On September 25, BABA-W declined 3.09% in regular trading to HKD 106.5 per share, with turnover of HKD 390 million. The decline followed the stock's over 4% drop in the US session overnight, as investors continued to scrutinize the company's aggressive AI capital expenditure plans and uncertain return timeline.

Since October last year, the US-listed ADR has retreated over 40%, weighed by heavy spending on AI, cloud computing, and instant retail that has pushed free cash flow into negative territory. The latest quarterly report showed net profit plunging 75.56% year-over-year to RMB 10.54 billion, despite revenue growing 8.6%. The broader Hong Kong tech sector also opened weak, with elevated US Treasury yields pressuring growth stock valuations across the board.

The company recently sold approximately USD 500 million of ZTO Express shares, continuing its non-core asset disposal strategy to redirect capital toward AI infrastructure, targeting 20GW in global data center capacity by 2032. Despite near-term pressure, Citi, Goldman Sachs, and Morgan Stanley maintain bullish ratings with target prices well above the current level.

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