Alibaba reported a sharp decline in fiscal fourth-quarter net income as elevated technology and commerce investments eroded profitability. The drop marks one of the steepest year-over-year profit contractions for the company in recent periods.

Spending on AI infrastructure and new e-commerce initiatives surged during the quarter, compressing operating margins to their lowest point in over two years. Management offered no clear timeline for margin improvement, suggesting continued uncertainty for profitability into 2026.