Alibaba Meets Q3 Revenue Expectations, Boosted by Strong Year-End Sales:

Alibaba Group Holding reported third-quarter revenue in line with Wall Street expectations on Wednesday, driven by strong year-end sales and the success of its strategy to attract cost-conscious consumers.

The company's U.S.-listed shares surged 5.6% in premarket trading following the announcement.

Financial Performance

Alibaba recorded a revenue of 280.15 billion yuan ($38.58 billion) for the quarter ending December 31, slightly surpassing the 279.34 billion yuan forecasted by 17 analysts polled by LSEG.

To boost consumer spending and drive sales in its core domestic e-commerce business, Alibaba and other Chinese retailers have implemented aggressive price cuts and promotional campaigns.

Factors Driving Growth

The company’s strong financial performance was fueled by:

Robust international demand

Increased consumer spending towards year-end

Singles' Day Success

China’s annual Singles' Day shopping festival in October and November, regarded as a barometer of consumer sentiment, contributed significantly to sales growth. The event lasted longer than previous years and led to a 26.6% rise in sales across major e-commerce platforms, according to Syntun.

During the Singles' Day period, 45 brands, including Apple and Xiaomi, exceeded 1 billion yuan in gross merchandise value (GMV), a key metric for online sales.

Alibaba's domestic e-commerce platforms, Taobao and Tmall Group, reported a 5% revenue growth for the quarter.

AI and Market Positioning

Alibaba has started 2025 as a key player in China’s AI race, attracting investors with strategic business moves. Its stock price has climbed over 40% since the beginning of the year.

The company highlighted that AI-related product revenue maintained triple-digit year-over-year growth for the sixth consecutive quarter in the December quarter.

Investor confidence in Alibaba received a further boost this month when its co-founder Jack Ma was included in a meeting of private enterprise leaders chaired by China's President Xi Jinping. Photos of Ma shaking hands with President Xi have further strengthened market sentiment around Alibaba.

Collaboration with Apple and AI Advancements

In a strategic move, Alibaba announced a partnership with Apple to integrate its AI solutions into iPhones sold in China, reinforcing its market presence amid competition from domestic AI firms like DeepSeek.

Additionally, in late January, Alibaba unveiled an upgraded version of its Qwen 2.5 AI model, claiming that it outperforms DeepSeek-V3, further solidifying its position in China’s competitive AI landscape.

With a strong financial performance, strategic AI expansion, and renewed investor confidence, Alibaba continues to strengthen its foothold in the global and domestic markets.