Alibaba Q1 Net Income Plunges 75% Despite 9% Revenue Growth
BABA sits 42% above its 52-week low of $91.99 on elevated volume (2.3× avg).
Summary
Alibaba's Q1 results show a sharp divergence: revenue grew 9% to RMB 268.95B, but net income collapsed 75% to RMB 10.54B. The drop reflects heavy AI investment, a goodwill impairment, and an EU fine, as disclosed in the 6-K filed yesterday. Cloud external revenue accelerated 45% and AI revenue tripled, but capex surged 75% on AI infrastructure. The CFO noted the company is still running older Nvidia A100 and V100 GPUs at full capacity, signaling potential compute constraints. Adjusted EPS came in at RMB 8.52, and the company repurchased $162M in shares. This follows the FY2026 results showing a 62% drop in non-GAAP net income and negative free cash flow, reinforcing the margin pressure from aggressive AI spending.
At the time of this announcement, BABA was trading at $130.30 on NYSE in the Technology sector, with a market capitalization of approximately $303.6B. The 52-week trading range was $91.99 to $192.67. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Wiseek News.