---
title: "Alibaba's Painful Shift Could Still Reward Patient Investors"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/289562960.md"
description: "Alibaba is undergoing a significant business transition, investing heavily in AI, cloud computing, and quick commerce, which has temporarily pressured earnings and made the stock appear less attractive based on P/E ratios. However, the author remains bullish, viewing the margin pressure as temporary. The strategy aims to shift growth beyond traditional e-commerce toward higher-frequency commerce and AI-driven cloud demand. If successful, normalized earnings could exceed current FY26 projections."
datetime: "2026-06-12T07:38:13.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/289562960.md)
  - [en](https://longbridge.com/en/news/289562960.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/289562960.md)
---

# Alibaba's Painful Shift Could Still Reward Patient Investors

Alibaba (BABA) has been going through a painful but important business transition. The company's earnings have been hit hard by aggressive investments in artificial intelligence (AI), cloud computing, and quick commerce. As a result, the stock looks far less attractive when viewed through a simple P/E lens. The upside is that this margin pressure appears to be largely temporary rather than structural. After all, Alibaba is trying to move beyond traditional e-commerce by rebuilding growth around higher-frequency commerce and AI-driven cloud demand.

### Introducing TipRanks MCP for Agents

-   Deliver institutional-grade market data directly into Claude, ChatGPT, Cursor, and other MCP-compatible AI tools.
-   Designed for personal research, portfolio monitoring, and AI-assisted investment workflows.

For this reason, I remain bullish on BABA. This is far from a low-risk thesis, and the turnaround is clearly messy. However, I believe Alibaba has a good chance of improving its quick commerce unit economics over the next year and a half, while AI-related cloud revenue continues to scale. If that happens, normalized earnings power could be materially higher than implied by FY26 results.

### Related Stocks

- [09988.HK](https://longbridge.com/en/quote/09988.HK.md)
- [BABA.US](https://longbridge.com/en/quote/BABA.US.md)
- [BABX.US](https://longbridge.com/en/quote/BABX.US.md)
- [KBAB.US](https://longbridge.com/en/quote/KBAB.US.md)
- [BABO.US](https://longbridge.com/en/quote/BABO.US.md)
- [BABU.US](https://longbridge.com/en/quote/BABU.US.md)
- [BABW.US](https://longbridge.com/en/quote/BABW.US.md)
- [BBYY.US](https://longbridge.com/en/quote/BBYY.US.md)
- [89988.HK](https://longbridge.com/en/quote/89988.HK.md)
- [HBBD.SG](https://longbridge.com/en/quote/HBBD.SG.md)

## Related News & Research

- [09:10 ETAlibaba's Amap Unveils ABot-Earth0.5 3D Native World Model for City-Scale Modeling](https://longbridge.com/en/news/289061340.md)
- [US adds Chinese solar, battery firms to list of military-linked companies](https://longbridge.com/en/news/289283767.md)
- [The First Crack In The AI Mania?](https://longbridge.com/en/news/288854802.md)
- [Sanofi-Owkin Expand AI Collaboration With New Agentic AI Initiative](https://longbridge.com/en/news/288853371.md)
- [ZAWYA: Veeam Research finds AI’s promise is colliding with a data and AI trust gap](https://longbridge.com/en/news/288699272.md)