Alibaba cloud revenue rises 45% even as AI spending weighs on profit

Alibaba shares fall 4% as AI spending drives 75% drop in net income Skip Navigation Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu Key Points Alibaba's U.S. listed shares fell 4% in premarket trading on Thursday after earnings. In this article BABA Follow your favorite stocks CREATE FREE ACCOUNT Alibaba 's U.S. shares dropped 4% in premarket trading Thursday after the Chinese tech giant posted net income that plummeted 75% in the June quarter. The company has been investing heavily in AI infrastructure. The spending has weighed on its results, with capital expenditure up 75% to 67.7 billion Chinese yuan. The jump in spending was due to uneven timing of customer purchases, an increase in CPU-compute capacity and higher prices across a broad range of chip components, the company said. Revenue at the tech giant's key cloud division totaled 48.4 billion yuan, up 45% year-on-year. Alibaba's cloud unit is seen as key to the company monetizing artificial intelligence, much like Microsoft or Google. U.S. listed shares were last trading down 4.11%. Stock Chart Icon Stock chart icon Alibaba's U.S. listed shares year-to-date. This is breaking news. Please refresh for updates. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.