By Adam Clark
Alibaba Group Holding will report earnings on Wednesday. The question looming over the Chinese internet company is whether it can show sufficient artificial-intelligence revenue to offset heavy spending on AI infrastructure and its quick-commerce business.
Alibaba will report its fiscal fourth-quarter earnings before the U.S. market opens. It is expected to make a net profit of 11.71 billion yuan ($1.72 billion), down from 12.96 billion yuan for the same period a year earlier. However, Alibaba's revenue is expected to rise to 282.44 billion yuan from 255.29 billion.
Alibaba and rivals JD.com and Meituan have been waging a price war, especially in food delivery, which has hampered profits across the sector even as revenue rises.
JD reported its own earnings on Monday, showing growing profit for its core retail business despite the fierce food-delivery competition.
Investors will be watching to see how quickly Alibaba can reduce its quick-commerce losses -- including its food-delivery business -- and how fast AI spending and revenue are increasing.
"While near term investment may pressure underlying margins, we view AI as a durable multi year growth driver supporting both revenue growth and longer term margin expansion for Alibaba," Benchmark Research analyst Fawne Jiang wrote in a recent research note.
Jiang has a Buy rating and $220 target price on Alibaba's American depositary receipts. The ADRs were down 0.4% at $136.88 in premarket trading Wednesday, having fallen 6.3% this year so far through Monday's close.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
May 12, 2026 07:48 ET (11:48 GMT)
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