Alibaba Group Holding Ltd.'s stock soared over 5% in pre-market trading on Friday, as the Chinese e-commerce giant reported better-than-expected second-quarter earnings driven by strong growth in its artificial intelligence (AI) and cloud businesses.
The company posted adjusted earnings per ADS (American Depository Shares) of 15.06 yuan ($2.15), beating analysts' estimate of 14.82 yuan, according to FactSet. Revenue rose 5.2% year-over-year to 236.50 billion yuan ($33.70 billion), slightly missing the consensus forecast of 239.45 billion yuan.
The highlight of Alibaba's results was the robust performance of its AI and cloud segments. The company said its AI-related revenue grew at a triple-digit percentage rate for the fifth consecutive quarter, indicating the strong momentum in this emerging business. Revenue from the Cloud Intelligence Group increased 7.1% year-over-year to 29.61 billion yuan ($4.22 billion), surpassing expectations.