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Alibaba Posts Q2 Sales Beat but Profit Miss, Ramps Up AI–Cloud Spending on Soaring Demand

Management signals heavier investment despite a steep drop in operating cash flow.

Overview

  • Revenue reached RMB 247.8 billion, up 4.8% and above estimates, while adjusted net income fell to RMB 10.35 billion versus roughly RMB 16.8 billion expected.
  • Cloud Intelligence revenue rose 34% to RMB 39.82 billion as AI products logged a ninth consecutive quarter of triple‑digit growth.
  • The Qwen app surpassed 10 million downloads in its first week, with planned integration into e‑commerce, maps and local services.
  • Alibaba disclosed about RMB 120 billion in AI and cloud infrastructure capex over the past four quarters and said the three‑year RMB 380 billion plan could be increased.
  • Operating cash flow dropped 68% to RMB 10.10 billion due to instant retail expansion and cloud capex, while e‑commerce CMR grew 10% and instant retail revenue climbed 60% around Double 11.