Understanding the Market | Alibaba-W fell nearly 4% in the afternoon, with capital expenditures in the next three years far exceeding 380 billion yuan, and short-term profit performance may be under pressure
Alibaba-W fell nearly 4% in the afternoon, as of the time of writing, it was down 3.87%, trading at HKD 126.8, with a transaction volume of HKD 8.413 billion. On the news front, Alibaba's profits plummeted in the fourth quarter of fiscal year 2026, and cash flow is under pressure. Alibaba CEO Eric Wu clearly signaled at the earnings conference that the company's capital expenditures over the next three years may far exceed the previously expected RMB 380 billion. Notably, Goldman Sachs had significantly raised its forecast for Alibaba's total capital expenditures for fiscal years 2026 to 2028 to RMB 460 billion last year. Jin Yuan Securities stated that Alibaba's substantial increase in future capital expenditures indicates that its AI development strategy has shifted from "technology exploration" to a "infrastructure-first" model. In the short term, high depreciation costs and investment cash outflows will continue to suppress Alibaba's profit performance, and this profit pressure is expected to persist until fiscal year 2027 or even the first half of fiscal year 2028. However, in the medium to long term, this is a necessary path for Alibaba to rebuild its business moat
According to Zhitong Finance APP, Alibaba-W (09988) fell nearly 4% in the afternoon, and as of the time of writing, it was down 3.87%, priced at HKD 126.8, with a transaction volume of HKD 8.413 billion.
In terms of news, Alibaba's profit in the fourth quarter of fiscal year 2026 plummeted, and cash flow is under pressure. Alibaba CEO Eric Wu clearly signaled at the earnings conference that the company's capital expenditure over the next three years may far exceed the previous market expectation of RMB 380 billion. Notably, Goldman Sachs had already significantly raised its forecast for Alibaba's total capital expenditure for fiscal years 2026 to 2028 to RMB 460 billion last year.
Jin Yuan Securities stated that Alibaba's substantial increase in future capital expenditure indicates that its AI development strategy has shifted from "technological exploration" to an "infrastructure-first" model. In the short term, high depreciation expenses and investment cash outflows will continue to suppress Alibaba's profit performance, and this profit pressure is expected to persist until fiscal year 2027 or even the first half of fiscal year 2028. However, from a medium to long-term perspective, this is a necessary path for Alibaba to rebuild its business moat
