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 appear to have remained in a broader downward trend. The local peak on 29 January may have marked the start of a steady decline towards the low recorded on 7 April. Following a period of price compression within the $118–$122 range near the lows, the stock likely broke out of the prior trend with strong downside momentum.

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

On 13 May, the day of the earnings release, vertical trading volume appears to have surged sharply, as reflected in the histogram. The candle may have shown an impulsive downside breakout followed by a partial retreat. The stock is currently trading above the upper boundary of the profile, which could indicate a shift in short-term positioning.

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 may still be in positive territory.

Key Takeaways

The latest earnings may have reinforced the structural contradiction in Alibaba’s investment case: while the cloud and AI segments continue to gain momentum, elevated capital expenditures could be weighing on profitability. Future price dynamics are likely to depend on how quickly growing AI-related revenue begins to translate into profit, which may ultimately shape investor sentiment going forward.

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