Alibaba Group Holding Ltd. (BABA) shares fell after reporting a 67% year-over-year drop in non-GAAP net income for the third quarter of fiscal 2026. This result missed analyst expectations. Revenue for the quarter rose 2% to $40.73 billion, slightly missing consensus estimates.
Management attributed the profit decline to aggressive investments in its AI platform and quick commerce divisions. Cloud Intelligence Group revenue accelerated by 36% during the period. AI-related products achieved triple-digit growth as the company prioritized long-term expansion.
CEO Eddie Wu set a five-year target to surpass $100 billion in combined cloud and AI external revenue. Market reaction remained negative due to immediate margin compression. DZ Bank downgraded the stock, while Jefferies and Mizuho maintained buy-equivalent ratings with lowered price targets.