Alibaba Group’s 2025 Performance and 2026 Outlook
Alibaba Group (NYSE: BABA) wrapped up 2025 with significant advancements in its cloud and artificial intelligence (AI) sectors, while e-commerce showed signs of stabilization after pressure in previous years. The company’s cloud revenue saw sharp growth, with AI-related workloads contributing over 20% of its external cloud revenue, validating past investments. However, experts suggest that 2026 will be a critical year for Alibaba to transform this strategic momentum into sustainable profitability.
Key factors for Alibaba’s success in 2026 include demonstrating improved operating margins in its cloud segment, maintaining a self-sufficient e-commerce base without ongoing subsidies, reducing losses in quick commerce, and executing with greater focus and discipline. During the first half of 2025, Alibaba’s adjusted EBITA from its commerce division fell by 47% year-over-year, primarily due to high costs associated with quick commerce initiatives. Investors will be closely watching Alibaba’s ability to yield tangible results in these areas moving forward.
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