BABA shares rise 7% as investors overlook a $0.19 EPS miss, focusing on 40% AI-driven cloud growth instead.
Alibaba reported fourth-quarter fiscal 2026 earnings of $0.19 per share, missing analysts’ expectations of $0.84 and down from $1.84 a year ago. Net income fell to 86 million yuan ($12 million) from 30 billion yuan, marking its first operating loss since 2021.
Revenue growth was driven by a 40% increase in AI-related cloud revenue, part of a broader $55.9 billion investment plan to expand cloud and AI infrastructure. The company’s cloud segment has become a key growth driver amid rising demand for AI training and deployment.
Despite the earnings miss, BABA shares rose 7% in morning trading, suggesting investors prioritized cloud momentum over short-term profitability. Analysts noted Amazon may not receive similar leniency if it posts comparable results.