Alibaba Group Holding shares climbed on Thursday after the company reported quarterly earnings that exceeded market expectations and provided an upbeat outlook for its core e-commerce operations.
The Hangzhou-based firm posted adjusted net income of $3.8 billion for the quarter ended March 31, up 12% year-over-year and surpassing analyst forecasts. Revenue rose 7% to $30.7 billion, driven by a 6% increase in China commerce revenue.
Alibaba’s cloud computing segment also showed signs of stabilization, with revenue growing 3% to $3.6 billion. The company highlighted improving user engagement and monetization in its domestic e-commerce platforms as key drivers of the performance.
Management guided for continued recovery in the current quarter, citing seasonal tailwinds and cost efficiencies. The outlook, combined with the earnings beat, fueled investor optimism about Alibaba’s ability to navigate regulatory headwinds and macroeconomic pressures in China.
Shares of Alibaba rose 4.5% in pre-market trading following the release, extending gains from Wednesday’s 3% advance after the company’s earnings preview. The stock has gained roughly 15% over the past month, outperforming broader Chinese equity benchmarks.
Analysts at Citi maintained a neutral rating but raised their price target to $110 from $95, citing "early signs of stabilization" in the business. Morgan Stanley similarly upgraded its rating to overweight, citing improving fundamentals in Alibaba’s core segments.
The company’s stock performance reflects broader investor sentiment toward Chinese tech firms, which have faced regulatory scrutiny and economic uncertainty in recent years. Alibaba’s ability to deliver consistent earnings growth and articulate a clear path to profitability has been a key focus for shareholders.
