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Alibaba Group Holding Limited (BABA) is set to report its second-quarter fiscal 2026 results on November 25, 2023. The Zacks Consensus Estimate forecasts revenues of $34.43 billion, indicating a 2.17% year-over-year increase, but earnings are predicted at 66 cents per share, reflecting a 69.3% decline from the same period last year.
Alibaba faces challenging conditions, with China’s CPI falling 0.4% year-over-year in August and 0.3% in September, highlighting weak consumer demand. Competition, particularly from PDD Holdings, is leading to price wars that could further squeeze Alibaba’s margins. Despite a strong performance in the Cloud Intelligence Group, significant investments in AI infrastructure and quick commerce are likely to strain profitability.
Year-to-date, BABA shares have increased by 80.8%, outperforming the S&P 500 index, while facing intense competition from firms like Amazon and JD.com. The company’s current valuation shows a forward P/S ratio of 2.36X, higher than the industry average of 2.26X. Investors are advised to remain cautious ahead of the earnings report.
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