Alibaba surprises with an impressive profit surge in the third fiscal quarter

The Chinese e-commerce giant Alibaba recorded an unexpectedly high profit in the third fiscal quarter, significantly exceeding analysts' expectations. Despite intense competition in the domestic market and a cooling Chinese economy, the company managed to reignite its growth.

Financial Highlights

In the quarter ending December, net profit rose to nearly 49 billion yuan (approximately 6.4 billion euros), compared to 14.4 billion yuan in the same period last year. Analysts had expected 36.3 billion yuan on average. Revenue increased by 7.6% to 280 billion yuan, roughly in line with expectations.

Drivers of Growth

A key factor behind this success was the strong growth in artificial intelligence (AI) and cloud computing. Alibaba’s cloud division recorded a 13% revenue increase, significantly surpassing the expected 9.8%. CEO Eddie Wu highlighted the company’s progress in its AI strategy and announced plans to aggressively invest in AI infrastructure, including foundational models, over the next three years.

Strategic Partnerships and Innovations

Alibaba has made significant progress in integrating AI technologies. A notable development is its partnership with Apple to introduce AI features in iPhones sold in China. Additionally, the company launched its AI model "Qwen 2.5" in January, which outperforms local competitors in benchmarks.

Market Reaction and Stock Performance

The positive quarterly results led to a more than 12% increase in Alibaba's stock price. Since the beginning of the year, the stock has gained 60%, reaching its highest level since November 2021. Analysts rate the stock with a strong composite rating of 95.

Outlook and Future Investments

Alibaba plans to increase its investments in AI and cloud computing over the coming years to further strengthen its position in these promising sectors. These strategic investments are intended to enable the company to offer innovative solutions and remain competitive.

Opportunities and Benefits of Investing in BRICS Countries

The BRICS countries (Brazil, Russia, India, China, and South Africa) offer attractive opportunities for investors. These emerging economies are characterized by dynamic growth and increasing integration into the global economy. Investments in companies like Alibaba provide access to expanding markets and innovative technologies. Additionally, BRICS countries offer diversification benefits for investors looking to spread their portfolio across different regions and industries.

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