It’s been a while since we’ve heard much from Jack Ma’s company… the man practically disappeared like he was in witness protection after clashing with Beijing a few years back (note to self: if you ever go to China, don’t do anything but kiss the ring). But Alibaba is finally making noise again, and Wall Street rewarded the move with a 13% jump in the stock.

(Source: CNBC)

So what exactly lit the fire under Alibaba’s stock after what feels like years of irrelevance? Simple. They announced plans to spend $53 billion on AI infrastructure over the next three years. That’s not a “we’re experimenting in AI” budget… that’s a “we’re trying to buy our way into relevance” kind of figure. Meaning, Alibaba isn’t dabbling in the space anymore… it’s making a full-on declaration that it wants to be viewed in the same AI conversation as Microsoft, Google, and Nvidia. And naturally, investors sent shares higher… proving once again that in 2025 you don’t need profits, you just need to say “AI” louder than the next guy.

That said, the numbers were anything but “clear as mud.” Revenue landed at $34.6 billion, which was technically up 2% year-over-year but still missed what analysts were hoping for. Net income looked like a blowout at +78%, but here’s the catch… once you peel back the accounting gymnastics and one-time gains from asset sales, profits actually would have been down 18%. In other words, the headline number screamed “comeback,” but the fine print whispered “not so fast.”

The real MVP of Alibaba’s quarter wasn’t e-commerce… it was cloud computing. For starters, cloud revenue jumped 26% year-over-year, which marked a noticeable acceleration from the 18% growth we saw last quarter. That’s important because it shows momentum is building in a segment investors have been waiting on for years to finally scale. Meaning, the narrative is shifting away from Alibaba being just an online mall and toward it being a legitimate infrastructure play in the AI era.

AI-related revenue continues to post triple-digit growth, which tells us that demand for training models and running inference in China is exploding. And to top it off, reports suggest Alibaba has developed a new AI chip that leapfrogs its old versions. That matters because Washington’s export bans have choked off China’s access to Nvidia’s addicting GPUs, forcing domestic players to build their own hardware. With this move, Alibaba is signaling that it doesn’t need to wait on U.S. supply… it’s building the stack itself. (If you listened closely, you could probably hear a few Nvidia investors nervously adjusting their leather gaming chairs at that news.)

CEO Eddie Wu might as well have told investors, “We’re not here to play one-on-one, we’re here to run the whole tournament.” The point was clear: Alibaba’s cloud division is no longer a side hustle, it’s the centerpiece of the strategy… the same way Microsoft reshaped its entire narrative around OpenAI. Eddie’s pitch is forget waiting on U.S. chips that Washington keeps blocking… China’s gonna make its own toys.  And judging by the price action, investors are buying that narrative. BABA shares are already up about 40% this year. Meanwhile, Nvidia and AMD slipped on Friday as traders were reminded that Beijing isn’t just going to sit back and let Jensen Huang run the global AI show uncontested.

That doesn’t mean Alibaba’s traditional business can be ignored. Its e-commerce machine is still alive, though definitely messy. Customer management revenue (the ad fees merchants pay to get placement) rose 10%. But adjusted earnings dropped 21% because Alibaba is burning cash in the “instant commerce” wars, the one-hour delivery game where margins go to die.

So here’s the balancing act: Alibaba has to prove it can simultaneously fight a billion-dollar AI arms race, survive a brutal e-commerce battle, and operate under a government that has a habit of suddenly changing the rules of the game… all without buckling under the pressure. So far, the results aren’t bad. Cloud growth is accelerating, international e-commerce (think AliExpress) climbed 19%, and AI revenue has now delivered eight straight quarters of triple-digit growth.

(Source: MSN)

Alibaba’s stock ripped because the story checks all the boxes investors want in 2025… AI sizzle with a new chip and big spending plans, a profit surprise (thanks in part to investment gains), and e-commerce that’s holding its own even as competition heats up. But let’s not give them the trophy just yet. U.S. export bans on chips aren’t going anywhere, competition in China is vicious, and their revenue still missed expectations.

So essentially, Alibaba is trying to be Amazon, Microsoft, and DoorDash all rolled into one. Brilliant if it works, catastrophic if it doesn’t. For now, investors don’t seem to care. They see a Chinese giant that’s back in the game, armed with new chips, a growing cloud business, and the willingness to spend whatever it takes. And in this market, that’s enough to send the stock higher.

At the time this article was published Stocks.News holds positions in Amazon, Google, and Microsoft as mentioned in the article.