Alibaba Group (BABA) has agreed to sell its gaming division, Lingxi Games, to Asian private equity firm Trustar Capital for over $1.5 billion as part of a strategic shift towards artificial intelligence (AI). This development is aimed at refocusing company resources under CEO Eddie Wu, who is also targeting $100 billion in AI revenues over the next five years.
In the latest fiscal results, Alibaba reported a year-over-year revenue increase of 11%, with its Cloud Intelligence Group witnessing a 40% growth in external revenue. The company ended fiscal 2026 with approximately $38 billion in net cash and approved an annual dividend of $1.05 per American Depositary Share (ADS), indicating strong financial health despite a 15.5% decline in share price year-to-date. Investors are faced with a valuation reset as the company’s stock currently trades at a trailing Price/Earnings ratio of 39.18 compared to the sector’s 29.47.
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