Alibaba shares fall 41% as earnings recovery slows amid rising cloud investment costs

Alibaba Group's stock has dropped 41% from its 2025 peak due to slower-than-expected earnings recovery and increasing capital expenditure, especially from AI and cloud investments. Despite a 9% revenue growth in Q1 driven by China Quick Commerce and Cloud services, traditional e-commerce declined. Alibaba is shifting focus from mature e-commerce to high-margin cloud services, aiming for significant data center expansion and 1 trillion RMB cloud revenue by 2032. The company's strong balance sheet and low valuation suggest potential for future profitability and margin improvement despite high spending needs.

Following Alibaba's strategic pivot to cloud services and AI investments, its stock is currently trading at USD 109.35 on Pluang as of Oct 15, 2026, 18:01 WIB, down 1.64% for the day. The company's market cap stands at $280.20 billion, reflecting investor caution amid ongoing capital expenditure. Pluang data also shows a typical hold time of 112 days and a dividend yield of 0.94%, with order activity skewed towards selling at 71%.