Alibaba Group Holding Limited (NYSE:BABA) is looking to streamline its logistics and autonomous driving footprint, while its cloud and AI momentum continues to support investor optimism.
$2 billion self-driving delivery giant
Alibaba is merging its logistics arm’s autonomous driving unit with a Chinese robovan company in a deal that would value the combined business at about $2 billion, the Wall Street Journal reports. reported on Thursday.
Under the deal, Alibaba’s Cainiao unit will acquire a stake in robovan specialist Zelos Technology, which will operate the merged entity.
Alibaba’s unmanned vehicle business, currently based in Cainiao, its e-commerce logistics subsidiary, will be merged into Zelos, the report said, citing sources familiar with the matter.
Cainiao Robovan will continue to operate as a standalone brand after the merger, and a Cainiao executive will serve on Zelos’ board.
Strong stock performance supported by gains
Alibaba shares are up 81% over the past twelve months, driven by momentum in its cloud and AI businesses, in addition to the stabilization of core e-commerce.
The Chinese e-commerce giant reported second-quarter results on November 25 that exceeded expectations.
It generated revenue of $34.81 billion, up 5% year over year and above the consensus estimate of $34.43 billion.
On a comparable basis, turnover would have increased by 15%, after excluding the divested activities.
Adjusted earnings were 61 cents per ADS, ahead of the estimate of 49 cents.
At the same time, heavier investments weighed on profitability.
Adjusted net income fell 72% to $1.45 billion, and adjusted EBITA fell 78% to $1.27 billion, as Alibaba ramped up spending on high-speed commerce, user experience upgrades, acquisitions and technology.
Cloud, AI and Analyst Trust
Chinese e-commerce sales rose 16% to $18.62 billion, supported by faster adoption of Tmall brands and stronger demand for fast commerce.
International trade revenue rose 10% to $4.89 billion, driven by AliExpress’s expansion of local inventory.
The Cloud Intelligence Group posted 34% revenue growth to $5.59 billion, driven by demand for public clouds and accelerated AI adoption.
Nomura remains optimistic about Alibaba’s AI journey, highlighting faster innovation in China’s tech sector.
Analyst Shi Jialong said Alibaba could benefit from increasing AI adoption and a growing number of use cases.
BABA price promotion: Alibaba shares rose 0.93% to $177.30 in premarket trading on Thursday, according to data from Benzinga Pro.
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