In its fiscal second quarter of 2026, Alibaba reported revenue of $34.81 billion, up 5% year-over-year and exceeding consensus estimates of $34.43 billion. On a like-for-like basis, revenue growth reached 15% after excluding divested operations. However, profitability contracted sharply as adjusted net income plummeted 72% to $1.45 billion and adjusted EBITA declined 78% to $1.27 billion. The margin erosion reflects ramped-up investment in quick-commerce infrastructure, user-experience upgrades, and strategic acquisitions, as well as higher technology spending to support artificial intelligence initiatives. China e-commerce revenue rose 16% to $18.62 billion, driven by accelerated onboarding of Tmall brands and stronger demand for same-day delivery, while international commerce revenue increased 10% to $4.89 billion on expanded local inventory for AliExpress. The steep drop in profitability has analysts questioning whether current valuations fully account for rising costs in a fiercely competitive landscape of domestic rivals and global technology players.

Alibaba has agreed to merge the autonomous-driving unit within its Cainiao logistics arm with Chinese robovan specialist Zelos Technology in a transaction valuing the combined entity at approximately $2 billion. Under the deal, Cainiao will take a strategic stake in the newly formed business, which will operate under the Zelos banner while retaining Cainiao Robovan as a standalone brand. A senior Cainiao executive is set to join Zelos’s board of directors. The merger aims to accelerate commercialization of unmanned delivery vehicles across urban and suburban routes, leveraging Alibaba’s cloud computing and AI platforms for route optimization, real-time vehicle monitoring, and predictive maintenance. Investors have lauded the move as a means to streamline research and development costs and capture a projected multi-billion-dollar market for autonomous last-mile logistics solutions in China and Southeast Asia.