Alibaba Group is set to report fiscal first-quarter results before U.S. markets open on Thursday, with investors focused on whether accelerating artificial-intelligence and cloud momentum can break a streak of four consecutive earnings-per-share misses and offset softer Chinese consumer spending.
Analysts polled by FactSet expect revenue of 266.78 billion yuan, up from 247.65 billion yuan a year earlier, while net profit is forecast to fall sharply to 21.8 billion yuan from 43.12 billion yuan. UBS and Jefferies project about 9% group revenue growth, up from 3% in the prior quarter, with UBS forecasting cloud revenue growth near 45%.
Cloud computing is the central metric. Alibaba Cloud held an estimated 37% share of China's cloud market in the fourth quarter of 2025, well ahead of Huawei at 17% and Tencent at 10%, according to Omdia. In the previous update, external cloud revenue growth accelerated to 40%, while AI-related product revenue delivered triple-digit growth for an 11th consecutive quarter.
Morgan Stanley analyst Gary Yu expects cloud growth of about 45% year on year, with margins improving toward 11%. Citigroup's Alicia Yap also forecasts roughly 45% cloud growth and cloud margins near 11.5%, while JPMorgan's Alex Yao said results may come in 'better than feared' because of narrower quick-commerce losses and improving cloud profitability.
The stock has surged 36% in Hong Kong this quarter, its best quarterly outperformance against Tencent since early 2025, though U.S.-listed ADRs remain down around 13% year to date. Options markets were pricing an earnings move of about 6%, below the six-quarter average realized move of 7.6%.
The main tension is that Alibaba's commerce business remains larger than cloud, leaving the group exposed to weak Chinese consumption. JD.com recently reported its first quarterly revenue decline in more than a decade, while analysts flagged pressure on Alibaba's customer-management revenue after subdued retail sales and the 6.18 shopping festival.
Barclays has positioned for upside, citing accelerating cloud growth, AI recurring revenue exceeding targets, faster improvement in quick-commerce losses and stabilizing core-commerce profitability. Alibaba has also agreed to sell its Lingxi Games unit to Trustar Capital for at least $1.5 billion, freeing capital for further AI investment.
