China's Alibaba Group Holding Ltd beat Wall Street estimates for third-quarter revenue on Tuesday, as its e-commerce business benefited from a switch to online shopping triggered by the COVID-19 pandemic.

Revenue rose 37 percent to 221.08 billion yuan (US$34.24 billion) in the three months ended Dec 31, above estimates of 214.38 billion yuan, according to IBES data from Refinitiv.

READ MORE: Alibaba sales surge as people shop online during lockdown

Alibaba’s cloud division reported its first ever positive adjusted earnings before interest, tax and amortization, a milestone for the growing business

Net income attributable to shareholders rose 52 percent to 79 billion yuan. Alibaba has established a special taskforce to conduct internal reviews and is actively communicating with antitrust regulators on complying with their requirements, the company said in the earnings release.

“The business performance is strong and many feel the shares are undervalued compared to the roadmap and trajectory of some of their businesses,” Andy Halliwell, an analyst at technology consultancy Publicis Sapient, said in a research note after the earnings result. 

Alibaba’s cloud division reported its first ever positive adjusted earnings before interest, tax and amortization, a milestone for the growing business. Revenue for the segment rose 50 percent, driven by customers in the internet, retail and public sectors. Cainiao, its logistics unit, was also operating cash flow positive, the company said.

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Annual active consumers grew to 779 million in the December quarter, driving a 38 percent increase in its core commerce business. Alibaba booked US$75 billion of sales over its annual Singles’ Day promotions last November, easily beating its 2019 haul after the company began promotions early and added additional services to the count for the first time. The increased spending came even as overall retail sales fell 3.9 percent last year, with consumption lagging industrial activity in the broader economic recovery.