Is Alibaba Stock a Buy Right Now?

Alibaba Group (NYSE: BABA) doesn't want to be known as just an e-commerce giant any longer. Throughout 2025, the Chinese company leaned into its ambitions to become a cloud and artificial intelligence leader. The most recent quarterly results, however, paint a complicated picture of a business that's thriving in some ways, but uncertain in others.

Alibaba's cloud intelligence line grew by 36% in this latest quarter compared to the same period last year. Overall, though, Alibaba reported a 66% year-over-year decline in net income. The steep drop is mostly attributed to a strategic pivot into technology investments, improved user experiences, and quick commerce.

The main question, however, is whether Alibaba is too late in its efforts to catch up as a leader in AI and cloud services. Yes, a 36% increase in its cloud business this past quarter is promising, but there's real concern regarding the e-commerce side. Most problematic is the 74% year-over-year decline in operating income. The compression in the company's profits is real, and it's making shareholders nervous.

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Source Fool.com