Alibaba's core profit plunges 84% even as AI and cloud growth accelerate

On Wednesday, Alibaba disclosed a staggering 84% decline in its core profitability for the March quarter, attributing this drop to significant investments in technology and e-commerce. The Chinese tech powerhouse reported adjusted earnings before interest, taxes, and amortization (EBITA) of 5.1 billion Chinese yuan, equivalent to approximately $750.9 million. This financial indicator is designed to eliminate the effects of one-time gains or losses, providing a clearer picture of the company's essential profitability. Following the announcement, Alibaba's shares listed in the U.S. experienced a brief lift during premarket trading but subsequently fell, ending down 3.4%. The company's ongoing commitment to enhancing its AI and cloud services signals a strategic pivot amid challenging market conditions. As Alibaba navigates these investments, all eyes will be on future earnings reports to assess the long-term impact of their current business strategies.