Alibaba Group Holding Ltd. (BABA) missed revenue expectations for the fiscal third quarter ended Dec. 31, 2025, as revenue fell short while cloud revenue and AI products showed strong growth. Investments in rapid e-commerce delivery weighed on profits.

Alibaba reported revenue of 284.8 billion Chinese yuan ($41.4 billion), below the 290.7 billion yuan analysts expected. Net income declined 66% year-over-year. The company’s costly shift to rapid e-commerce delivery contributed to the earnings shortfall.

Cloud and AI Drive Growth Amid Margin Pressure

Alibaba cloud revenue rose 36% year-over-year, while earnings before interest, taxes, and amortization (EBITA) increased 25%. AI-related products delivered triple-digit growth. International commerce and quick-commerce segments also recorded high growth rates.

The contrast between strong cloud and AI expansion and margin pressure from delivery investments will influence investors’ views on Alibaba’s near-term profitability and strategic trade-offs.

Alibaba is undergoing a strategic shift from traditional e-commerce to quick commerce and AI, with elevated spending likely to persist in the near term. 3Q FY2025 results showed flat growth in traditional e-commerce and margin contraction, while quick commerce and cloud remained strong. Quick commerce is not expected to be profitable until FY2027 and is targeting RMB 1 trillion in GMV by 2028.

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BABA's weak fiscal Q3 shows collapsing margins, heavy spending and rising risks, raising doubts about its turnaround as profitability pressures mount.

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Alibaba generated 2% revenue growth in its most recent quarter, and its earnings fell by 66%. The company, however, says that revenue from artificial intelligence (AI) products doubled for a 10th straight quarter.

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Alibaba's e-commerce business is stabilizing but unlikely to return to hypergrowth. AI demand is rapidly accelerating Alibaba's cloud business.

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Alibaba is seeing strong cloud computing growth, but it's a much smaller segment compared to its e-commerce operations. Meanwhile, its e-commerce business continues to deal with a competitive landscape.

Is Alibaba Stock a Rebound Candidate?

Alibaba Group (BABA) upgraded to Strong Buy, driven by rapid agentic AI adoption and heavy investment in instant commerce and cloud. Short-term profitability and cash flow declines reflect strategic reinvestment, not operational deterioration, supported by $80 billion liquidity. BABA's AI + Cloud segment grew 36% YoY, with ambitions to reach $100 billion revenue in five years, implying a 32% CAGR.

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Alibaba's profits plunged 66% year over year in its latest quarter. However, the bottom-line deterioration was due to increased technology investments that could pay off handsomely.

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Alibaba Group Holding Limited shares dropped 7% after Q3'26 earnings, reflecting a temporary earnings dip due to heavy investment in AI and Cloud initiatives. I remain bullish on BABA, highlighting long-term growth potential in the Cloud Intelligence Group, which saw 36% Y/Y growth and accelerating momentum in Q3'26. Despite a slowdown in core e-Commerce (6% Y/Y growth), BABA remains profitable on an EBITA and free cash flow basis and trades at a cheap 14.3X forward P/E.

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BABA's Q3 earnings miss estimates as heavy AI and commerce investments hit margins, despite rising revenues and strong cloud and quick commerce growth.

Alibaba Q3 Earnings Miss Estimates, Revenues Rise Y/Y

Alibaba Group Holding Ltd (NYSE:BABA) reported Q3 FY2026 earnings on March 19, 2026, and the results handed Wall Street a genuinely difficult read: non-GAAP net income fell 67% year-over-year to $2.39 billion while Cloud Intelligence Group revenue accelerated 36% to $6.19 billion.

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Alibaba (BABA) reported Q3 FY2026 revenue of RMB284.8bn (+1.7% YoY), missing estimates, with adjusted net profit down 67% YoY due to heavy investments. I remain bullish on BABA, citing e-commerce growth re-acceleration, improving quick commerce unit economics, and Alicloud revenue acceleration from surging AI token demand. BABA's full-stack AI capabilities, proprietary silicon, and foundational models position it as China's AI and local commerce leader, mirroring Google's ecosystem.

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When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Is It Worth Investing in Alibaba (BABA) Based on Wall Street's Bullish Views?

Alibaba Group Holding Ltd. (NYSE: BABA) on Thursday posted weak fiscal third-quarter results.

These Analysts Slash Their Forecasts On Alibaba Following Weak Q3 Results

Alibaba Group reported a significant Q3 earnings miss, with GAAP net income down 66% YoY and non-GAAP EPS missing consensus by the largest margin in years. BABA's Cloud Intelligence Group delivered 36% YoY sales growth and sustained triple-digit AI product revenue growth, supporting a bullish long-term thesis despite near-term FCF and margin pressure. Heavy investment in AI and cloud is expected to unlock operating leverage and margin expansion, with management targeting $100B in combined cloud and AI revenue over five years.

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Alibaba has sharply reduced its workforce as it restructures its business and intensifies its focus on artificial intelligence. The Chinese e-commerce and technology group ended December with 128,197 employees, down from 194,320 a year earlier, marking a decline of about 34% year over year.

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Alibaba ended December last year with 128,197 employees, down from 194,320 from a year earlier. Its workforce fell sharply after it sold its offline retail businesses in Sun Art and Intime.

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Alibaba Group saw growth across both its cloud and eCommerce segments during the quarter ended Dec. 31, according to a Thursday (March 19) earnings release. Overall, the company saw year-over-year revenue growth of 2%.

Alibaba AI Adoption Drives 36% Cloud Growth

Alibaba missed Q3 FY2026 top and bottom line estimates, with revenue up 2% y/y and non-GAAP EPS down 67% y/y. Profitability is temporarily compressed by aggressive investments in Quick Commerce (+56% y/y revenue) and AI + Cloud (+36% y/y revenue), both businesses showing strong sales momentum. Cloud Intelligence Group is increasingly profitable, with AI-related revenues growing at a triple-digit rate, positioning it as a potential future profit center.

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Alibaba's net income fell 66% year-over-year (YOY) for 2025's fourth quarter while it invested heavily in AI.

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Alibaba Group Holding Limited remains a Hold as its aggressive AI and cloud investments drive heavy cash burn and margin compression amid heightened competition. BABA's Cloud Intelligence revenue grew 36%, but this lags global peers and fails to offset weak overall revenue growth and a 74% drop in operating income. Valuation is unattractive: BABA trades at a forward P/E of 21.57 and PEG of 2.48, far richer than domestic competitors JD.com and PDD Holdings.

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Alibaba is seeing promising growth in AI with more than 300 million monthly users on its Qwen app. Its cloud business is growing briskly.

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AI is creating a massive new opportunity for cloud providers. Alibaba Cloud is emerging as a core AI infrastructure provider in China.

Something Big Is Brewing at Alibaba -- and Investors Should Pay Attention

Alibaba (NYSE: BABA) is under immense pressure this morning after posting its Q4 earnings that came in short of Street estimates as strategic investments triggered an alarming 66% decline in net income. Still, experts at First Eagle – a US-based investment firm – recommend long-term investors to load up on BABA on post-earnings weakness as its artificial intelligence (AI) business remains largely underappreciated.

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Alibaba (NYSE:BABA) stock is getting hit Thursday morning, with shares down 7% to the $125 area after the company reported earnings before the open.

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Alibaba Group (NYSE:BABA) reported weaker-than-expected results for its December quarter, as revenue fell short of forecasts and profits declined sharply, sending its US-listed shares down about 8%. For the quarter ended December 31, 2025, the company posted revenue of 284.8 billion yuan ($41.4 billion), below the 290.7 billion yuan expected by analysts.

Alibaba Group reports revenue miss for December quarter, shares fall

While Alibaba's cloud and AI units delivered another quarter of triple-digit growth, the company's costly pivot to rapid e-commerce delivery led to an earnings miss.

Alibaba's stock slips as a big drop in net income overshadows AI progress

Alibaba Group Holding Limited just reported a revenue and EPS miss, but high growth in AI, cloud, and international commerce segments. BABA stock sold off on these results pre-market, dropping as much as 5.6%. Alibaba Cloud revenue grew 36% and EBITA 25%, with even higher growth rates in international commerce and quick commerce.

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The Chinese tech giant reported fiscal third-quarter revenue and earnings below expectations.

Alibaba Stock Falls As Revenue Misses Estimates Despite AI Growth

The Chinese tech giant is zeroing in on making AI a key engine of growth, continuing to upgrade its Qwen model series and integrating it into its core ecosystem.

Alibaba's Profit Disappoints, but AI Outlook Bright

Alibaba reported it had missed revenue expectations in its December-quarter earnings. The company made 284.8 billion Chinese yuan ($41.4 billion), compared to the 290.7 billion Chinese yuan expected by analysts.

Alibaba revenue misses estimates in December quarter as net income drops 66%

HONG KONG--(BUSINESS WIRE)---- $BABA #alibaba--Alibaba Group Holding Limited today announced its financial results for the quarter ended December 31, 2025.

Alibaba Group Announces December Quarter 2025 Results

Alibaba missed revenue and earnings expectations, reporting $41.4 billion compared to $44.4 billion expected, causing a 5.6% stock drop. Despite this, the company saw high growth in AI, cloud, and international commerce segments, with cloud revenue up 36% and EBITA rising 25%.

Alibaba earnings miss in fiscal Q3 showed revenue shortfall while cloud revenue and AI growth accelerated, pressuring near-term margins and trading flows.

Alibaba Earnings Miss as Cloud and AI Grow

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Alibaba Earnings Miss as Cloud and AI Grow

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Q3 Revenue and Profit Decline

Cloud and AI Drive Growth Amid Margin Pressure

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