Alibaba on Wednesday said its core profitability plunged in the March quarter amid heavy investments in tech and e-commerce.

The Chinese tech giant said its adjusted earnings before interest, taxes, and amortization (EBITA), a measure of the company’s underlying profitability, came in at 5.1 billion Chinese yuan ($750.9 million).

This financial metric strips out one-time gains or losses to focus on a company’s core business.

Alibaba’s U.S.-listed shares were initially higher in premarket trade before turning negative. They were last seen trading down 3.4%.

The tech giant has been investing heavily in semiconductors for AI, data centers, and the development of its own family of models under the brand of Qwen. This has paid off in its cloud computing segment.

While cloud has been a bright spot for Alibaba, driven by AI demand in China, investors have been grappling with the company’s continued investments into so-called quick or instant commerce. This is a shopping service that allows users to get good with super-fast delivery speeds under an hour, and it has become somewhat of a battleground for China’s e-commerce giants.

Adjusted EBITA in Alibaba’s China e-commerce group dropped 40% year-on-year in the March quarter on the back of these investments, even as customer management revenue — its single-largest contributor — grew 1%.

However, Alibaba is seeing strong growth from those investments with quick commerce revenue up 57% year-on-year.

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