Alibaba Group (BABA) reported a significant decline in fourth-quarter and full-year results for fiscal 2026 on May 13, 2026. Non-GAAP net income for the March quarter fell drastically to RMB 86 million from RMB 29,847 million in the previous year. The company also recorded its first operating loss since 2021, amounting to RMB 848 million compared to an operating profit of RMB 28.5 billion a year earlier. Revenue saw a moderate increase of 3% year-over-year to RMB 243.38 billion.
As Alibaba continues to invest heavily in artificial intelligence, targeting AI-related products to make up over 50% of external cloud revenues within a year, concerns about profitability deepen. The Zacks Consensus Estimate for fiscal 2027 earnings is projected at $7.46 per share, a decrease of 4.2% in the last month. The company’s management confirmed ongoing capital expenditures, which have contributed to a 53% decrease in net cash from operating activities, falling to RMB 76.2 billion for the year.
Year-to-date, BABA shares dropped 3.7%, underperforming industry peers. As it faces mounting pressure from competitors like Amazon, Microsoft, and Google, analysts are recommending investors consider selling, highlighting the risks associated with extended margin compression and negative free cash flow projections.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
