Alibaba sees revenue hit by caution in cloud space

Following recent healthy cloud sector results from AWS, Google, and Microsoft , enter some tempered expectations as Alibaba Cloud has reportedly missed its own targets.

Per CNBC , the Chinese cloud storage provider continues to face local pressure from a rise in competition and an increasingly cautious local consumer base.

Though the company’s overall net income has dropped 29% year-on-year (YoY), maybe don’t feel too bad for them, as its overall US shares still saw a 2% rise in value, and it still made $3.4 billion in net income.

Alibaba’s tumultuous cloud growth

CNBC quoted a company spokesperson as claiming the somewhat dramatic fall in income was driven by “an increase in impairment” across its investments .

However, it shouldn’t be forgotten that Alibaba is currently caught in a pivot out of the Australian and Indian regional cloud markets . Time will only tell if Alibaba will be able to ride out this period of revenue shrinkage and was in fact right to retain in-house control of its cloud business and scrap a specific IPO listing for it, a decision that was up in the air as late as mid-November 2023.

For Alibaba’s Cloud Intelligence Group, quarterly revenue currently sits at having risen 6% YoY, a decrease of 3% compared to last November. Management sees artificial intelligence (AI) as a core driver of growth for that part of the business, with a spokesperson claiming that the company’s ““AI-related product revenue continued to grow at triple-digits year-over-year.”

Despite drops in revenue across the board and decreases in growth for cloud, Alibaba has somehow calculated its EBITA, a measure of profit calculating earnings before interest, taxes and amortization, as having risen 155% YoY.

More from TechRadar Pro

• Alibaba Cloud is slashing prices in China to help fuel AI push
• Alibaba unveils the network and datacenter design it uses for large language model training
• Alibaba now has a ChatGPT rival for its cloud customers to use