Alibaba Shares Slide After Profit Miss

Alibaba shares dropped 5% in U.S. premarket trading on Thursday after the Chinese e-commerce giant missed expectations for both revenue and profit in its fiscal fourth quarter. 

Revenue came in at $32.6 billion, narrowly missing forecasts. However, net income was as low as half of what analysts had anticipated. Even so, net income was up a steep 279% year-on-year, helped by higher operating income and revaluations of equity investments, though offset by subsidiary disposals.

The company also reached a strategic milestone as it officially became dual-primary listed on both the Hong Kong and New York stock exchanges. 

Despite weaker earnings, Alibaba’s core Taobao and Tmall division delivered a 9% revenue lift, supported by a 12% jump in customer management revenues. The company expanded partnerships with platforms like Rednote to bolster Taobao shopping traffic, and is pushing "instant commerce" with one-hour deliveries to stay ahead of fierce competition from rivals like PDD and JD.com.

Meanwhile, Alibaba’s cloud business accelerated by 18% year-on-year, fueled by public cloud demand and AI adoption. The firm’s AI efforts continue to gain ground, with its Qwen 3 large language model powering new services like Quark and driving triple-digit AI-related revenue growth for the seventh straight quarter. 

What Does This Mean for Me?

The company’s optimism on cloud-based AI services remains strong even as China's broader economy suffers from volatility and lingering trade tensions with the U.S., though a recent suspension of tariffs offers some relief.