Alibaba Group Holding Limited reported a stunning collapse in core profitability for its Q4 FY26, with adjusted EBITA plunging 84% year-on-year to just 5.1 billion yuan ($750.9 million). The Chinese e-commerce and cloud giant, which is not a cryptocurrency but is frequently tracked by crypto investors monitoring tech and consumer trends, saw its stock fall as much as 4% in premarket trading before settling about 1.3%–2% lower on May 13.
Total revenue came in at 243.4 billion yuan, a 3% increase from a year earlier but below the 247.1 billion yuan consensus—or $35.28 billion versus an estimated $35.8 billion. On a like-for-like basis excluding divested businesses, revenue growth was 11%. The sharp profit contraction was driven by heavy investments in AI infrastructure, semiconductors, data centers, and the loss-making quick-commerce delivery segment, which is embroiled in a price war with JD.com and Meituan.
In stark contrast, the Cloud Intelligence Group thrived. Cloud revenue jumped 38% to 41.6 billion yuan, beating the 41.27 billion yuan analyst forecast, with AI-related product revenue reaching 8.97 billion yuan—marking eleven consecutive quarters of triple-digit year-on-year growth. CFO Toby Xu credited strategic investments for the cloud acceleration. Alibaba’s Qwen AI model is gaining traction, and a new Qwen-powered shopping assistant is being launched inside the Taobao app.
Domestic e-commerce revenue was 122.22 billion yuan, edging past the 119.85 billion yuan estimate, but adjusted EBITA within the segment tumbled 40% due to investment costs. Quick commerce revenue surged 57%, reflecting consumer uptake amid intense competition. Government subsidies for electronics trade-ins provided a modest lift. The board approved a $1.05 per ADS annual cash dividend.
Wall Street analysts remain largely constructive. Morgan Stanley highlights Alibaba’s strengthening AI position, while Benchmark’s Fawne Jiang maintains a $220 price target, calling AI a “durable multi-year growth driver.” Options markets had priced a 6.88% post-earnings swing, and the stock is down about 6% year-to-date trading around $136.88 pre-results.
