Alibaba’s December quarter revenue missed estimates as net income fell 66%

Chinese tech giant Alibaba On Thursday it reported net income fell 66% year-over-year, as it missed analysts’ revenue expectations.

Here’s how Alibaba performed for its fiscal quarter ending December 31, 2025:

• Revenue: 284.8 billion Chinese yuan ($41.4 billion), according to data compiled by LSEG, compared with the 290.7 billion Chinese yuan expected by analysts.
• Net income: 15.6 billion Chinese yuan compared to 46.4 billion Chinese yuan in the same period a year ago.

Alibaba’s US-listed shares fell 4% in premarket trading on Thursday.

The tech giant noted that the decrease in net income was primarily due to a 74% year-over-year decline in operating income, which was impacted by investments in accelerated commerce, user experiences and technology.

Alibaba is one of several Chinese AI firms rushing to catch up with US companies in the AI ​​race.

“This quarter, Alibaba made strong investments across our core pillars of AI and consumption,” Alibaba CEO Eddie Wu said in a statement.

“AI has been and will continue to be one of our primary growth engines. Our Cloud Intelligence Group’s revenue increased 36% with AI-related product revenue delivering triple-digit growth for the tenth consecutive quarter.”

Revenue from Alibaba’s cloud business was 43.3 billion Chinese yuan. “This momentum was primarily driven by public cloud revenue growth, including increasing adoption of AI-related products,” the company said.

It has pledged tens of billions of dollars in investments in AI and cloud infrastructure as it looks to transform from a mere e-commerce giant into an AI leader.

In January, the tech giant announced a new AI model series and is investing in ‘agentic commerce’ as it looks to transform chatbots into full-service shopping and payment tools.