Alibaba and Tencent Lose $66 Billion in Market Value Amid AI Profitability Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 20 2026
0mins
Should l Buy BABA?
Source: Yahoo Finance
- Market Value Loss: Alibaba and Tencent collectively lost about $66 billion in market value as investors began questioning when AI will start generating profits, leading to Alibaba's stock dropping 7.3%, marking its largest decline since October.
- Spending Commitments: Alibaba has committed over $53 billion to AI, while U.S. companies like Amazon and Meta are expected to spend around $650 billion by 2026, indicating long-term confidence in AI, yet short-term profitability concerns are rising.
- Poor Financial Performance: Alibaba's latest earnings report revealed only a 1.7% revenue increase to RMB 284.8 billion, missing estimates, while net income plummeted by 67%, complicating the justification for aggressive spending amid pressure on its core business.
- Severe Market Reaction: The stock prices of Alibaba and Tencent reacted sharply, particularly in the Hong Kong market, where Alibaba's significant drop reflects investors' urgent focus on the returns of AI investments, potentially impacting future investment decisions.
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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: 141.120
Low
180.00
Averages
203.09
High
230.00
Current: 141.120
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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