Alibaba Group Holding Limited (NYSE: BABA) shares rose more than 12 percent in premarket trading on Thursday after the e-commerce company forecasted the full-year revenue growth that surprised investors and analysts.
The Hangzhou-based company now forecast revenue growth of 45 to 49 percent in the year ending March. Analysts polled by Bloomberg had average of estimates of 35 percent.
"The company will continue building its ecosystem based on data technology with core businesses supported by payment, logistics, data management platform and cloud," Jefferies analyst Jessie Guo wrote in an updated note to clients.
Shares of Alibaba jumped more than 12 percent in premarket trading. The stock had gained as much as 55 percent this year.
The Chinese e-commerce giant had spent billions of dollars to expand new business lines. The company are now operating new business, like cloud computing and digital entertainment, and expecting them to become the revenue growth drivers. At the same time, Alibaba still dominated the e-commerce market in China and tried to expanded to Southeast Asia by buying Lazada Group SA.
“Profitability is still not the priority for our cloud business,” Chief Financial Officer Maggie Wu said during the company’s annual investor-day conference Thursday. Alibaba wants to “quickly expand cloud leadership in coming quarters.”