Alibaba’s latest earnings report has triggered renewed concerns over the strength of China’s consumer spending and the momentum behind its AI sector. The company’s shares slid 5.4% in Hong Kong on Friday, while its U.S.-listed stock dropped 7.6% overnight.
In the fourth quarter, revenue rose 7% year-on-year to RMB 236.5 billion, falling short of analysts’ expectations of RMB 237.9 billion. Earnings per share also missed forecasts. The underperformance was driven by sluggish growth in Alibaba’s two key segments: e-commerce and cloud computing.
On the e-commerce front, the company is grappling with weak consumer demand and intense competition from JD.com, whose own stock also dipped 2%. Meanwhile, despite the rollout of new AI models, Alibaba Cloud—a pillar of the firm’s AI strategy—failed to deliver convincing results, amplifying concerns about waning demand in China’s AI market.
Alibaba’s steep selloff made it one of the biggest drags on the Hang Seng Index, which fell 0.8%, underscoring broader investor skepticism toward Chinese tech stocks.