable strides, with its consumer-facing product, Qwen, surpassing 300 million monthly active users.
The company also unveiled its enterprise AI platform, Wukong, which entered public beta as the first AI-native work platform tailored for businesses.
These developments highlight the company’s comprehensive AI stack, setting the stage for future growth.
Cloud revenue growth was bolstered by a 35% increase in external commercial income, driven by ongoing innovations in Alibaba Cloud and the rising adoption of AI services.
Alibaba’s self-developed graphic processing unit (GPU), produced under its semiconductor subsidiary Pingtouge, made its debut in the financial report, supporting internal operations and offering commercial services to external clients.
The token mania
Additionally, Alibaba launched the Alibaba Token Hub to capitalize on the rapid expansion of AI agents, focusing on the creation, transmission, and application of tokens.
“With our full-stack AI capabilities — from large models to cloud and chips — integrated with Alibaba’s broader ecosystem, we’re well-positioned to advance both AI-to-Business and AI-to-Consumer initiatives,” Wu said.
Alibaba’s traditional e-commerce and retail business also pulled off a strong rebound, with instant retail revenue climbing 56% in the quarter.
The surge was driven by increased logistics efficiency, improved order structure, and strong customer retention, leading to better per-order economics.
In a March 12 note, Morgan Stanley identifies Alibaba as a “global AI winner” among Chinese tech giants, citing its comprehensive AI stack, which includes chips, cloud, models, and applications.
