Overspending on AI, Alibaba AI surge drives revenue up 9%, profit down 75%

Alibaba Group (NYSE: BABA) presented its June quarter 2026 results on August 20, 2026, revealing a company in the midst of a strategic transformation toward artificial intelligence. While revenue rose 9% to RMB 268,953 million ($39.6 billion), profitability metrics declined sharply as the company dramatically increased spending on AI infrastructure. GAAP net income fell 75% to RMB 10,444 million, and adjusted EBITA dropped 30% to RMB 27,329 million.

The stock declined 2.94% to $23.13 following the presentation, reflecting investor concern about the balance between aggressive AI investment and near-term profitability. The shares remain well below their 52-week high of $36.68, trading closer to the lower end of the range.