Alibaba Q4 FY26 earnings preview: what to expect on 13 May
Alibaba reports Q4 FY26 results on 13 May, with analysts forecasting modest revenue growth but a sharp decline in earnings per share.
When does Alibaba report Q4 FY26 earnings?
Alibaba is scheduled to release its fourth-quarter fiscal year 2026 results on Wednesday 13 May, ahead of the US market open. BABA shares have declined roughly 9% year-to-date heading into the announcement, making this a report the bulls will want to use as a turning point.
That year-to-date underperformance is worth keeping in mind. Alibaba's Hong Kong-listed shares rallied 13% in the first calendar quarter of 2026, which raised hopes of a sustained recovery, but the New York-listed equivalent has given back more ground. Investors are arriving at this report with mixed feelings.
The previous quarter set a low bar. Alibaba missed on both revenue and profit in Q3, delivering adjusted earnings of RMB 7.09 per ADS against analyst expectations of RMB 10.94 — a substantial shortfall that left investors questioning whether AI investment costs were running out of control.
With that in mind, the 13 May release takes on added significance. A second consecutive miss could weigh heavily on the shares, while even a modest beat may be enough to revive confidence in a business that still commands a Strong Buy consensus on Wall Street.
What are analysts forecasting?
According to FactSet data, analysts are projecting quarterly revenue of 246.5 billion yuan, up from 236.45 billion yuan in the same period a year ago. That represents growth of roughly 4% — hardly spectacular, but at least a marked improvement on Q3's anaemic 2% increase.
The profit picture is less encouraging. Net profit is forecast at 11.16 billion yuan, down from 12.38 billion yuan in the equivalent quarter last year. That decline reflects ongoing pressure from elevated spending, particularly in artificial intelligence across the Alibaba ecosystem.
The earnings per share figure is the real eye-opener. Wall Street expects EPS of $0.90 for the quarter, compared to $1.83 in the same period a year earlier — a contraction of more than 50%. That is a steep drop by any measure, and it tells the story of a business firmly in investment mode rather than harvesting the fruits of past growth.
For the shares to react positively, Alibaba will likely need to beat on revenue and offer reassuring guidance around the pace of AI spending. Simply meeting these muted expectations may not be sufficient to excite the market.
AI spending: the drag on margins
Artificial intelligence expenditure is the central theme going into this report. Daiwa analysts have noted that Alibaba likely accelerated AI investment in the first calendar quarter of 2026, with a significant portion tied to integrating its Qwen model across the company's core platforms.
Outlays ranged from Lunar New Year promotional incentives to upgrading the Qwen app into an agentic front end for Taobao, Alipay, and several other platforms. The strategic ambition is clear enough, but the near-term cost is weighing heavily on China e-commerce margins, and the numbers reflect that.
Adjusted EBITA for the China e-commerce segment is expected to have contracted more sharply in Q4 than the 43% year-on-year drop seen in Q3. That would represent a significant further deterioration, and it raises real questions about the timeline for any margin recovery. If this pace persists, Alibaba will struggle to meet consensus estimates of a 44% rebound in China e-commerce adjusted EBITA in fiscal year 2027.
The same Daiwa analysts remain constructive on Alibaba's AI capabilities over the medium term, and cloud growth is expected to accelerate as the model-as-a-service push gains traction. But investors will need patience — and there is a reasonable chance the market will test that patience once more when the results land on Wednesday.
Quick commerce and other growth drivers
Not everything in this report is a headwind. Alibaba's quick-commerce division has been a notable bright spot, with CGS International analysts forecasting revenue growth of around 40% for the quarter, driven by higher order volumes from the division's expanding customer base.
The losses from quick commerce are also expected to have narrowed. Those analysts project the division could reach profitability by fiscal year 2029 — some way off, admittedly, but the trajectory is at least moving in the right direction and the drag on group margins should ease as competition moderates.
Cloud computing remains the longer-term growth story. Capital spending is expected to stay elevated through March 2027 to support the build-out of cloud and AI infrastructure, which constrains near-term free cash flow. As external cloud customers increasingly adopt Alibaba's AI tools, however, the revenue upside should follow.
None of these positive signals guarantees a favourable share price reaction on the day. Markets trade on surprises, and with expectations already subdued, the key question is whether Alibaba can deliver something that catches analysts off guard to the upside.
Alibaba share price and analyst sentiment
Despite recent underperformance, Wall Street remains broadly positive on BABA. Fourteen buy recommendations and just two holds have been issued in the past three months, with no sell ratings. The mean price target stands at $184.07, implying around 31% upside from current levels — a significant premium to where the shares are trading.
It is worth noting that retail and individual shareholders control a substantial 88.44% of outstanding BABA shares, according to TipRanks data. That level of retail concentration can amplify volatility around earnings, with sentiment-driven moves in either direction more likely than with institutionally dominated names.
Institutional exposure is relatively modest. Vanguard holds roughly 0.47% and Dodge & Cox Funds accounts for around 0.37%. Co-founder Fang Jiang controls approximately 2.20% of the company, while chairman Joseph Tsai holds around 4.82%.
Given the potential for a significant beat-or-miss outcome and the added focus on AI cost guidance, a sharp move in either direction when the results land would not be a surprise. The earnings history here has not been a smooth ride.
How to invest in or trade Alibaba shares
Whether you are looking to buy Alibaba shares for the long term or trade around the earnings release, there are several options available. For longer-term exposure, you can invest in shares through an investment account.
For shorter-term traders, spread betting and CFD trading both offer leveraged access to BABA price movements. Profits from spread betting are free from UK capital gains tax, while CFD trading losses can be used to offset gains elsewhere. Make sure you understand the risks before using leverage.
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How to invest in Alibaba shares
- Do your research on Alibaba, including its earnings outlook, AI strategy, and valuation relative to peers
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- Choose the number of shares or the value you want to invest
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