Key Points
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The U.S. government is considering limits on AI chip exports to Chinese companies.
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Alibaba’s third-quarter fiscal results for 2026 fell short of analyst expectations.
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In March, Alibaba’s stock dropped nearly 13% amid these developments.
Alibaba Group (NYSE: BABA) faced significant setbacks in March as reports emerged that the U.S. government is contemplating export limits on AI accelerator chips, specifically targeting Nvidia and AMD products. This potential restriction could severely impact Alibaba, which is heavily investing in AI technologies.
In its fiscal third-quarter report, released towards the end of March, Alibaba reported a revenue of 285 billion yuan ($41.4 billion), a 2% increase year-over-year. However, net income plummeted by 67% to 16.7 billion yuan ($2.4 billion), significantly below the consensus estimates of 289.7 billion yuan ($42.1 billion) in revenue and 10.94 yuan ($1.59) per American Depositary Share (ADS) in earnings.
