Alibaba earnings preview: Can the Chinese tech giant balance growth with profitability?
Alibaba is approaching its next quarterly earnings report scheduled for 18 February 2026, offering investors a pivotal update on how the Chinese e-commerce and cloud giant has navigated a dynamic operating environment marked by slowing core retail growth, heavy strategic investments and accelerating adoption of cloud and artificial intelligence (AI) capabilities.
Alibaba is expected to report higher revenue, but lower pre-tax profit and earnings per share compared to quarter three (Q3) 2025 results.
- Revenue: RMB 290.98 billion, around 3.9% above its Q3 2025 RMB280.15 billion result
- Pre-tax profit: RNB33.93 billion, around 44% lower compared to a year ago
- Earnings per share (EPS): RMB12.46, around 42% lower than a year ago
After a strong – near 48% – rally in the Alibaba share price over the past year despite several quarters of mixed results, the company’s upcoming release will be a key signal on whether Alibaba’s transition into AI-enabled commerce and cloud monetisation is translating into sustained revenue growth and profitability.
Revenue mix shifting towards high-growth segments
Investors will be looking for further evidence that Alibaba’s revenue mix is shifting towards higher-growth segments, even if headline profit margins remain under pressure from strategic spending.
In the most recent prior earnings, Alibaba reported solid revenue but lower earnings growth in its second quarter (Q2) of fiscal 2026, with revenue up about 5 percent year-on-year (YoY) and adjusted EPS slipping despite its international commerce and cloud businesses gaining traction.
Cloud revenue, including AI-related products, showed consistent double-digit growth, a trend expected to continue in the upcoming figures given ongoing enterprise demand for AI infrastructure.
Cloud and AI segment takes centre stage
The cloud and AI segment will be a central focus for the February release. In its Q2 2026 earnings call, Alibaba highlighted a 34.5% increase in cloud revenue and robust external customer adoption, while AI-related products maintained triple-digit growth momentum and quick commerce revenue surged.
However, strategic investments in cloud infrastructure and quick commerce weighed on margins and free cash flow, leading to a significant drop in adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) and a free-cash-flow outflow as the company prioritised scale and market share.
This dynamic sets up a core tension for the Q3 results: can Alibaba maintain high-growth segments without further eroding profitability, or are costs rising faster than monetisation?
E-commerce performance remains crucial
Consumer demand and core e-commerce performance will also be under scrutiny. Domestic consumption in China has remained mixed, with Taobao and Tmall’s growth relatively modest compared with Alibaba’s international retail and digital commerce segments.
Markets will closely watch whether Alibaba’s initiatives – such as AI-driven marketing tools and loyalty programmes like 88VIP – are yielding tangible improvements in merchant take rates and gross merchandise value, thereby lifting overall platform revenues.
The effectiveness of Alibaba’s competitive positioning against rivals such as JD.com and PDD Holdings in both domestic and international markets will further shape sentiment.
Cost control and investment balance
Beyond near-term revenue, cost control and guidance will be important. Alibaba has been clear in prior updates that it is prepared to absorb near-term profitability headwinds as it builds longer-term capabilities in cloud, AI and quick commerce.
Investors will be sensitive to management’s commentary on capex guidance, the pace of strategic spend and expectations for margin normalisation in the second half (H2) of 2026.
Balance sheet strength and cash generation
The balance sheet and cash flow profile will round out the story. While Alibaba has a strong liquidity buffer, recent financial disclosure showed adjusted EBITDA pressure and investment-led cash outflows.
How management balances spending with shareholder returns or operational discipline in the coming quarters could influence valuation, especially as markets increasingly price companies based on sustainable earnings rather than headline growth.
Analyst ratings and technical analysis
Fundamental analysts rate Alibaba, as a solid ‘buy’, averaging a long-term consensus price target of $198.42, implying around 19% upside from current levels as of 11 February 2026, according to LSEG Data & Analytics.