Alibaba said it is working on a competitor to ChatGPT, the artificial intelligence chatbot that has caused a stir around the world. Alibaba said their own product is currently undergoing internal testing.

Quang Da | Visual China Group | Getty Images

Shares of Ali Baba fell sharply on Tuesday after the Chinese tech giant’s net profit collapsed in its fiscal fourth quarter.

Here’s how Alibaba fared in the March quarter against LSEG consensus estimates:

  • Revenue: 221.9 billion yuan ($30.7 billion), versus an estimate of 219.66 billion yuan.

Net income attributable to common shareholders was 3.3 billion yuan, down 86% year-on-year.

Alibaba shares were about 7% lower by noon ET.

Alibaba had a tough year in 2023 when it carried out its largest corporate structure in history. It also separately implemented several major management changes, with veteran Eddie Wu taking over as CEO in September.

In a bid to show confidence to shareholders, the Chinese tech giant said earlier this year that it had increased its share buyback program by $25 billion through the end of March 2027.

Alibaba has struggled with cautious consumer spending in China, but saw signs of a slight recovery in its core e-commerce business in the March quarter.

The Hangzhou-based company is stepping up its push overseas amid a slowdown in the domestic market, where Alibaba faces growing competition from low-cost players such as PDD.

Revenue for the Taobao and Tmall division, which houses Alibaba’s Chinese e-commerce business, rose 4 percent year-on-year to 93.2 billion yuan. That was faster than growth of 2% in the previous quarter.

Customer management revenue — which represents sales derived from services such as marketing that Alibaba sells to merchants on its e-commerce platforms Taobao and Tmall — rose 5 percent year-on-year after being flat in the previous quarter. Alibaba’s international trade business also posted a 45% year-on-year increase in revenue to 27.4 billion yuan.

Earlier this year, CEO Wu pledged to “reignite” growth at the e-commerce firm with additional investment. There seem to be early signs of this taking hold in the March quarter.

“This quarter’s results show that our strategies are working and we are returning to growth,” Wu said in the earnings release.

The decline in profit casts a long shadow over revenue. Alibaba said the reason for the decline was “primarily related to a net loss on our investments in publicly traded companies in the quarter, compared to a net gain in the same quarter last year, due to price-to-market changes.”

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