Why is Alibaba Group Holding Limited stock outperforming the market?

Alibaba Group Holding Limited (BABA) reported a mixed performance in the fiscal second quarter of 2024, with a 5% year-over-year revenue growth to $33.70 billion, surpassing the analyst consensus of $33.47 billion. This growth was driven by strong performances in international digital commerce and cloud services, which increased by 29% and 7%, respectively. However, adjusted earnings per American Depositary Share (ADS) were $2.15, falling short of the $2.26 consensus estimate, and adjusted net income decreased by 9% year-over-year to $5.20 billion. The company's free cash flow also saw a significant decline of 70% year-over-year to $1.96 billion, attributed to strategic investments. In response to these challenges, Alibaba has implemented significant corporate restructuring, consolidating its domestic and international e-commerce operations into the Alibaba E-commerce Business Group under Jiang Fan's leadership. This reorganization aims to enhance operational efficiency and synergies. Alibaba plans to raise up to $5 billion through a bond sale to repay existing debt and support a stock buyback initiative, having already repurchased $4.1 billion worth of shares in the third quarter, reducing its outstanding share count by 2.1%. Analyst sentiment remains stable, with several analysts maintaining or raising their ratings and price targets, reflecting confidence in Alibaba's strategic direction despite mixed earnings performance. Overall, Alibaba's market performance indicates a balance of strategic growth initiatives, financial management, and market challenges.