Alibaba's Core Profitability Declines Amid Heavy Investments
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 13 2026
0mins
Source: CNBC
Alibaba's stock fell 5.86% as it crossed below the 5-day SMA, reflecting investor concerns following disappointing earnings results.
The company reported a significant drop in core profitability for the March quarter, with adjusted EBITDA at 5.1 billion yuan ($750.9 million), indicating that heavy investments in technology and e-commerce are suppressing earnings. Although Alibaba's U.S.-listed shares initially rose in premarket trading, they turned negative, reflecting investor concerns about the company's earnings outlook. The substantial investments may yield long-term growth, but they have significantly impacted profitability in the short term, potentially eroding market confidence in the company's future performance.
This decline in profitability could lead analysts to reassess Alibaba's future prospects, as the market reacts to the company's ongoing investment strategy and its implications for financial health.
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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: 130.820
Low
180.00
Averages
203.09
High
230.00
Current: 130.820
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 four segments. The Alibaba China E-commerce Group segment is mainly engaged in E-commerce business, including operating Tmall Supermarket and Tmall Global, providing customer management services, product sales, as well as logistics services. It also operates quick commerce business such as Taobao Instant Commerce and Ele.me, as well as the China commerce wholesale business through 1688.com. The Alibaba International Digital Commerce Group segment is mainly engaged in international commerce retail and wholesale business, operating platforms such as AliExpress, Trendyol, Lazada and Alibaba.com. The Cloud Intelligence Group segment mainly provides public and non-public cloud services. The Other segments primarily include the operations of Freshippo, Cainiao, Alibaba Health 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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