BABA Stock: Buy, Sell, or Just Another Head Fake?

Alibaba's "AI Growth": Smoke and Mirrors, or the Real Deal?

Alright, let's talk Alibaba. BABA, for those of you who haven't been paying attention, is supposedly making a comeback. Up 82% over the past year? Color me skeptical.

The "Good" News, or So They Say

So, Bank of America is sticking with a "Buy" rating. Fine. But they cut the price target? That's analyst-speak for "we're not as sure as we pretend to be." They're blaming "softer near-term growth in e-commerce." Translation: people ain't buying as much crap, and that's Alibaba's bread and butter, folks. According to Alibaba Stock (BABA) Is a ‘Buy,’ Affirms Bank of America Despite Price Target Cut, Bank of America still recommends purchasing the stock despite lowering its expectations.

Then there's the whole Q2 FY26 earnings report. Revenue up 5%? Okay, not terrible. But adjusted diluted EPS below consensus? Ouch. And cash flow down? Sounds like someone's been burning money faster than a California wildfire.

And where's that money going? Oh, right, "increased spending on AI, cloud, and quick commerce." It's always the same song and dance, isn't it? Throw money at the next shiny object and hope something sticks. Quick commerce? Please. Who needs another app to deliver groceries in 15 minutes? This ain't the Jetsons.

The Cloud: A Silver Lining? Maybe?

Supposedly, the cloud business is the "clear highlight." Revenue up 34%? Not bad, I guess. But here's where my eyes start to glaze over. "AI-related revenue has seen triple-digit growth for nine straight quarters."

Triple-digit growth? Seriously? That sounds like some marketing BS. What's the actual number? And how much of that is just Alibaba selling shovels to the AI gold rush, rather than building anything useful themselves? I mean, are they creating Skynet over there or what?

And "enterprise customers using Alibaba’s AI tools"? What tools? What are they doing with them? Details are conveniently absent, offcourse.

The analyst expects cloud revenue to remain on a “fast growth track.” Of course she does. That's what they always say.

Here's a question I haven't seen anyone ask: how sustainable is this growth? What happens when the AI bubble bursts, and everyone realizes they don't need a million cloud servers to train their cat-picture-generating algorithms?

Quick Commerce: Still Bleeding Cash

Quick commerce losses are "improving." That's like saying your house is only mostly on fire. The division reported a 36–37 billion yuan loss. BILLION. With a "B." Sure, the loss per order has "narrowed" to about 5 yuan, but who cares when you're hemorrhaging billions?

Management says losses should drop by at least half. Promises, promises. Show me the money, people. And what's the plan to actually turn a profit? Or is this just another money pit propped up by investor hype?

And user traffic and engagement on Alibaba platforms continue to improve. That's nice. But are they paying? Are they buying stuff? Or are they just mindlessly scrolling through endless product listings like zombies in a digital graveyard?

Then again, maybe I'm just being cynical. Maybe Alibaba really is on the verge of a glorious AI-powered future. Maybe pigs will fly and I'll win the lottery.

So, What's the Real Story Here?

Look, I'm not buying it. This whole "AI growth" narrative smells like a desperate attempt to distract investors from the fact that Alibaba's core business is facing serious headwinds. They're trying to pivot to the next big thing, but it feels forced, unnatural. It's like watching your grandpa try to rap – embarrassing for everyone involved. And honestly, I'm starting to think the whole thing is a house of cards waiting to collapse.