Alibaba stock slides as Q2 profit misses estimates despite strong AI cloud growth

Alibaba's stock fell nearly 4% in early U.S. trading on Thursday after the company reported Q2 earnings that fell short of analysts' expectations. The e-commerce and cloud giant reported earnings per share of RMB8.52, below the estimated RMB10.72, while revenue increased by 9% year-over-year to RMB268.95 billion, slightly above the RMB268.34 billion consensus estimate.

AI Cloud and Compute Services contributed RMB48.4 billion, with a 45% year-over-year growth, primarily fueled by the rising adoption of AI-related products. However, Alibaba's adjusted EBITA fell by 30% year-over-year to RMB27.3 billion, and the adjusted EBITA margin declined to 10% from 16%, attributed to increased investments in technology and the impact of a new business development program.

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