Alibaba misses earnings estimates amid heavy AI investment despite revenue growth.

Alibaba reported non-GAAP earnings of $1.26 per ADS, below the $1.49 consensus, driven by heavy investment in AI and cloud computing. Quarterly revenue rose 9% to $39.64 billion, beating estimates, with cloud revenue up 45% due to strong AI demand. Net income fell sharply due to increased expenses and lower investment gains. The company is expanding AI infrastructure, increasing capital expenditure by 75%, signaling a focus on long-term growth despite short-term profit pressure.