Alibaba stock is falling as it spends heavily on AI. CEO Eddie Wu insists the tech will be its main growth driver

A significant downturn in profit is one of multiple disappointments in the Chinese technology company’s latest financial results.

[Source Images: Alibaba and Pixabay]

Alibaba’s net income fell 66% year-over-year (YOY) for 2025’s fourth quarter while it invested heavily in AI.

In total, net income dropped from 46.4 billion Chinese yuan ($6.8 billion) to 15.6 billion Chinese yuan ($2.27 billion).

The downturn is one of multiple disappointments in the Chinese technology giant’s latest financial results, announced Thursday, March 19. Alibaba also reported a 71% decrease in diluted earnings per share YOY. 

Higher cloud revenue, but not high enough

Even Alibaba’s revenue, which rose 2% YOY, failed to meet expectations.

The company reached 284.8 billion Chinese yuan ($41.4 billion) in revenue for quarter four, falling short of Wall Street’s predicted 290.7 billion Chinese yuan ($42.3 billion), according to consensus estimates cited by CNBC. 

As of publication, U.S.-listed shares of Alibaba Group Holding Ltd (NYSE: BABA) were down more than 4% in premarket trading on Thursday. The stock is down more than 13% in 2026 so far.  

The small revenue increase was led by the company’s Cloud Intelligence Group, which rose 36% YOY. 

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