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Investing.com-- Alibaba’s Hong Kong shares fell sharply on Friday after the company’s quarterly revenue missed expectations, sparking concerns over weak Chinese consumer spending and sluggish AI-linked growth.
Alibaba (HK:9988) fell 5.4% in Hong Kong trade to HK$121.90, falling as low as HK$120.30 earlier in the session. This came after the e-commerce giant’s U.S. shares (NYSE:BABA) slid 7.6% in overnight trade.
Alibaba was among the biggest weights on the Hang Seng index, which fell 0.8%.
Alibaba’s revenue for the three months to March 31 rose 7% to 236.5 billion yuan ($32.8 billion), missing street estimates of 237.9 billion yuan. Earnings per share also missed expectations.
The weaker-than-expected print was driven by underwhelming growth in both the company’s core e-commerce and cloud segments. Weakness in e-commerce revenue was due in part to sluggish consumer spending in China, as well as increased competition from other players- chiefly JD.com- as they struggle to grow market share in a weak environment.
JD.com (HK:9618) shares fell about 2% in Hong Kong trade on Friday.
Revenue from Alibaba’s cloud unit also missed expectations, drumming up concerns over the company’s AI prospects, as well as those of its Chinese peers.
Alibaba is at the forefront of China’s AI efforts, and had released a slew of updated models this year as it moved to catch up with DeepSeek. Its cloud services are also widely used in AI development.
But disappointing earnings from Alibaba Cloud could indicate that local demand for AI is not as robust as initially thought.