Alibaba Group Holding Ltd. (BABA-W) saw its stock price plummet by 5.10% during Tuesday's trading session, as the company faces multiple headwinds including increased short selling pressure and concerns over expanding losses in its instant commerce business.
According to market data, BABA-W (09988) led in short selling amounts with HK$6.289 billion, indicating significant bearish sentiment among investors. This heavy short selling pressure likely contributed to the stock's sharp decline. Adding to the downward pressure, Goldman Sachs analysts expect Alibaba's group EBITA for the September quarter to decline 80% year-over-year, primarily due to expanding losses in its instant commerce business, which includes food delivery operations.
Despite the current setback, Goldman Sachs maintains a "Buy" rating on Alibaba, citing the company's breakthrough progress in AI cloud computing capabilities and international expansion potential as new sources of upward momentum. The investment bank has raised its target price for Alibaba by approximately 14%, while also significantly increasing its capital expenditure forecast for fiscal years 2026-28 to 460 billion yuan. This substantial increase in projected spending, particularly in AI-related investments, appears to be reshaping growth expectations for the company but may also be contributing to near-term investor concerns about profitability and cash flow.