Earnings Expectations
Alibaba’s FY2026 Q2 preview suggests a mixed picture. Revenue growth of four percent year-on-year is modest but stabilising, signalling that core commerce is no longer contracting. The sharper decline in adjusted net profit, driven by investment spending and margin pressure, will likely dominate headlines. Markets may react negatively if profitability deteriorates faster than expected, even if the top line is in line.
Flash Deals will be a key focus. If management shows that user engagement and order volume are rising meaningfully, investors may tolerate weaker margins in the near term. The cloud segment remains the long-term value driver. Any commentary on enterprise adoption, AI-related demand or improved operating discipline could provide support.
Is 150 a Reasonable Entry?
At 150, Alibaba trades at a significant discount to global peers and at valuations that already price in cautious growth and political risk. The level is attractive from a long-term value perspective, but sentiment towards Chinese equities remains structurally weak. If you are adding, it is sensible to view it as a gradual accumulation rather than a high-conviction short-term trade. Downside volatility is still possible around earnings.
View on Qwen
Qwen’s recent progress has been notable. The models have achieved competitive benchmarks, and Alibaba is positioning Qwen as the backbone of its cloud AI ecosystem. Its strength lies in enterprise-scale deployment, multilingual capabilities and integration across commerce, logistics and cloud services. The challenge is less about technology and more about global reach and monetisation, given regulatory and geopolitical barriers.
Overall, the earnings may deliver stabilising growth but compressed margins. Valuation at 150 is appealing for patient investors, while Qwen represents one of Alibaba’s strongest long-term strategic assets.
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