Welcome back to PyUncut — where we break down the biggest stories in finance, tech, and global markets with clarity, depth, and zero noise.
Today, we’re diving into a company that has been written off more times than we can count… yet refuses to die.
Alibaba.
Yes, the same Alibaba that spent the last three years buried under regulatory crackdowns, endless restructuring, falling investor confidence, and market pessimism.
But something big just happened — something that may signal the start of Alibaba’s real comeback story.
And it’s powered by AI, cloud, and a sudden burst of growth Wall Street wasn’t expecting.
Let’s unpack what’s going on.
🔥 The Cloud Division Just Shocked the Market
The headline number is impossible to ignore:
Alibaba’s cloud revenue jumped 34% year-on-year in the latest quarter.
That beat expectations and marked the fastest growth rate in over a year.
Why is this important?
Because Alibaba Cloud is the heart of the company’s AI strategy.
Every AI model, every generative AI product, every enterprise AI deployment — it all runs through the cloud segment.
Chief Executive Eddie Wu made it crystal clear:
AI demand isn’t just growing… it’s exploding.
He said Alibaba’s AI-related product revenue posted triple-digit growth for the ninth straight quarter, which is incredible consistency even by global tech standards.
And here’s the real kicker:
“We’re not even able to keep pace with customer demand… especially with how fast we can deploy new servers.”
— CEO Eddie Wu
That is the same problem Big Tech in the U.S. is facing.
But it also confirms something critical:
The AI arms race is global — and Alibaba is very much in the game.
💰 247.8 Billion Yuan in Revenue — But Profit Took a Big Hit
At a top-line level, Alibaba grew revenue 5% to 247.8 billion yuan.
But buried underneath that, profitability plunged.
Adjusted EBITA dropped 78% year over year, mainly because Alibaba is burning cash to compete in China’s ultra-aggressive instant-delivery market.
Normally, a 78% profit collapse would tank the stock instantly.
But here’s the twist:
Investors shrugged it off.
Shares jumped more than 4% in pre-market trading.
Why?
Because the market finally sees something it hasn’t seen in years:
growth momentum — especially in cloud, e-commerce, and user engagement.
For Alibaba, confidence matters almost as much as results.
🚀 AI Spending Is Going Parabolic — And It Might Increase Again
During the earnings call, Alibaba confirmed that:
- It has already spent 120 billion yuan on AI and cloud infrastructure in the last year.
- It previously announced a 380-billion-yuan plan for AI investment over three years.
- And now the CEO says even that target might be too small.
This is a bold statement.
It means Alibaba sees massive — possibly unprecedented — demand for AI infrastructure in China.
But also remember:
Heavy investment depresses earnings in the short term.
Long term? It creates the foundation for the next decade of revenue.
Just like Amazon did with AWS.
Just like Microsoft did with Azure.
Just like Google did with Tensor Processing Units.
This is the part of the cycle where margins fall, but competitive advantage is built.
🤖 The Qwen AI Ecosystem Is Growing Faster Than Expected
Most investors haven’t been paying attention, but Alibaba dropped a bombshell:
Its Qwen AI app — the Chinese alternative to ChatGPT — hit 10 million downloads in just one week.
Ten million.
In one week.
That shows real consumer AI traction — something only a handful of companies worldwide have achieved.
And remember:
Every Qwen user becomes an Alibaba Cloud user indirectly.
This is the same playbook OpenAI uses to fuel Azure demand.
📉 What About Competition, Regulation, and the Macro Picture?
Let’s take a balanced look.
Regulation
China’s tech crackdowns have eased significantly.
Alibaba is no longer the government’s punching bag.
But regulatory unpredictability will always be part of the China risk premium.
Competition
Tencent, Baidu, ByteDance — all fighting for the same AI and cloud customers.
But Alibaba Cloud still maintains a strong position in enterprise AI infrastructure.
Macroeconomics
China’s consumer economy has been sluggish.
But Alibaba delivered 16% growth in e-commerce revenue this quarter — which is actually accelerating.
This is a rare bright spot in China’s retail sector.
⚠️ The Hidden Risk: Instant Commerce
The “quick commerce” business — 30-minute deliveries, groceries, essentials — is burning cash.
And Alibaba admits it.
Revenue in this segment jumped 60%, but losses remain heavy.
Investors are brushing it off for now because cloud is the main story.
But if this spending continues unchecked, it could become a long-term drag.
📊 So… What Does This Mean for Alibaba Stock (BABA)?
Let’s zoom out.
Alibaba’s stock has been crushed for years — down over 70% from its all-time highs.
Sentiment was so bad that expectations were basically zero.
Now, the narrative is shifting.
Signs of a potential turnaround:
- Cloud is accelerating — the fastest in 5 quarters
- AI demand is outstripping supply
- Qwen is gaining real traction
- E-commerce growth is rebounding
- Investors are ignoring profit declines (a bullish sentiment shift)
Signs of caution:
- Massive capex means thin margins
- The China risk premium never goes away
- Quick commerce is still a money pit
- Global investors remain skeptical of Chinese tech
📈 PyUncut Take: Alibaba Is a Deep-Value + AI Growth Hybrid
This is what makes Alibaba such a unique investment case:
It trades like a distressed value stock…
But its cloud and AI division behaves like a growth company.
If Alibaba executes on its AI roadmap, cloud expands, and profitability stabilizes —
then BABA could be one of the most misunderstood and undervalued tech plays of this decade.
But it requires patience, risk tolerance, and acceptance of China’s macro unpredictability.
This stock isn’t for everyone.
But it is becoming interesting again — for the first time in years.
🎙️ Final Word
Alibaba has spent years trapped under negative sentiment.
But now, the company is doing something that changes everything:
Delivering real numbers, real growth, and real AI traction.
Cloud revenue exploding.
AI downloads surging.
Demand exceeding supply.
Capex going parabolic.
This isn’t a hype cycle — it’s a business cycle.
Alibaba is rebuilding itself, brick by brick, server by server, and model by model.
If this momentum continues, the company that once dominated China’s internet may finally be on its way to reclaiming its place at the top.