In the final quarter of 2024, Alibaba Group, China’s e-commerce and tech giant, reported a staggering 239% year-on-year Alibaba shares jump in its net profit. This remarkable performance is attributed to a combination of factors, notably its cloud business expansion and advancements in artificial intelligence (AI). The surge in profitability has captured the attention of investors and market analysts alike, raising optimism for Alibaba’s future. In this article, we’ll explore the key factors behind this growth, compare it to Amazon’s latest success, and consider how global market dynamics are shaping the future of tech companies.
Alibaba shares jump Profits Soar Thanks to Cloud and AI
Alibaba’s CEO, Eddie Wu, attributed the company’s extraordinary earnings to growth in its Cloud Intelligence Group and its investments in AI. During the past six quarters, Alibaba’s AI initiatives have led to triple-digit expansion, significantly boosting its business performance. The company’s cloud computing division, which includes services such as Alibaba Cloud, has become a key growth driver, with a 13% year-on-year increase in sales during the quarter.
The rapid expansion of Alibaba’s AI-driven services and cloud infrastructure reflects the company’s strategic pivot toward technology beyond its e-commerce roots. The surge in profitability has also been supported by Alibaba’s strong performance in the consumer retail sector, though it is clear that its tech-focused initiatives are providing the company with new revenue streams.
Investors have responded positively to the results, with Alibaba’s shares rising 8.1% in U.S. markets and jumping as much as 12% in Hong Kong on Friday. This growth is not only a testament to the strength of Alibaba’s business model but also reflects investor optimism about the potential of AI and cloud technologies to continue driving significant returns for the company.
Amazon’s Quarterly Revenue Surpasses Walmart
Amazon, another global tech and retail powerhouse, has also made headlines with its impressive growth. In late 2024, Amazon surpassed Walmart in quarterly revenue for the first time in history. Amazon’s fourth-quarter revenue of $187.8 billion outstripped Walmart’s $180.5 billion, signaling a shift in the retail landscape. Amazon, like Alibaba, is a dual-threat in the market, benefiting from both its retail operations and its cloud computing division, Amazon Web Services (AWS).
The rise of Amazon’s cloud business has enabled the company to diversify its revenue streams, much like Alibaba’s shift towards AI and cloud computing. AWS remains a critical driver of Amazon’s profits, offering cloud infrastructure to businesses worldwide. As Amazon continues to expand its presence in global markets, it is evident that its dual-focus model—retail and cloud computing—is a powerful combination that enables the company to dominate multiple sectors.
This shift in revenue dynamics underscores the increasing role of technology in the broader economy, particularly in industries once dominated by traditional brick-and-mortar businesses like Walmart. Amazon’s ability to generate revenue from a variety of sources has positioned it as a formidable player in both the retail and technology sectors.
Walmart Remains the Revenue Leader
While Amazon may have overtaken Walmart in quarterly revenue, the retail giant is still the world’s largest generator of annual revenue. Walmart’s diverse portfolio, which includes retail, grocery, and e-commerce services, enables it to remain the dominant force in global retail. However, Walmart’s growth has slowed, with the company forecasting a reduction in profit growth for the upcoming fiscal year.
Despite this, Walmart’s long-standing position as a retail behemoth makes it the leader in global annual revenue. The company has faced challenges as the retail landscape evolves, with digital transformation becoming a central theme in the industry. Walmart is also focused on its own cloud initiatives, particularly through its partnerships with technology providers like Microsoft to enhance its digital capabilities.
Nevertheless, the fact that Amazon has now surpassed Walmart in quarterly revenue is a significant milestone in the ongoing transformation of the global retail and tech industries. The comparison between the two companies highlights the shifting market dynamics, where traditional retail giants are increasingly being challenged by tech-driven competitors like Amazon and Alibaba.
U.S. and Asian Markets Respond to Tech Surge
The impact of Alibaba’s and Amazon’s impressive results has rippled across global markets. U.S. markets retreated from recent highs on Thursday, with the S&P 500 down by 0.43% and the Dow Jones Industrial Average losing 1.01%. The Nasdaq Composite also declined by 0.47%. Despite this downturn, Asia-Pacific stocks climbed on Friday, with Hong Kong’s Hang Seng Index surging by more than 3.4%, largely driven by the strong performance of Alibaba shares.
The rise of Alibaba and Amazon has highlighted the growing dominance of technology in the global economy, with cloud computing, e-commerce, and AI emerging as key sectors for future growth. Investors are closely watching these companies as they continue to disrupt traditional industries and capitalize on emerging technologies.
Alibaba shares jump Inflation and Economic Concerns: The Case of Japan
While the tech sector is thriving, global economic concerns remain. In Japan, inflation reached 4% year-on-year in January 2025, the highest level since January 2023. Core inflation, which excludes fresh food prices, rose to 3.2%, surpassing economists’ expectations. This sustained inflationary pressure has been a challenge for the Bank of Japan, which has struggled to meet its 2% inflation target for over two years.
Despite these economic challenges, markets in Asia showed resilience, with Hong Kong’s gains and Alibaba’s surge offering hope for investors in the region. As countries continue to grapple with inflation and economic uncertainty, the performance of tech companies like Alibaba and Amazon provides a positive signal for future growth in the tech sector.
Alibaba’s Stronger-than-Expected Results
The release of Alibaba’s quarterly results exceeded analyst expectations. In addition to a 239% surge in net income, the company also saw strong sales growth across its Cloud Intelligence Group. Alibaba’s impressive performance is part of a broader trend in the technology sector, where companies are increasingly relying on cloud computing and AI to drive profitability.
Moreover, Alibaba’s focus on expanding its technological capabilities has allowed it to stay ahead of competitors in the cloud services space, further strengthening its market position. The company’s leadership in AI research and development also places it at the forefront of the rapidly evolving tech industry.
Looking Ahead: The Future of Tech and Retail
As Alibaba and Amazon continue to drive innovation in the tech and retail sectors, their dominance in cloud computing, artificial intelligence, and e-commerce will likely shape the future of these industries. Alibaba’s growth in cloud services and AI demonstrates the increasing importance of these technologies in the global market. Similarly, Amazon’s ability to combine retail with cloud computing services gives it a unique edge in the competitive tech landscape.
For investors, these companies represent a strong opportunity for long-term growth, with their continued success in cloud computing and AI likely to provide strong returns. The shift from traditional retail models to tech-driven operations also suggests that the future of commerce will be increasingly shaped by the rise of digital technologies.
Alibaba shares jump Conclusion
The surge in Alibaba’s shares and the success of Amazon in surpassing Walmart’s quarterly revenue mark significant milestones in the ongoing evolution of the global economy. Both companies have demonstrated the power of cloud computing and artificial intelligence to drive growth, making them dominant players in the tech and retail industries. As these companies continue to innovate and expand their services, they will play a pivotal role in shaping the future of commerce and technology.
This transformative period in the tech sector is providing investors with exciting opportunities, as companies like Alibaba and Amazon redefine traditional business models and embrace the digital future. As the global economy continues to adapt to new technologies, these tech giants will be at the forefront of driving innovation and growth.