Alibaba Rises 7% as AI Cloud Revenue Jumps 40%
Alibaba rose 7% in morning trading after its AI-related cloud revenue jumped 40% in the fourth quarter of fiscal 2026. The stock move came even as net income fell to 86 million yuan, a sharp drop from nearly 30 billion yuan a year earlier.
Alibaba reported $0.19 per share, far below the $0.84 analysts expected and down from $1.84 a year earlier. The mismatch shows investors were willing to look past the profit collapse because the cloud unit tied to AI kept expanding.
AI cloud growth drives Alibaba
40% AI-related cloud revenue growth gave Alibaba the clearest signal in the report. Management has already tied capital spending to that lane, laying out plans last year to invest $55.9 billion over three years to improve AI infrastructure and cloud computing capabilities.
86 million yuan in net income was the other side of the same report. Alibaba also posted its first operating loss since 2021, turning a revenue story into a margin problem for shareholders who still have to weigh scale against earnings power.
Amazon spending sets the comparison
34% was the stock gain Alibaba saw in the month when that $55.9 billion AI infrastructure plan was announced. Amazon, by contrast, spent $131.8 billion on AI infrastructure in 2025 and then said it planned to raise that outlay to $200 billion this year, a move that sent its stock down 12% in the announcement month.
7 gigawatts of computing capacity also sits in Amazon's pipeline through agreements with OpenAI and Anthropic, while Meta Platforms signed an agreement to deploy tens of millions of AWS Graviton cores. That comparison makes Alibaba's 7% trading gain easier to read: the market rewarded the AI cloud growth, even with earnings pressure still hanging over the results.
2021 was the last time Alibaba posted an operating loss before this quarter, and that return to red leaves the next read-through focused on whether AI-related cloud revenue can keep scaling fast enough to narrow the gap. For shareholders, the report shifts the question from whether Alibaba will spend on AI to whether that spending can turn into durable profit.
