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Alibaba reported a negative free cash flow of RMB 18.8 billion for the first quarter of fiscal 2026, a reversal from a positive RMB 17.4 billion a year prior. This decline was attributed to rising capital expenditures of RMB 38.7 billion, mainly focused on AI and cloud infrastructure. Despite this financial strain, Alibaba Cloud experienced mid-20s percent year-over-year growth, driven by AI services, while Taobao’s orders exceeded 80 million weekly and monthly active users rose to nearly 300 million.
The company plans to invest RMB 380 billion ($52 billion) over the next three years in AI infrastructure and data centers. The Zacks Consensus Estimate predicts a 4.38% revenue increase in fiscal 2026 and 11% in fiscal 2027. Though competition from AWS and Azure presents challenges, Alibaba’s current investments could help sustain long-term profitability.
In comparison, Microsoft aims to expand its cloud capabilities with a capital expenditure of $65 billion in fiscal 2025, projecting a 37% revenue growth in Azure. Meanwhile, Oracle anticipates 77% growth in its OCI segment for fiscal 2026, reflecting a strong demand for AI infrastructure.
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