Alibaba's latest financial results demonstrate the success of the tech giant's newest strategy: a "dual breakthrough" in both AI technology revolution and consumer lifestyle scenarios. The company is simultaneously pursuing the "cosmic ambitions" of artificial general intelligence while reconstructing the "everyday marketplace" through expanded traffic entry points.
Following Alibaba (HK09988, stock price HK$137.1, market cap HK$2.61 trillion) releasing its better-than-expected first quarter fiscal 2026 results (three months ended June 30, 2025), capital markets responded with strong positive feedback. On September 1st, the company's stock opened nearly 15% higher, continued climbing throughout the day, and ultimately closed up 18.5%, reaching its highest level since March.
The earnings report was indeed impressive: quarterly total revenue reached 247.652 billion yuan, up 2% year-over-year; net profit hit 42.382 billion yuan, surging 76% year-over-year. However, capital markets look beyond current performance to future growth expectations. The core logic behind Alibaba's stock surge lies in its successful "dual breakthrough" in two major directions: the "cosmic ambitions" of "AI + Cloud" and the "everyday marketplace" enhanced by Taobao Flash Purchase. This strategic positioning both responds to technological revolution trends and anchors consumer demand, creating a dual engine for growth.
This strategic clarity stems from the influence of Alibaba's key figure, Jack Ma. Although this employee (code-named "Feng Qingyang") stepped down as chairman in September 2019 and left the board in September 2020, he remains a crucial player in Alibaba's strategic decisions. Since his "return to the arena" earlier this year, Alibaba's stock chart has shown strong upward momentum.
At Alibaba Cloud's new fiscal year kickoff meeting in April, Ma's speech directly articulated Alibaba's strategic core: "High technology is not just about conquering the starry seas, but also about nurturing everyday life. The responsibility of technology professionals is not to let AI replace humans, but to make AI better understand and serve humanity." This statement clearly annotates Alibaba's dual-track strategy of "hardcore technology + consumer services."
Alibaba's "cosmic ambitions" represent a breakthrough anchored in the AI era. In public memory, Alibaba once restructured consumption logic with Taobao and rewrote financial rules with Alipay, sparking discussions about whether it was the "Jack Ma era" or "the era's Jack Ma." Now, both public expectations and capital market demands point toward an Alibaba that "leads innovation through hardcore technology" - fulfilling what Ma calls "the responsibility of Alibaba Cloud's resources and technical talent," while meeting the deeper strategic requirement for China's tech industry to "avoid being constrained by others."
To shoulder this responsibility, Alibaba's investment has been massive: over the past four quarters, it has invested more than 100 billion yuan in AI infrastructure and product development; over the next three years, it plans to invest over 380 billion yuan in cloud and AI hardware infrastructure construction. This investment aims not only to build its own "technological moat" but also to create a "Chinese-style technology ecosystem."
The latest financial results validate this investment: Alibaba Cloud's quarterly revenue grew 26% year-over-year to 33.398 billion yuan, reaching a three-year high. More importantly, Alibaba Cloud's AI revenue now accounts for over 20% of external commercial revenue. This represents not distant "cosmic ambitions" but a technological breakthrough synchronized with the AI era, showing tangible results.
If "cosmic ambitions" represent Alibaba's sprint toward the future, then the "everyday marketplace" represents its commitment to rooting in consumer services and reshaping the e-commerce ecosystem. Today's e-commerce landscape is no longer dominated by a single player: Pinduoduo has torn open the market with low prices, Douyin (TikTok) has restructured consumption habits through traffic, and Meituan has jumped beyond food delivery to aggressively enter instant retail. Traditional e-commerce models urgently need reshaping, and Alibaba must find new traffic anchors and ecosystem support points.
This year's "food delivery war" among Meituan, JD.com, and Ele.me essentially represents a transformation to "reshape the e-commerce ecosystem": competing for instant retail entry points, promoting the integration of "far-field e-commerce," "near-field retail," and "local services," and accelerating digitalization of local lifestyle services. The core of competition ultimately returns to supply chain efficiency, user experience, and ecosystem synergy capabilities - precisely where Alibaba can leverage its strengths.
To this end, Alibaba has conducted clear business integration: merging Ele.me with Taobao Flash Purchase and placing them alongside Fliggy under Alibaba China E-commerce Group, creating a deeply integrated "e-commerce + local lifestyle" mega-consumer platform. Simultaneously, it has invested heavily to activate the ecosystem, launching "Ele.me's 10+ billion yuan subsidy" in late April and announcing in July that Taobao Flash Purchase would directly subsidize consumers and merchants with 50 billion yuan over the next 12 months.
The "money burning" has not been in vain: according to reports, Ele.me's market share in food delivery surged from 13% to 28% in the second quarter, making it the biggest winner in the current "delivery war." Financial data is even more telling - despite quarterly sales and marketing expenses surging year-over-year to 53.2 billion yuan, instant retail business revenue reached 14.784 billion yuan, up 12% year-over-year. Taobao Flash Purchase's monthly active users exceeded 300 million, representing 200% growth compared to pre-April levels.
More importantly, this growth has formed a "virtuous cycle growth flywheel": high-frequency local lifestyle services from Taobao Flash Purchase effectively drive relatively low-frequency e-commerce consumption, then leverage Alibaba's technical capabilities to enhance user experience, ultimately feeding back into core e-commerce business. This represents the "ecosystem synergy effect" Alibaba pursues and is key to maintaining its "everyday marketplace" position in the consumer services arena.
Looking back at the underlying logic of Alibaba's better-than-expected earnings and stock surge, it essentially represents a victory for "technology + consumption" dual-wheel drive. As Alibaba CEO Eddie Wu stated: "The technology platform centered on AI + Cloud and the mega-consumer platform integrating shopping and lifestyle services represent two major historic strategic opportunities for Alibaba Group."
These two opportunities are not isolated but complementary and mutually reinforcing: the "cosmic ambitions" of "AI + Cloud" provide technical support for the "everyday marketplace" - using AI to optimize supply chain efficiency and cloud services to enhance user experience. Meanwhile, Taobao Flash Purchase's "everyday marketplace" provides application scenarios and commercial closed loops for "cosmic ambitions" - bringing hardcore technology to specific consumer needs.
While seemingly pointing in different directions, these two strategies ultimately converge and empower each other. For Alibaba, finding balance and support between "cosmic ambitions" and "everyday marketplace" is not only the underlying logic of this stock surge but also the solid foundation for navigating industry cycles and achieving long-term development.