Alibaba: Weak Earnings and Record Trading Volume After Results

Fundamental Background

On 13 May, Alibaba Group released its financial results for the fourth quarter of fiscal year 2026. Revenue reached RMB 243.38 billion ($35.28 billion), up 3% compared with the same period a year earlier. The company reported an operating loss of RMB 848 million ($123 million), compared with an operating profit of RMB 28.46 billion in the corresponding quarter last year. The decline was driven by heavy investment in AI infrastructure and subsidies for the Taobao Instant Commerce rapid-delivery service. Non-GAAP net profit fell by 100% to RMB 86 million ($12 million).

The only notably positive segment was cloud computing: revenue from external clients increased by 40%, while AI-related product revenue posted strong growth for the eleventh consecutive quarter, according to the company’s press release.

Technical Picture

From late January to early April, the shares remained in a downward trend. The local peak on 29 January marked the beginning of a steady decline towards the low recorded on 7 April. After price compression within the $118–$122 range near the lows, the stock sharply broke out of the trend.

During this move, a pronounced volume profile formed within the $130–$143.50 range, with the point of control (POC) concentrated around $135.50–$136. The lower boundary of the profile and the $129.00 level now act as the key support zone for the current range. Resistance at $149.00 coincides with the gap formed on 26 February.

On 13 May, the day of the earnings release, vertical trading volume surged sharply, clearly visible on the histogram. The candle showed an impulsive downside breakout followed by a retreat. The stock is currently trading above the upper boundary of the profile.

The RSI + MAs indicator shows readings of 67, 60 and 56. The RSI line remains above both moving averages, which are also turning higher and remain in positive territory.

Key Takeaways

The latest earnings confirmed the structural contradiction within Alibaba’s investment case: while the cloud and AI businesses continue to gain momentum, aggressive capital spending is weighing on profitability. Future price dynamics will largely depend on how quickly growing AI-related revenue begins translating into profit, as this factor is likely to shape investor sentiment going forward.

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