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Alibaba Misses Revenue Estimates as Price Wars and Economic Uncertainty Pressure Growth

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Alibaba reported fiscal Q4 revenue of 236.45 billion yuan ($32.8 billion) on Thursday, narrowly missing analyst expectations of 237.24 billion yuan, as the company grapples with a sluggish Chinese economy, intensifying e-commerce price wars, and global trade uncertainties.

The company’s adjusted earnings of 12.52 yuan ($1.74) per American Depositary Share also came in slightly below the 12.94 yuan forecast by analysts polled by LSEG. U.S.-listed Alibaba shares dropped nearly 7% in early trading, though they remain up 58% year-to-date.

E-Commerce Under Pressure:

Alibaba’s domestic retail arm (Taobao and Tmall) reported 9% revenue growth, bolstered by new consumer engagement and rising order volumes. However, the gains weren’t enough to fully offset competitive pressure from:

  • JD.com, which beat its Q1 estimates earlier this week

  • Pinduoduo (PDD Holdings), known for aggressive discounting

Facing price-sensitive consumers amid a property crisis and low consumer confidence, Chinese e-commerce giants are locked in a pricing battle. To stay competitive, Alibaba is doubling down on instant retail, offering 30- to 60-minute delivery services.

“This instant retail market could grow from 500–600 million consumers to 1 billion,” said Jiang Fan, CEO of Alibaba’s E-commerce Business Group. “We’ll be investing aggressively in this space.”

International and Cloud Segments:

  • International digital commerce (AIDC) rose 22%, missing the expected 26.4%, with analysts noting a lack of commentary on AliExpress and potential U.S. tariff impacts.

  • Cloud Intelligence, a bright spot, posted 18% growth to 30.13 billion yuan, driven by Alibaba’s leadership in China’s AI development. In April, the company launched Qwen 3, an upgraded AI model with hybrid reasoning capabilities.

Strategic Outlook:

CEO Eddie Wu warned of “uncertainties in global trade regulations”, a veiled reference to tariff risks in Western markets. He reaffirmed the international division’s path to profitability in the coming fiscal year.

Looking ahead, investors will watch Alibaba’s performance during the “618” shopping festival in June — one of the year’s biggest consumer events — as a gauge of demand recovery and market competitiveness.

Datadog Raises 2025 Revenue Outlook as AI-Fueled Cloud Security Demand Surges

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Datadog has raised its full-year 2025 revenue forecast and posted better-than-expected first-quarter sales, propelled by strong demand for AI-driven cloud security and monitoring tools and a growing base of large enterprise clients.

The cloud infrastructure and observability provider now expects 2025 revenue between $3.22 billion and $3.24 billion, up from its earlier range of $3.18 billion to $3.20 billion, and above Wall Street’s $3.20 billion consensus, according to LSEG.

Datadog’s first-quarter revenue rose 25% year-over-year to $761.6 million, beating analyst expectations of $741.5 million. Adjusted earnings came in at 46 cents per share, also topping forecasts of 43 cents.

CEO Olivier Pomel highlighted rapid innovation across the Datadog platform, stating the company is helping customers “observe, secure, and act” in cloud environments increasingly shaped by artificial intelligence.

Datadog also announced the acquisition of Eppo, a feature flagging and experimentation platform, to enhance its AI and analytics capabilities and support faster, lower-risk product development.

Newer services like App Builder and On-Call are showing strong uptake, and security monitoring is gaining substantial traction among clients. Datadog ended the quarter with approximately 3,770 customers generating over $100,000 in annual recurring revenue, a 13% year-over-year increase.

CoreWeave Slashes IPO Size and Price Amid Cooling Investor Enthusiasm for AI Infrastructure

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CoreWeave, a prominent AI cloud services provider backed by Nvidia, has significantly downsized its U.S. initial public offering (IPO), reducing the number of shares offered and pricing them well below expectations. The move reflects growing investor caution surrounding capital-intensive AI infrastructure businesses, despite ongoing interest in the sector.

Originally planning to offer 49 million shares priced between $47 and $55, CoreWeave will now sell 37.5 million shares at $40 each—a 23.5% reduction in volume and a steep price cut. This revised offering is expected to raise around $1.5 billion, valuing the company at approximately $23 billion on a fully diluted basis, down from an earlier estimated $32 billion.

. Nvidia Steps In, but Market Confidence Wavers
Nvidia, CoreWeave’s most important backer and supplier, will anchor the IPO with a $250 million order at the revised price. CoreWeave has deployed over 250,000 Nvidia GPUs to power AI workloads, making it one of the largest GPU consumers globally.

Despite this strong strategic relationship, CoreWeave’s IPO roadshow reportedly met with lukewarm interest from risk-averse investors. Concerns over its long-term growth, capital intensity, and heavy reliance on key partners like Microsoft and OpenAI contributed to the subdued reception.

. Debt, Lease Model, and Profitability Risks in Focus
CoreWeave carries approximately $8 billion in debt and leases all of its 32 data centers—an approach that adds $2.6 billion in operating lease liabilities. About $1 billion from the IPO will be used to reduce this debt, though the company confirmed it will continue to borrow. Its inability to generate profits has added to investor hesitation.

While CoreWeave has secured major partnerships, including an $11.9 billion infrastructure deal with OpenAI and a $350 million share issuance to the same firm, questions about its sustainability in an increasingly competitive environment remain.

. AI Enthusiasm Meets Market Realities
The company’s subdued debut is viewed as a potential bellwether for the AI infrastructure sector, where rising costs and uneven demand across data center operators are starting to draw scrutiny. Analysts like IPOX’s Lukas Muehlbauer see this as a sign that “investors are recalibrating AI infrastructure valuations,” rather than rejecting the model entirely.

In the broader IPO market, appetite for new listings appears cautious. Dealogic data shows U.S. equity capital market activity in Q1 2025 dropped both in volume (from 243 to 187 deals) and value (from $74 billion to $63.5 billion) compared to the same period last year.

. Looking Ahead
Although CoreWeave has yet to deliver profitability, its strategic positioning in the AI space and close ties with Nvidia and OpenAI keep it in the spotlight. Investors, however, are now demanding clearer paths to sustainable growth and stronger financial discipline from AI infrastructure players.