Archive · 8 Oct 2026
Alibaba’s AI Cloud Growth Accelerates as Investment Begins Paying Off
Alibaba has been spending a lot of money to build its artificial intelligence business.
Analysts think its AI cloud revenue will grow by more than 50% in the September quarter.
They also expect the cloud business to earn a bigger profit margin.
In the previous quarter, it brought in 48.4 billion yuan.
Alibaba is building new AI technology and expanding its data centres.
The company has also said it wants to use AI across its business.
But its online shopping business faces strong competition, and its quick-commerce unit is still expected to lose money.
Analysts think cloud profits could eventually help cover losses in another AI division.
Analysts expect Alibaba’s AI cloud revenue to grow more than 50% in the September quarter, up from 45% growth in the previous quarter.
Jefferies forecasts a 12.3% profit margin for the unit, while Longbridge Securities expects an EBITA margin of about 15%, compared with 12% in June.
Alibaba’s AI cloud business generated 48.4 billion yuan in June-quarter revenue, its fastest growth rate in 22 quarters.
Alibaba is expanding AI infrastructure, including unveiling the Zhenwu V900 processor and planning a model with up to 10 trillion parameters.
Analysts expect overall September-quarter revenue to rise 9.6% year on year, while e-commerce competition and quick-commerce losses remain challenges.
- Who
- Alibaba and financial analysts, including Jefferies and Longbridge Securities.
- What
- Analysts forecast faster AI cloud revenue growth and improving margins for Alibaba.
- When
- The forecasts concern the September quarter; the comparison quarter ended in June.
- Why
- Alibaba’s expanding AI business is expected to generate more revenue and improve profitability as the company invests heavily in AI.
- Forecast AI cloud revenue growth
- More than 50% in the September quarter, according to analysts.
- Previous-quarter AI cloud growth
- 45%.
- June-quarter AI cloud revenue
- 48.4 billion yuan ($7.2 billion).
- Forecast cloud margins
- Jefferies expects 12.3%; Longbridge Securities forecasts about 15% EBITA margin, up from 12% in June.
- AI model ambition
- Alibaba outlined plans to train a model with up to 10 trillion parameters.
- Data centre expansion goal
- More than 20 gigawatts of global capacity by 2032.
- Expected overall revenue growth
- Jefferies forecasts 9.6% year-on-year growth for the September quarter.
- Expected quick-commerce loss
- Around 9.8 billion yuan for the quarter, although that would be an improvement.