Shares of Alibaba Group Holding Ltd. surged nearly 8% on Wednesday, reaching $145.47, after the company announced it expects to exceed its initial 380 billion yuan (approximately $55.96 billion) artificial intelligence investment target. CEO Eddie Wu highlighted the promising returns from AI investments during a post-earnings call, noting that the company's Cloud Intelligence Group revenue rose 38% to 41.63 billion yuan (around $6.13 billion). Despite these gains, Alibaba's fourth-quarter profits fell short of expectations, with adjusted earnings dropping to 0.62 yuan per American Depository Share, significantly below the forecast of 5.79 yuan. Heavy investments in AI infrastructure and competition in the quick commerce sector have pressured profitability. However, Wu remains optimistic about improving margins and market leadership, projecting that AI products will soon account for over 50% of external cloud revenue. Meanwhile, Tencent Holdings Ltd. also reported mixed results, with revenue growth of 9% but missing analyst expectations. Tencent plans to double its AI spending this year as it faces increasing pressure from competitors.