阿里季度利润暴跌75%因AI资本开支近100亿美元

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This is Bloomberg Tech. Coming up, Alibaba's profit plunges more than 75% after the company increased its quarterly capex to almost $10 billion for AI. Plus, Meta has quietly become one of Microsoft's largest AI customers, reviving concerns of circular financing. We're going to have the details. And defense tech startup Castellian hits a $13 billion valuation. We're going to discuss how the company plans to use its latest funding to boost production of its hypersonic missile systems. [music] Technology people, there is a lot going on in financial markets.

In summary, technology stocks are down for a fifth straight session. That is something that we saw happen throughout July. We see the 30-year yield uh also kind of move back higher going back to where it was prior to the news of yesterday. If you remember, we started the show with the Treasury's intervention um in buying back uh longerdated debt that has had a ripple effect across asset classes. By the way, oil also pushing higher $93 a barrel on Brent crude as the president continues to talk about the war in and with Iran.

Elsewhere, the technology stories are earnings related largely. Walmart has had its slowest US growth in 6 years despite being increasingly focused on e-commerce, more online uh pushing uh basically richer, higher net worth individual customers towards convenience and it hasn't really panned out for them. We'll get a little more. The stock's down almost 10%. [music] Alibaba committed to AI, but profits taking a hit. And it's with Alibaba we want to focus.

Let's get to Bloomberg executive editor Peter Strom. I find this so interesting because Alibaba is highly analogous with what we see with uh some of the biggest technology companies here in the United States, but $10 billion doesn't seem that big a commitment to me. Not by today's scales of AI spending. That's certainly right. Yeah, [clears throat] Alibaba has had a rough go of it uh this quarter and for a few quarters now.

The e-commerce company has pivoted aggressively into AI. They've invested a lot in infrastructure and also in their AI model Gwen, which has been quite popular. We talked a couple weeks ago about the new version of Gwen that's getting lots of attention. But when you look at the financials, they've been pretty rough for the company. Revenue did grow about 9%, but as you say, profit was down 75% and their cash flow turned negative to the tune of $6.6 billion.

Again, maybe that's not a lot of money by US capital spending figures, but it is in China. The company is trying to invest in a number of these different areas and the payoff is quite difficult for them. They are right in the heart of all of these open- source models that we've been talking about including mean moonshot and deepseek. They have to compete with those guys with the within the domestic market and that's been very difficult for them when it comes to profitability.

So so Alibaba is kind of like Amazon in the sense it has multifaceted business the e-commerce business AI cloud computing uh other fintech and and social media ventures. What do we learn about the fastest growth? Where are they doing best?

Well, they're doing the best in cloud computing right now. That has been a strong growth business for them. It is coming on strong. They do sell uh capacity to corporate customers and government customers there. In particular, the Chinese consumer is struggling a bit at this point. So, that foundational e-commerce business has been a challenge for Alibaba. That's been the case for a while. They used to have of course more control over Ant, the financial services arm.

They still have a stake in it, a financial stake in that company, but that uh is not the kind of um momentum builder that they had had in the past. And really Eddie Woo, the CEO, he was talking on the conference call uh afterwards talking about how AI is really their north star. They've talked about um uh AGI is really their go the goal for the company now. That's what he wants to make a priority for them. So they're investing very very heavily.

They're very convict uh convicted uh in their commitment to AI. But it was one of those conference calls as we were listening in where the stock ticks down uh a little bit uh as as the minutes go by. It's not exactly what we want to see at this point. They're certainly going to continue it to invest in that field, but the payoff from AI from them right now doesn't look that great. Blueberg's Peterstrom who leads our coverage of Asian technology companies.

Thank you very much. Our next guest believes that an AI resurrection is going to come following a summer wash out. Though AI related volatility is far from over and a repeat of return from the first half of the year is unlikely. Empower chief investment strategist Martin Norton joins us now. It's interesting. You know, you can separate the first 6 months of this year with what many think will happen in the back six months.

What's changed to allow for those different pictures?

Yeah. Well, I think a lot of the I guess transparency around the demand and how this was changing the memory and the semispace. I think that really became apparent in the first half of the year. We have these tripledigit returns and then we have this summer wash out and certainly it clears some of the froth. We've seen that in emerging markets. We've seen it here. But it's hard to argue that at this point there isn't kind of a full spectrum of good news priced into a lot of these names.

That doesn't mean the fundamentals are necessarily destined to stumble, but it does suggest that maybe the prices fully reflect everything that we've seen thus far and some of the good news still to come. The case study of that is probably SK Highix, right? It's a stock that was up 150% year to date, but has pulled back 50% since its June high in part because of all of the factors you've just um outlaid. Demand is still there on the AI side. that that seems the the status quo.

Yes, it seems as though the demand is still there. It seems as though when we're looking at the spending, which is really the driving force around AI, that is very much intact. And I think one of the best ways that this has been described to me is looking at the spending as almost a hedge for these businesses. AI is an existential risk and they need to participate in order to protect their businesses. And that doesn't necessarily seem to change regardless of what happens to yields and really what regardless of what happens to their short-term price movements.

The US Treasury's decision to boost buybacks at the long end has been a big catalyst in in the short term. Could you help our audience understand the impacts of that?

Well, it's it's so fascinating, right? Because when we look at the move in yields over the course of 2026, I think if we're just reading the headlines, we would naturally assume that the move higher in yields relates entirely to inflationary concerns. And yet when we look at break evens, those have been largely contained at least point to point from the start of the year. But what's really moved is those real yields.

And that's a amalgamation, right, of of of drivers. That's the term premium. That's supply demand considerations. that's a move in in uh potential uncertainty around the path of real rates. So that move is something that I think everyone is watching very closely and it's been interesting to see how the Treasury has stepped in and yet it really feels more like a short-term solution to problems that are much more secular and long-term in nature.

So you have to wonder how much is this really going to impact things longer term. It's interesting because there's a recognition in the markets and in the economy of of inflation concern and and I go back to what we learned in earnings um at the beginn