Alibaba-W shares plummeted over 4% on Friday. The sharp decline followed the release of the company's financial results for the third quarter of fiscal year 2026.
The e-commerce giant reported revenue that grew a modest 2% year-over-year to RMB 284.84 billion, falling short of analyst estimates. More significantly, adjusted net profit plunged 67% to RMB 16.71 billion, a drastic drop that missed expectations by a wide margin.
The severe profit contraction is attributed to heavy strategic investments in several key areas. The company is aggressively spending to scale its instant retail (quick commerce) business, enhance user experience, and develop its technology and artificial intelligence infrastructure. While these investments are aimed at securing long-term growth, they have significantly pressured near-term profitability and cash flow, leading to investor concern.