Alibaba (BABA) stock dropped as much as 4% in premarket trading Wednesday after the company reported an 84% plunge in core profitability for the March quarter, even as its cloud and AI businesses posted strong growth.
$BABA Q4'26 EARNINGS HIGHLIGHTS
Revenue: $35.28B (Est $35.8B)
; +3% YoY
Segment Performance:
— Wall St Engine (@wallstengine) May 13, 2026
Adjusted EBITA came in at 5.1 billion yuan ($750.9 million), down sharply from a year ago. The metric strips out one-time items to reflect the health of the core business.
Total revenue for the quarter ended March 31 came in at 243.4 billion yuan — a 3% rise year-on-year, but just below the 247.1 billion yuan consensus estimate. Excluding divested businesses Sun Art and Intime, revenue grew 11% on a like-for-like basis.
Alibaba Group Holding Limited, BABA
Shares initially ticked higher in premarket trade before reversing course and settling around 1.3% to 2% lower.
Heavy investment is the headline story here. Alibaba has been pouring money into semiconductors, data centers, its Qwen family of AI models, and quick commerce — a rapid delivery service that promises sub-one-hour shipping.
The cloud unit was the standout. Revenue from the Cloud Intelligence Group jumped 38% year-on-year to 41.6 billion yuan, beating analyst estimates of 41.27 billion yuan. Adjusted EBITA for the segment climbed 57%.
AI-related product revenue reached 8.97 billion yuan. That marks eleven consecutive quarters of triple-digit year-on-year growth. CFO Toby Xu called it a direct result of the company’s strategic investments.
“Cloud Intelligence Group’s revenue continued to accelerate, with AI-related product revenue achieving triple-digit growth for the eleventh consecutive quarter,” Xu said.
Alibaba’s Qwen AI models are considered among the top-performing globally. This week, Alibaba said it would launch a Qwen-powered shopping assistant inside Taobao, its flagship e-commerce app.
The domestic e-commerce story is more complicated. Revenue in the China e-commerce segment came in at 122.22 billion yuan, ahead of the 119.85 billion yuan analysts expected. Customer management revenue — the largest single contributor — grew 1%.
But profitability in that segment took a hit. Adjusted EBITA dropped 40% year-on-year as investment costs mounted.
Quick commerce was a bright spot within that pressure. Revenue from the service grew 57% year-on-year, reflecting strong consumer uptake. The category has become a key battleground among China’s e-commerce players.
A fresh round of government subsidies encouraging consumers to trade in electronic goods gave China’s e-commerce sector a boost in the quarter.
Alibaba’s board approved an annual cash dividend of $0.13125 per ordinary share, or $1.05 per American depositary share, payable to shareholders of record as of June 11.
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