$BABA Q1 FY2027 Earnings: AI Cloud Accelerates to 45% Growth as Qwen3.8-Max and Full-Stack Strategy Drive Commercialization

Alibaba posted Q1 FY2027 revenue of ¥269B, matching estimates with 9% YoY growth, while adjusted EPS of ¥8.52 fell well short of ¥11.26 forecasts and dropped 42% YoY due to heavy spending. AI-related revenue tripled for the 12th straight quarter, boosting Alibaba Cloud’s external revenue growth to 45% and AI Cloud/Compute segment EBITA up 133% YoY. Sharp rises in CapEx to ¥67.7B and weaker free cash flow of -¥44.7B highlight ongoing aggressive AI investments, pressuring net income (down 75% YoY) despite a slight EBITDA beat. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ Interesting CEO commentary on AI models and strategy (Eddie Wu): “We delivered a strong quarter, driven by the improving commercialization of our full-stack AI capabilities. Alibaba Cloud’s external revenue growth accelerated to 45%, with AI-related product revenue delivering triple-digit growth for the twelfth consecutive quarter. We recently launched frontier language, coding, video, audio, image and music models, all delivering top-tier performance. We introduced QwenWork, an AI workforce agent that unleashes enterprise productivity and capabilities. With our full-stack AI strategy, we have put Alibaba in a superior position to capture the substantial growth of demand for artificial intelligence and AI compute.”