Alibaba's ( BABA ) US-listed stock surged nearly 13% early Thursday after the Chinese tech giant reported quarterly earnings ahead of Wall Street's expectations and highlighted an aggressive push into the artificial intelligence space.

Alibaba reported adjusted earnings per share of RMB 20.39 ($2.79) versus the 19.12 yuan ($2.63) expected, while its quarterly revenue was RMB 280.2 billion ($38.4 billion) versus the 277.4 billion yuan ($38.2 billion) expected, according to Bloomberg consensus estimates.

"Our AI momentum remains robust with AI-related product revenue sustaining triple-digit growth for the sixth consecutive quarter,” Alibaba CFO Toby Xu told analysts on a call Thursday morning.

Alibaba stock has surged roughly 48% over the past month as a new AI model from Chinese firm DeepSeek raised optimism for future demand for its AI cloud products . The tech giant has reportedly expressed interest in directly investing in DeepSeek . The company is also reportedly partnering with Apple ( AAPL ) to bring AI features to its iPhones in China.

Still, the company's cloud unit accounts for a slimmer share of revenue than its e-commerce division, rising 13% in its fiscal third quarter (the December period) to RMB 31.7 billion ($4.3 billion). Alibaba's e-commerce division, on the other hand, reported revenue of RMB 100.8 billion ($13.8 billion).

CEO Eddie Wu said in a statement, "Looking ahead, revenue growth at Cloud Intelligence Group driven by AI will continue to accelerate."

As part of its AI strategy, the company announced it will aggressively ramp up its capital expenditures: "The AI era presents a clear and massive demand for infrastructure. We will aggressively invest in AI infrastructure," Wu said on the call with analysts. "Our planned investment in cloud and AI infrastructure over the next three years is set to exceed what we have spent over the past decade."

Responding to an analyst question, Alibaba management contended that the aggressive investment approach could affect profitability in the short term.

"This next three-year period [w]ill likely be the single period in which we'll be making the most concentrated and highest level of investments in building out our cloud and AI-related infrastructure. And, of course, the hardware infrastructure will have an impact," Wu said, adding, "Behind that is our expectation of huge demand."

Still, like American tech giants, the details about how that infrastructure will be monetized only went so far: "The future business models and the future ways in which these models will be monetized are not necessarily clear to anybody today," Wu said.