Alibaba upgraded to Strong Buy after 16% drop post-Q1 earnings miss, AI Cloud revenue up 45% YoY.

Alibaba's stock fell 18% after missing Q1 earnings expectations, but this selloff is seen as overdone, leading to an upgrade to Strong Buy. The company's AI Cloud revenue surged 45% year-over-year, with expectations to maintain over 40% growth and improved profitability margins in coming quarters. Traditional China e-commerce remains weak as management focuses on steady profits rather than growth, slowing overall revenue acceleration. A strong earnings growth inflection is expected in Q2 FY2027 due to a low comparable base and better AI profitability, although free cash flow will remain pressured. Nearly half of the RMB 360 billion AI investment has been spent, with a targeted 2–2.5 year payback period.

Alibaba's stock price on Pluang rose 3.52% to USD 111.05 as of Sep 18, 2026 11:02 WIB, showing resilience despite the recent 18% drop noted in the news. The stock trades well above its 52-week low of USD 94.83 but remains below its 52-week high of USD 189.34. Market activity on Pluang shows a majority of sell orders at 59%, indicating mixed investor sentiment even as the company focuses on AI cloud growth and profitability improvements.