BABA
Cloud is cooking… but so is the bill
Alibaba just served up a classic “good news, bad news” earnings plate. Revenue for fiscal Q4 2026 rose 3% to $35.28 billion, a hair above Wall Street’s guess, and the cloud business ripped 38% higher thanks to AI demand.
But then came the part that makes investors squint at the screen.
Earnings took the express elevator down
Adjusted earnings per ADS came in at just 9 cents, way below the $1.12 analysts were expecting. Adjusted net income basically vanished to $12 million, and adjusted EBITA fell 84% as Alibaba poured more cash into AI, Taobao Instant Commerce, and product upgrades.
That’s the market’s problem in one sentence: the company is growing, but it’s paying up for that growth like it found the premium aisle at the airport.
Why the AI story still matters
The silver lining is that Alibaba isn’t throwing money into a black hole for fun. Management says AI-related product revenue has now logged its 11th straight quarter of triple-digit growth, and cloud revenue is getting a nice lift from public cloud and enterprise AI use cases.
A few things to keep on your radar:
- Cloud Intelligence revenue jumped 38%
- China commerce revenue rose 6%
- International commerce also grew 6% while losses narrowed
- Free cash flow turned negative as investments ramped up
The investor takeaway
Alibaba is trying to become the AI infra-plus-commerce mashup that China’s market has been waiting for. That could be a great long-term story — if the company can keep the growth engine humming without torching too much profit along the way. For now, the stock is telling you the street wants proof, not just promises.
Big picture: Alibaba’s AI bet is looking more real by the quarter, but this one still comes with a hefty price tag.