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Alibaba said it is working on a rival to ChatGPT, an artificial intelligence chatbot that has sparked excitement around the world. Alibaba said its products are currently undergoing internal testing.
Quang Da | Visual China Group | Getty Images
shares of alibaba Sales fell after major Chinese companies’ fourth-quarter fiscal net profits plunged.
Alibaba’s March quarter earnings and LSEG consensus forecasts are as follows:
- Sales: 221.9 billion yuan ($30.7 billion) versus the expected 219.66 billion yuan.
Net profit attributable to common shareholders was 3.3 billion yuan, down 86% year-on-year.
Alibaba stock fell about 5% in U.S. pre-market trading on Tuesday.
Alibaba implemented its largest-ever corporate structural reform in 2023, leading to a year full of ups and downs. The company has also made some other high-profile management changes, with company veteran Eddie Wu taking over as CEO in September.
In a show of confidence to shareholders, the Chinese tech giant announced earlier this year that it would increase its share buyback program by $25 billion until the end of March 2027.
Alibaba has been engaging in cautious consumer spending in China, but its core e-commerce business showed some signs of recovery in the March quarter.
The Hangzhou-based company has stepped up its overseas expansion amid the domestic economic downturn, and Alibaba faces increasing competition from low-cost companies like PDD.
Sales at Taobao/Tmall, which handles Alibaba’s e-commerce business in China, increased 4% year-on-year to 93.2 billion yuan. This was higher than the 2% growth in the previous quarter.
Customer management revenue – the revenue Alibaba makes from marketing and other services it sells to merchants on Taobao and Tmall e-commerce platforms – was flat last quarter, but rose 5% year over year. Alibaba’s international trading business also saw sales increase 45% year-on-year to 27.4 billion yuan.
Earlier this year, CEO Wu vowed to “rekindle” the e-commerce company’s growth with further investment. There appear to be early signs of that taking hold in the March quarter.
“This quarter’s results demonstrate that our strategy is working and that we are returning to growth,” Wu said on the earnings call.
The decline in profits has cast a long shadow on profits. Regarding the reason for the decline, Alibaba said, “The main reason for the decline was that in the same quarter last year, we had a net profit due to changes in market valuation, but in the same quarter, we incurred a net loss on investments in listed companies.”
Alibaba touts AI growth
Investors are keeping an eye on Alibaba’s cloud computing unit, which has struggled to reignite growth. The company had planned to spin off its cloud division into a separate company, but It scrapped plans for an initial public offering last year.
Alibaba announced that its cloud computing division’s revenue was 25.6 billion yuan, an increase of only 3% year-on-year and the same growth rate as the previous quarter.
The Chinese giant said it was cutting back on “low-margin project-based” contracts in its cloud division, adding that artificial intelligence-related products and public cloud related to enterprise customers “offset the impact of the recession.” He said he was hopeful. Excluded from project-based revenue. ”
During the March quarter, AI-related revenues recorded “triple-digit year-over-year growth.”
“AI-related revenue was generated from a variety of sectors, including basic model companies and internet companies, as well as customers in industries such as financial services and automotive,” Alibaba said.