HONG KONG, March 19, 2026, 19:56 HKT
Alibaba shares slipped Thursday, with the Chinese tech giant’s latest results missing Wall Street’s revenue and net income forecasts. Swift gains in cloud and AI haven’t yet mended margin pressure in the company’s main commerce segment. U.S.-listed ADRs dropped around 1.6% ahead of the open.
The miss comes at a tough time for Alibaba. The company is pitching its AI push as a future growth driver, but for now, soft demand in China and costly one-hour delivery competition are squeezing the core retail business—still Alibaba’s main revenue source. Over at Tencent, things looked brighter this week: stronger growth, along with plans to ramp up its own AI spending.
Alibaba posted revenue of 284.84 billion yuan for the quarter ended Dec. 31, a roughly 2% rise from a year ago that still missed analyst forecasts. Net income fell sharply, down 66% to 15.63 billion yuan. The company pointed to heavier spending on quick commerce, user experience, and tech as the main reasons for the profit slump. Stripping out the impact from the sold Sun Art and Intime chains, underlying revenue would have climbed 9%.
Cloud stood out. The Cloud Intelligence Group’s revenue jumped 36%, and for the tenth quarter in a row, AI-related product sales posted triple-digit gains. “AI is and will continue to be one of our primary growth engines,” Chief Executive Eddie Wu said. data.alibabagroup.com
Alibaba is wasting no time trying to capitalize on that momentum. The company this week carved out its AI operations from the cloud division, forming the new Alibaba Token Hub. On Tuesday, it also rolled out Wukong, a platform designed for AI agents capable of handling multi-step actions—not just basic prompt replies.
Alibaba is rolling the model into a range of its platforms, covering everything from shopping and travel to food delivery. In February, the company reported its consumer-facing Qwen had surpassed 300 million monthly active users. Brian Wong, who previously worked at Alibaba and wrote The Tao of Alibaba, noted the ecosystem might soon allow users to handle much of their daily business “one text box” at a time. data.alibabagroup.com
This is the part investors are drawn to. Over in commerce, though, things get tougher: Reuters said Alibaba and JD.com ramped up spending on discounts and speedier delivery, trying to fend off Meituan in the quarter. But Singles’ Day — China’s largest online shopping event — saw hesitant consumers and only a lukewarm turnout.
Alibaba reported that Taobao Instant Commerce continued to grow, with CFO Toby Xu highlighting steady gains in unit economics. Still, free cash flow plunged 71% to 11.35 billion yuan. Xu pointed to the firm’s “strong liquidity position and resilient cash generation” as support for ongoing strategic investments. data.alibabagroup.com
Other risks are also surfacing. Morningstar’s Chelsey Tam flagged this week that a string of senior exits at Qwen has sparked doubts about staff morale and whether the company can hang on to its talent. “Top AI talent is scarce,” she noted. Reuters
Right now, investors look like they’re waiting for AI to make a bigger dent in company earnings, rather than just boosting cloud numbers or app activity. So Alibaba shares are balancing two points: the company stands out as a major AI player in China, but it’s also burning through cash to keep its footing in a sluggish market.
