(MENAFN- DailyFX (IG)) ​​​Pivotal moment for strategic transformation

​Alibaba is expected to report its second-quarter (Q2) 2026 earnings on the 13th of November 2025, with revenue forecast at CNY242.65 billion, a 2.6% year-over-year (YoY) rise, though pre-tax profit is expected at CNY15.19 billion, down 64.9% YoY.

​Earnings per share (EPS) are projected at CNY5.49, down 63.6% from CNY15.06 last year, reflecting the challenging transition period for the company.

​Alibaba approaches its upcoming results at a pivotal moment. The company has repositioned itself beyond its historic role as China's leading e-commerce platform to become increasingly a technology-driven business anchored in cloud, artificial intelligence (AI) and global commerce.

​Analysts expect that this quarter will be less about a simple sales beat and more about whether Alibaba can show credible traction in the new growth engines that management has emphasised.

​Cloud and AI provide growth offset

​In its recent quarter, Alibaba's cloud and "Cloud Intelligence" unit posted roughly 33 billion yuan in revenue, up about 26% YoY, while related AI-product revenue delivered triple-digit growth.

​Meanwhile, the core domestic commerce business continues to face pressure from sluggish consumer spending, deflationary headwinds in China and intense competition in online retail.

​Given that backdrop, the key questions for this earnings cycle are whether Alibaba's new growth initiatives are gaining enough scale to offset this softening in its legacy businesses.

​And how that will manifest in margin and free-cash-flow performance as the company invests heavily in technology infrastructure.

​Multiple metrics under investor scrutiny

​Investors will monitor several metrics closely. The growth rate in cloud & AI is one: can Alibaba maintain or improve the 20-30% cloud growth range and sustain triple-digit growth in AI-related revenues?

​E-commerce trends matter too: growth in user-spend on the platforms (Taobao/Tmall) and the monetisation of merchants (software/fees) will be watched for signs of recovery or stability.

​Historically, Alibaba's "customer-management revenue" (merchant services) has lagged growth in gross merchandise volume but is the higher-margin segment.

​On the margin side, with heavy investment underway in cloud infrastructure and AI, the question is whether operating margin can hold up and whether free cash flow will recover.

​International expansion and capital allocation

​Another critical piece is Alibaba's international digital-commerce business: investors will ask whether growth outside China is accelerating and whether recent developments are producing tangible benefits.

​Alibaba announced a plan to raise US$3.2 billion via a convertible bond to fund its cloud expansion and global ambitions, showing commitment to future growth.

​While this shows strategic commitment, it also raises questions around capital allocation and when the investments will yield returns that justify the substantial outlays.

​In addition, Alibaba's declared intention to invest more than US$52 billion over the coming years in AI and cloud shows long-term ambition but also implies heightened expectations.

​Significant risks cloud outlook

​On the risk side, Alibaba remains exposed to macro headwinds: China's consumer sector remains fragile, retail spending is under pressure, and competitive intensity in commerce and cloud is high.

​Trade-policy uncertainty can also affect Alibaba's international business, particularly as geopolitical tensions affect cross-border operations.

​Past quarters showed the company struggle to gain sustained growth in its legacy e-commerce segment despite strong technology momentum.

​A further concern is margin erosion: heavy investment in AI infrastructure may compress profitability in the near term before delivering expected returns.

​Execution challenges multiply

​Moreover, execution risk is non-trivial - scaling cloud infrastructure, monetising AI, and expanding internationally while retaining core commerce strength is a complex balancing act.

​The company must navigate regulatory oversight in China, competitive threats from domestic rivals, and the challenges of international expansion simultaneously.

​The balance between investing for future growth and maintaining current profitability will be crucial for investor confidence.

​Technical analysis and analyst ratings

​Year-to-date the Alibaba share price has risen by 93% but over the past five years it is still down around 45%.

​This week's fall through its August-to-November uptrend line at $173.80 on the New York Stock Exchange (NYSE) puts the October trough at $157.25 on the map.

​Alibaba daily candlestick chart Source: TradingView

​Were the October low at $157.25 to give way, a drop towards the February-to-March highs at $148.43-to-$145.30 may ensue.

​For the bulls to be back in control a positive reversal would need to take the Alibaba share price to above its $182.50 late October peak. Resistance below this level may be encountered around the 20 October high at $174.97.

​Fundamental analysts rate Alibaba as a 'buy' and have a long-term mean price target at $198.43, around 21% above the current share price (as of 5/11/2025).

​Alibaba LSEG Data & Analytics chart ​Source: LSEG Data & Analytics

​TipRanks has a Smart Score of '7 Neutral' for Alibaba.

Alibaba TipRanks Smart Score chart Source: TipRanks ​Investment considerations for Chinese tech exposure

​For investors considering Alibaba ahead of the 13 November earnings, the company presents a complex transformation story with both substantial risks and potential rewards.

​Research Alibaba's cloud and AI strategy, e-commerce positioning, and international expansion progress to understand the transformation opportunity.

​Consider how Chinese consumer trends, regulatory environment, and competitive dynamics might affect the company's performance trajectory.

​Open an account with IG by visiting our website and completing the application process.

​Search for 'Alibaba Group' or its ticker 'BABA' on our trading platform or app.

​Implement appropriate risk management given the volatility of Chinese technology stocks and geopolitical uncertainties.

​Spread betting and CFD trading provide flexible approaches for trading Alibaba around earnings.

​For longer-term investors, share dealing offers direct ownership in a company attempting to transform from e-commerce to diversified technology business.

​Alibaba's upcoming earnings will be more of a signal event than just a quarterly update. Investors will look for signs that its pivot into AI- and cloud-driven growth is gaining structural traction and not just generating headline numbers.

Important to know

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