Alibaba Stock: Consumer Slowdown Weighs On Cloud Intelligence (NYSE:BABA)

Carla Magliocco 53 Follower s Follow 5 Share Save Play ( 15min ) Comments Summary Alibaba Group is rated Hold due to slowing Chinese consumption, e-commerce deceleration, and margin pressures despite robust cloud growth. BABA's cloud segment grew 34% YoY in Q2 2026 but remains only 16% of revenue; e-commerce, facing headwinds, still dominates at 68%. Heavy AI-driven CAPEX and subsidy programs have pressured margins and free cash flow, with EBIT margin dropping to 2% and net income falling 53%. Valuation multiples are above historical averages, while revenue and EPS growth projections lag, reflecting macro and sector-specific risks. Ayman Zaid/iStock Editorial via Getty Images Chinese consumption and global e-commerce are cooling off Alibaba Group's ( BABA ) cloud service is growing strongly. That's how I interpreted it when I looked at Q2 2026 (Sep 2025), where the segment's growth was 34% year-over-year. I saw This article was written by Carla Magliocco 53 Follower s Follow I am a personal investor specializing in equities and diversified portfolios. In this diversification, I like to build a balanced portfolio where no client misses out on the rise of technology stocks -for example- but at the same time, they can keep a portion of their savings invested in more defensive options.I'm very fond of established technology companies and those focused on consumer staples and discretionary goods, always prioritizing company value over circumstances, which can sometimes be adverse. That's where I feel most comfortable: finding investment opportunities in the intrinsic value of companies with strong catalysts. For the past seven years, I've been an active investor, independently managing third-party portfolios and also focusing on macroeconomic trends, stock valuation, and the relationship between politics and markets.I hold a Master's degree in Economics and have worked as a consultant for both public and private organizations. My consulting work encompassed both financial and economic aspects, including analyzing public tenders; a demanding task. I believe it was there that I learned the reality that "buying low and selling high" is much more difficult than it seems. The pressures of public tenders are the closest thing I've experienced to the stress of watching all your stocks plummet during market crises (2020 and 2022, for example).I also maintain a blog where I share my investment perspectives and reflect on the importance of expanding opportunities for women in the world of finance. In the public organizations where I've worked, I've integrated and promoted financial inclusion programs for women, and I must say it was my most challenging task. I believe there is much more to be done in this area, and I hope to contribute my small part on Seeking Alpha. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company...

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