Day: September 1, 2025

• Alibaba stock surged despite an earnings miss.
• AI and cloud growth stole the spotlight.
• But it’s in a cutthroat, cash-burning food delivery war with Meituan and JD.com.

Tech giant Alibaba has been fighting a bruising food delivery war in China. But the company’s latest earnings make it clear that artificial intelligence is what investors really care about.

On Friday, Alibaba reported a 2% rise in overall revenue to 247.65 billion Chinese yuan, or $34.6 billion, for the quarter ended June 30 — missing analysts’ forecasts of $252.92 billion yuan in revenue. Operating profit dropped 3% to 35 billion yuan.

Despite that drag, investors piled in.

Alibaba’s New York-listed shares closed 12.9% higher on Friday to $135 apiece, while its Hong Kong-listed stock gained as much as 18% Monday morning.

The rally was fueled by a triple-digit percentage gain in AI-related product revenue and Alibaba Cloud’s 26% year-over-year revenue surge to 33.4 billion yuan — beating analyst expectations for an 18% rise.

That performance underscores how investors are zeroing in on AI as Alibaba’s next growth engine.

“Our investments in AI have begun to yield tangible results,” said Alibaba Group CEO Eddie Wu on Friday’s earnings call.

“We’re seeing an increasingly clear path for AI to drive Alibaba’s robust growth,” Wu said.

Analysts are upbeat too.

“For Cloud, it maintains accelerating growth on rising AI adoption with enhanced modeling capabilities and strong inference/training demands,” wrote equity analysts at Jefferies on Friday.

That long-term upside explains why investors are looking past the bruising economics of food delivery.

Quick commerce drags on profits

The cloud boom stands in sharp contrast to Alibaba’s costly delivery battles.

Alibaba’s China e-commerce business — which includes its traditional e-commerce and food delivery businesses — managed a 10% revenue growth from last year, to 140 billion yuan.

But, earnings before interest, taxes, and amortization fell 21% from a year ago amid heavy subsidies for food delivery and instant shopping.

That weakness reflected the heavy toll of Alibaba’s quick commerce push. It has been burning billions of yuan to compete with rivals Meituan — the market leader — and new entrant JD.com in food delivery and instant shopping.

Jiang Fan, Alibaba’s e-commerce chief, acknowledged on Friday’s call that the company has spent heavily to build up the quick commerce business, but said the losses will shrink as repeat customers drive efficiency.

Nomura analysts wrote on Monday that Alibaba’s quick commerce sector has scaled up enough for the company to “shift emphasis from land grabs to optimizing efficiency.”

Chelsey Tam, a senior equity analyst at Morningstar, struck a similar note, arguing Alibaba is better positioned in the current food delivery battle.

“We believe Alibaba has leveraged its ecosystem resources far more effectively than in previous food delivery competitions, increasing its chances of gaining market share and achieving profitability in the medium term,” wrote Tam on Friday.

Alibaba’s stock is 59% higher in New York this year. Its Hong Kong-listed stock is up 65% over the same period.

• A Ukrainian analyst published footage of a road in China, saying the clip came from a Russian drone.
• The clip appears to be of the Beihuan main road in Shenzhen, China’s tech hub bordering Hong Kong.
• It comes as Ukrainians repeatedly accused Chinese companies of supplying key electronics to Russia.

A well-known Ukrainian drone analyst has published footage that appears to be camera tests filmed in Shenzhen, China, saying these clips were retrieved from a downed Russian Gerbera drone.

Serhii “Flash” Beskrestnov, an oft-cited drone specialist who runs a popular Telegram channel about uncrewed systems in the Ukraine war, uploaded the videos on Sunday.

Business Insider could not verify that the footage was taken from a Gerbera, a Russian-produced long-range drone designed to mimic the Iranian Shahed loitering munition.

However, the clips appear to show the Beihuan main road in Shenzhen, which Business Insider geolocated from the footage using Baidu’s map and satellite features. Baidu is a local search engine akin to Google, which cannot be freely accessed in the mainland.

Cyber Boroshno, a Ukrainian open-source geolocation intelligence group, first reported that the angle of the footage meant it was likely filmed from the Aote Kexing Science Park, a set of four high-rise office complexes along the Beihuan main road.

One clip begins with an unknown person, who is sitting inside a high-rise building, moving the camera to face a window overlooking the Beihuan road at night. As the camera zooms in on the main road, it picks up individual cars, highlighting them with yellow and white indicators.

Another clip shows similar footage of the camera detecting cars merging into the Beihuan main road.

Beskrestnov also published an image of what he said was a camera attached to the Gerbera.

The product resembles the A40 Pro, a 360-degree 40x optical zoom camera produced by ViewPro, a Chinese company based in Shenzhen. The firm lists the A40 Pro as being able to track targets using artificial intelligence.

ViewPro’s website also lists its office address in the Shenzhen Hi-tech Industry Park, roughly 0.75 miles from the Aote Kexing Science Park. The company website said its product focus is on “UAV gimbals, payloads, and innovative drone accessories.”

It’s not clear if the company is directly involved with the Russian military or if the A40 Pro might have been bought by a separate entity that later supplied the Kremlin. ViewPro did not respond to a request for comment sent by Business Insider.

Beskrestnov’s post comes as Ukraine has accused Chinese industries of supplying Russia with key electronics and chips for advanced munitions and weapons.

The connection poses wider implications for the West’s sanctions on Moscow; Ukrainian officials and analysts have repeatedly said they’ve found parts sourced from outside Russia inside the Kremlin’s drones.

In January, an advisor to Ukrainian President Volodymyr Zelenskyy said Kyiv’s troops had been finding Chinese anti-jamming antennae in Shahed drones. Two months later, Beskrestnov posted a photo of an advanced Chinese 16-element Controlled Reception Pattern Antenna, which he said was retrieved from the wreckage of a Shahed.

Kyiv’s military intelligence also said in November that it found Western-made parts in Shahed decoy drones.

Reuters and The New York Times reported in July 2024 that Russia regularly dodges sanctions by using Hong Kong as a central location to set up shell companies that procure and transport electronics and chips to Moscow’s military.

The US Commerce Department has sought to curb the strategy by imposing individual sanctions on dozens of Hong Kong businesses and individuals.

Shenzhen, in Guangdong province, is often dubbed China’s Silicon Valley and borders Hong Kong. Their proximity means that both cities, while separately governed and culturally different, are closely integrated under China’s Greater Bay Area initiative.

• Alo Yoga is set to launch leather bags that cost as much as $3,600, Vogue Business reported.
• The athleisure brand and Lululemon competitor is betting on wellness being the new luxury market.
• The bags, set to launch on September 9, will come with crystal bag charms attached.

Alo Yoga, known for its $130 leggings, is launching bags with Gucci-level price tags.

The Los Angeles-based athleisure brand is set to launch three leather bags, priced from $1,200 to $3,600, on September 9, per a report by Vogue Business on Thursday.

The bags, shaped like rounded duffel bags and bucket bags but made of Italian-made leather, will also have a crystal bag charm attached, per photos provided to Vogue Business by Alo Yoga.

For comparison, one of Gucci’s most iconic bag collections, the GG Marmont, retails for about $1,400 to $2,850.

Alo Yoga’s cofounder and CEO, Danny Harris, told the outlet that there has been a generational shift in what luxury means today.

“Our community, our culture, is not necessarily going out to clubs and drinking. We’re not hanging out at the café sipping a martini and carrying a handbag,” Harris said to Vogue Business. “We’re at a Pilates studio, or we’re setting an intention in our yoga class and focusing on our health and wellness — and carrying a handbag.”

He told the outlet he was confident some of Alo’s customers could afford more premium products.

“Our community, we believe, is already carrying some of the name-brand bags, and they would prefer to carry an Alo bag — especially one that is more in alignment with and based on modern-day luxury, as opposed to luxury of what mum or grandma had,” he said to Vogue Business.

The bags will be available for sale from September 22 in 23 of Alo’s stores globally, the outlet reported.

This is not Alo’s first foray into the world of luxury. In 2023, it launched its premium products line, Alo Atelier, which included a $1,400 puffer coat, $748 cashmere pants, and $698 fur jacket.

The brand, seen as a Lululemon competitor, is known for being a favorite of celebrities like Kendall Jenner and Hailey Bieber.

A representative for Alo Yoga did not respond to a request for comment from Business Insider.