Alibaba (NYSE:BABA) reported strong growth in its cloud business for the fourth quarter, supported by rising demand for artificial intelligence services, while strategic shifts in its logistics arm weighed on overall revenue.

The tech giant’s cloud intelligence division saw revenue climb 18% year-over-year to 30.13 billion yuan ($4.15 billion), slightly ahead of analyst expectations. The growth reflects Alibaba’s ongoing push to invest heavily in AI and cloud infrastructure over the coming years as it strengthens its position in emerging tech.

However, the company’s effort to streamline operations by integrating its logistics platform Cainiao into its broader e-commerce ecosystem led to a 12% drop in Cainiao revenue, which came in at 21.57 billion yuan ($2.97 billion). The restructuring weighed on the group’s total revenue, which rose 7% to 236.45 billion yuan ($32.58 billion), just shy of the 237.91 billion yuan consensus.

The report lands amid broader efforts by Beijing to stimulate the domestic economy, with policies aimed at boosting consumer activity and supporting the struggling real estate sector.

The company’s shares closed more than 7% lower today following the results.