Alibaba Misses Revenue Estimates as Cloud and AI Growth Accelerates

Alibaba Group Holding reported revenue of RMB243.38 billion for the March quarter of 2026, an increase of 3% compared with the same period a year earlier. The revenue figure fell short of analyst expectations, Reuters reported. The company published its March-quarter 2026 and full fiscal year 2026 results on May 13, according to Alibaba's investor relations site. Bloomberg Tech also reported on the earnings. The latest quarterly figures show overall revenue growth of 3% alongside cloud and artificial intelligence revenue growth that the company said accelerated to 40%.

The Details

The March-quarter revenue of RMB243.38 billion represents a 3% year-over-year increase, according to the company's financial results release reported by Stock Titan. Reuters, in its coverage of the earnings, reported that the quarterly revenue increase missed analyst estimates. The results were corroborated by Bloomberg Tech, which also covered the earnings.

The quarterly revenue increase of 3% came as Alibaba increased investment in technology businesses, quick commerce, and user experience. Adjusted EBITA fell sharply during the quarter, dropping 84% year over year to RMB5.10 billion, as the company increased investment in technology businesses, quick commerce, and user experience, according to the financial results release. Free cash flow also swung negative, with an outflow of RMB17.3 billion, compared with an inflow during the same quarter a year earlier, according to the same release.

Alibaba Chief Executive Officer Eddie Wu provided details on the company's cloud and artificial intelligence performance. Wu said Cloud Intelligence Group external revenue growth accelerated to 40%. He also stated that AI-related products accounted for 30% of this external cloud revenue. In an opening statement in Alibaba's fiscal 2026 results release, Wu said, "Alibaba's full-stack AI investments have progressed from incubation to commercialization at scale." In prepared remarks describing cloud and AI momentum, Wu also said, "Cloud Intelligence Group's external revenue growth accelerated to 40%, with AI-related products accounting for 30% of this revenue."

Reuters reported a slightly different metric for cloud growth, stating that Cloud Intelligence revenue rose 38% and that AI products reached about 30% of external cloud revenue. The 38% cloud segment growth figure reported by Reuters differs from the 40% external cloud revenue growth figure cited by Wu. The difference likely reflects different cloud revenue definitions, specifically segment revenue compared with external cloud revenue.

In CFO commentary on Alibaba's March-quarter 2026 results, Chief Financial Officer Toby Xu said, "Our strategic investments continued to translate into business growth."

The company noted that its reported 3% revenue growth rate includes the impact of disposed businesses. On a like-for-like basis, excluding Sun Art and Intime, revenue would have grown 11%.

Context

Bloomberg Tech framed the results as business growth falling short even as Alibaba pursued AI monetization gains. Bloomberg Tech was among the outlets that covered the results. Reuters covered the earnings as well. Alibaba has been positioning artificial intelligence and cloud computing as a long-term growth engine, with Qwen models and enterprise AI agents central to that strategy. The company said its full-stack AI investments have progressed from incubation to commercialization at scale. The reported 3% revenue growth includes the impact of disposed businesses. On a like-for-like basis, excluding Sun Art and Intime, revenue would have grown 11%. Reuters reported that Cloud Intelligence revenue rose 38% and that AI products reached about 30% of external cloud revenue. The Chinese technology company published its March-quarter 2026 and full fiscal year 2026 results on May 13, according to its investor relations site. The company's strategy centers on using Qwen models and enterprise AI agents to expand its cloud business.

What's Next

Alibaba has been positioning artificial intelligence and cloud computing as a long-term growth engine, with Qwen models and enterprise AI agents central to that strategy. CEO Eddie Wu said Alibaba's full-stack AI investments have progressed from incubation to commercialization at scale. CFO Toby Xu said strategic investments continued to translate into business growth. The company and news reports cited slightly different cloud growth metrics, which likely reflects different revenue definitions between segment revenue and external cloud revenue. Alibaba said the reported revenue comparison includes the impact of disposed businesses such as Sun Art and Intime. On a like-for-like basis, excluding those divestitures, revenue would have grown 11%. Alibaba has been pursuing AI monetization gains across its cloud and technology businesses.