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 the autonomous-driving unit of its logistics arm with a Chinese robovan company in a deal that would value the combined business at about $2 billion, the Wall Street Journal reported on Thursday.

Under the deal, Alibaba’s Cainiao unit will take a stake in robovan specialist Zelos Technology, which will operate the merged entity.

Alibaba’s unmanned-vehicle business, currently housed within Cainiao, its e-commerce logistics subsidiary, will fold 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 take a seat on Zelos’s board.

Strong Stock Performance Backed By Earnings

Alibaba stock gained 81% in the last 12 months, driven by momentum in its Cloud and AI businesses, alongside stabilizing core e-commerce.

The Chinese e-commerce juggernaut reported fiscal second-quarter results on November 25 that exceeded expectations.

It generated $34.81 billion in revenue, up 5% year over year and above the $34.43 billion consensus estimate.

On a like-for-like basis, revenue would have increased 15% after excluding divested businesses.

Adjusted earnings reached 61 cents per ADS, topping the 49-cent estimate.

At the same time, heavier investment weighed on profitability.

Adjusted net income fell 72% to $1.45 billion, and adjusted EBITA declined 78% to $1.27 billion as Alibaba stepped up spending on quick commerce, user experience upgrades, acquisitions, and technology.

Cloud, AI, And Analyst Confidence

China e-commerce revenue rose 16% to $18.62 billion, supported by faster onboarding of Tmall brands and stronger quick-commerce demand.

International commerce revenue increased 10% to $4.89 billion, driven by AliExpress’ expansion of local inventory.

The Cloud Intelligence Group posted 34% revenue growth to $5.59 billion, driven by public cloud demand and accelerating AI adoption.

Nomura remains optimistic about Alibaba’s AI trajectory, highlighting faster innovation across China’s technology sector.

Analyst Shi Jialong said Alibaba stands to benefit from rising AI adoption and a growing range of use cases.

BABA Price Action: Alibaba shares were up 0.93% at $177.30 during premarket trading on Thursday, according to Benzinga Pro data.

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