Alibaba’s Profits Have Nosedived: Is BABA Still a Buy on AI and Instant Commerce Push?

Alibaba (BABA) released its Q2 2026 earnings yesterday, Nov. 25. The stock whipsawed after that report, but eventually closed lower, as it beat on the top line but missed earnings-per-share (EPS) estimates. Moreover, its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) fell by a whopping 78% year-over-year. The company’s adjusted EBITDA saw a double-digit dip in the previous quarter, as well.

Meanwhile, despite the pressure on profitability, BABA stock is up a cool 85% for the year as of Nov. 25 closing prices. The price action might seem at odds with the declining profitability. Still, investors have poured money into the Chinese tech giant this year as it has emerged as the preeminent AI play in the world’s second-biggest economy, which Nvidia (NVDA) CEO Jensen Huang said “will win in AI race” before toning down his prediction.