Alibaba Group’s stock continues to face significant headwinds in the market. The company’s recent filing of its interim report with U.S. regulators has reinforced investor concerns regarding its costly strategic pivot. As management channels billions into artificial intelligence and infrastructure, near-term profitability is taking a substantial hit. The current market valuation reflects a company in transition, with the strategy being met by persistent selling pressure.
Earnings Reveal Costly Strategic Shift
The latest quarterly figures, confirmed in Thursday’s regulatory filing, are at the heart of the negative sentiment. While revenue increased by 5 percent, adjusted earnings per share plummeted by 71 percent. This stark contrast highlights the e-commerce giant’s aggressive repositioning. Alibaba is making massive investments to develop AI infrastructure and expand its quick commerce delivery networks in a bid to secure long-term competitiveness.
A prime example of this direction is the recent launch into the AI hardware sector with its “Quark AI” glasses. However, these future-focused expenditures are severely compressing profit margins. Market observers are increasingly viewing the current fiscal year as a transitional period, where management is prioritizing market share and technological capabilities over immediate returns for shareholders.
Should investors sell immediately? Or is it worth buying Alibaba?
Technical Picture Reflects Fundamental Concerns
The fundamental doubts are clearly visible in the stock’s price action. Currently trading at 135.20 Euros, the equity has declined approximately 5.7 percent over the past month. A key technical concern is its position below the 50-day moving average, which stands at 142.98 Euros. Remaining beneath this significant smoothing line keeps the short-term outlook weak. Although the Relative Strength Index (RSI) reading of 29.4 indicates an oversold condition, there has been insufficient buying interest to trigger a meaningful rebound.
Sustained improvement in market sentiment is unlikely until Alibaba can demonstrate that its heavy spending on AI and logistics will translate into renewed profit growth within a reasonable timeframe. Until such evidence emerges, resistance is expected to persist.
Ad
Alibaba Stock: Buy or Sell?! New Alibaba Analysis from December 5 delivers the answer:
The latest Alibaba figures speak for themselves: Urgent action needed for Alibaba investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from December 5.
Alibaba: Buy or sell? Read more here...
