On May 15, Alibaba fell 3.25% overnight, trading at $136.65/share, with trading volume of $34.66 million. The pullback followed an initial post-earnings surge of over 8%, as investors reassessed the heavy toll of AI investment on near-term profitability.
Alibaba released its fiscal year 2026 Q4 results on May 13, reporting total revenue of 243.38 billion RMB, up 3% year-over-year (11% on a like-for-like basis excluding divested businesses). Cloud intelligence revenue reached 41.63 billion RMB, up 38%, with AI-related product revenue hitting 8.97 billion RMB — marking the 11th consecutive quarter of triple-digit growth and surpassing 30% of external cloud revenue for the first time. CEO Wu Yongming projected AI model and application service ARR would exceed 10 billion RMB by June and 30 billion RMB by year-end.
However, adjusted EBITA plunged 84% year-over-year to 5.1 billion RMB, a five-year low, weighed down by aggressive spending on AI infrastructure, instant retail, and the Qwen app. Non-GAAP net profit fell to near zero at 86 million RMB. Free cash flow turned negative at -17.3 billion RMB. The divergence between accelerating AI revenue and deteriorating profitability appears to have triggered profit-taking after the initial earnings rally.
(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)
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