<div id="readability-page-1"><p>Shares of <strong>Alibaba </strong><span>(BABA<span> -9.10%</span>)</span> were taking a dive today after investors balked at the company's big spending plans in cloud and artificial intelligence (AI).</p> <p>As a result, the stock was down 9.7% as of 11:24 a.m. ET.</p> <div><p><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MDg3NzEvYWxpYmFiYS1waG90by5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MDg3NzEvYWxpYmFiYS1waG90by5qcGcmdz03MDA"/></p><p>Image source: Alibaba.</p> </div> <h2>Alibaba faces investor skepticism</h2> <p>It's not unusual for investors to react poorly to massive capital expenditure layouts and it seems like that's what's happening here.</p> <p>The Chinese tech giant, best known for its Tmall and Taobao e-commerce platforms, said today that it plans to invest at least $53 billion AI infrastructure over the next three years, making a similar move to big tech companies in the U.S. </p> <p>However, its American peers have been greeted with some skepticism over the massive expenditures and now Alibaba is facing similar scrutiny, especially after the stock has soared in recent months.</p> <p>Among the news rattling AI investors were reports that <strong>Microsoft </strong>was canceling some leases for data center capacity in the U.S., meaning it may have overestimated demand for AI computing.</p>  <h2>What it means for Alibaba</h2> <p>The decision, in and of itself, isn't a bad thing for Alibaba, and reflects the same investments its larger U.S. peers are making.</p> <p>However, some investor skepticism seems reasonable given the company's recent struggles, U.S. pressure on China's chip imports, and other risks to the stock, including from another government crackdown.</p> <p>A 10% sell-off seems steep for news of investment, which typically precedes growth, especially coming after a generally solid earnings report last week that included cloud revenue growth of 13%. Investors should overlook today's decline as the AI spending could pay off, but expect the stock to be volatile over the coming months as the strategy plays out.</p>                                                                            </div>

Alibaba  earnings 

09988

BABA

<p>Shares of Alibaba fell 9.7% today due to investor concerns over the company's $53 billion investment in AI infrastructure over the next three years. This reaction mirrors skepticism faced by U.S. tech firms regarding large capital expenditures. Despite a solid earnings report last week, investors are wary of Alibaba's recent struggles and external pressures, leading to a significant sell-off. While the investment could lead to growth, volatility is expected in the stock as the strategy unfolds.</p>

- Alibaba's shares fell 9.7% after the company announced plans to invest at least $53 billion in AI infrastructure over the next three years.  
- Investor skepticism is heightened due to recent struggles, U.S. pressure on China's chip imports, and potential government crackdowns, despite the company's solid earnings report.  
- While the investment could lead to future growth, volatility in the stock is expected as the strategy unfolds.

Why Alibaba Stock Was Falling Today