Alibaba’s aggressive AI strategy is a costly gamble threatening shareholder value, trading at a premium valuation with a Value Score of C. Margin compression accelerates amid AI hype, with Mizuho slashing EBITDA forecast by 18% for Q2. Alibaba faces fierce competition domestically and internationally, underperforming peers and sectors, with a declining stock price.

Regulatory pressures and earnings contraction plague Alibaba, with new e-commerce rules impacting margins and a projected 4.77% decline in fiscal 2026 earnings. The company’s AI pivot demands patience and capital, posing risks and challenges for investors. Consider alternative growth opportunities as Alibaba’s situation deteriorates, with a Zacks Rank #5 (Strong Sell).

Read more at Nasdaq: Alibaba Doubles Down on AI Margins: Time to Hold or Cut Your Losses?