Alibaba Reports Declining Profits Amidst Price War
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 19 2026
0mins
Should l Buy BABA?
Source: Fool
- Weak Revenue Growth: Alibaba's revenue for the December quarter rose only 2%, or 9% excluding divested businesses, reaching $40.7 billion, indicating insufficient growth momentum amid fierce market competition, which could impact future market share.
- Significant Profit Decline: Adjusted EBITA fell 57% to $3.35 billion, and adjusted EPS dropped 67% to $0.13, reflecting immense profit pressure from the price war with JD.com and Meituan, potentially leading to decreased investor confidence.
- AI Strategy Paying Off: Alibaba's AI chatbot Qwen has reached 300 million monthly active users, and its cloud intelligence segment reported a 36% revenue increase to $6.2 billion, suggesting that the company's investments in AI are starting to yield returns, which may drive overall business growth in the future.
- Ongoing E-commerce Challenges: While the quick commerce segment showed promise, the e-commerce division only grew 6% to $22.8 billion, with core e-commerce lines flat, highlighting the persistent consumer weakness and demand issues in the Chinese e-commerce market, which could affect the company's long-term strategic positioning.
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Analyst Views on BABA
Wall Street analysts forecast BABA stock price to rise
15 Analyst Rating
15 Buy
0 Hold
0 Sell
Strong Buy
Current: 125.410
Low
180.00
Averages
203.09
High
230.00
Current: 125.410
Low
180.00
Averages
203.09
High
230.00
About BABA
Alibaba Group Holding Ltd is an investment holding company mainly engaged in the provision of technology infrastructure and marketing platforms. The Company operates its business through nine segments. The China Commerce Retail segment is engaged in the China commerce retail business. The China Commerce Wholesale segment is mainly engaged in the operation of 1688.com. The Cloud Intelligence segment provides cloud services. The International Commerce Retail segment provides customer management services, sales of goods and logistics services. The International Commerce Wholesale segment is mainly engaged in the operation of Alibaba.com. The Cainiao Represents Logistics Services segment provides fulfilment services. The Local Services segment’s revenue includes platform commissions, logistics services revenue. The Digital Media and Entertainment segment engages in the operation of Youku and Alibaba. The All Others segment is mainly engaged in the Sun Art, Freshippo and other business.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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