By Adam Clark
Alibaba Group Holding stock was whipsawing early Wednesday as earnings showed a mixed picture around its artificial-intelligence progress and its core retail business.
Alibaba reported a fiscal fourth-quarter net profit of 23.50 billion yuan ($3.41 billion), nearly double from the same period a year earlier due to gains on investments. However, adjusted net income came to 86 million yuan, plummeting nearly 100% year-over-year.
Revenue rose 3% to 243.38 billion yuan from the same period a year earlier. Excluding revenue from disposed businesses, revenue on a like-for-like basis would have grown by 11% year-over-year.
"Alibaba's full-stack AI investments have progressed from incubation to commercialization at scale. This quarter, we achieved accelerated breakthroughs across models, cloud infrastructure, and applications," said Alibaba CEO Eddie Wu in a statement. "Cloud Intelligence Group's external revenue growth accelerated to 40%, with AI-related products accounting for 30% of this revenue."
Alibaba's American depositary receipts were down 0.7% in premarket trading, after initially gaining on the report.
Alibaba and rivals JD.com and Meituan have been waging a price war, especially in food delivery, which has hampered profits across the Chinese internet sector even as revenue rises.
JD reported its own earnings on Monday, showing growing profit for its core retail business despite the fierce food-delivery competition.
Investors are watching to see how quickly Alibaba can reduce its quick-commerce losses -- including its food-delivery business -- and how fast AI spending and revenue are increasing.
"While near term investment may pressure underlying margins, we view AI as a durable multi year growth driver supporting both revenue growth and longer term margin expansion for Alibaba," Benchmark Research analyst Fawne Jiang wrote in a recent research note before the earnings report.
Jiang has a Buy rating and $220 target price on Alibaba's American depositary receipts.
Write to Adam Clark at adam.clark@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 13, 2026 05:57 ET (09:57 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
