Alibaba The Chinese e-commerce giant lost shares after both top and bottom lines after missing its fiscal fourth-quarter earnings expectations.

Stocks listed in the U.S. trade fell 5% at 6:02 a.m. ET.

Here is what Alibaba did in the fourth quarter of fiscal estimates with LSEG as of March:

• income: RMB 236.5 billion (US$32.6 billion), expected RMB 237.2 billion
• net income: The expected 12.4 billion yuan is expected to be 24.7 billion yuan.

Despite no analyst expectations, revenue increased by 7% year-on-year.

Alibaba's net revenue increased by 279% year-on-year, low base. Alibaba said some of the losses were offset by increased operating revenue and changes in its valuation of its stock investments, as it disposes of some of its subsidiaries.

However, analysts hope that the company's investment in artificial intelligence and its core e-commerce business will help it meet or exceed high expectations.

But Alibaba is struggling to cope with macroeconomic fluctuations, which has affected consumer sentiment in China. The trade war between Washington and Beijing has created uncertainty in the world's second-largest economy, with huge tariffs on both sides in the latest quarter of Alibaba's report.

Beijing and Washington agreed to suspend most tariffs on each other's goods this month.

Alibaba's core Taobao and Tmall Group division, the company's China e-commerce business, rose 9% to RMB 1001.4 billion. This growth rate is faster than the previous quarter's level. Alibaba's customer management revenues that sell marketing and other services to merchants on its platform grew 12%. This is a significant revenue driver for the company.

In the past few months, China has also introduced policies to stimulate consumption and consumer purchases.

To improve purchases on its TMALL and TAOBAO platforms, Alibaba has established a partnership with Rednote or China’s Instagram-style service Xiaohongshu. This transaction allows Taobao links to be embedded in rednote posts, so users can be taken directly to the product shopping page.

Even with these changes, Alibaba is still facing a fierce price war in China, with competitors including PDD and JD.com.

Investors are also focusing on Alibaba's efforts in artificial intelligence, and it has become a leading player both at home and around the world.

In April, the Hangzhou-based company launched its latest version of its open source large language model, QWEN 3, which was used to power Alibaba's AI assistant quark.

AI is hot in China and has been intensified by the DeepSeek innovation model launched earlier this year. Meanwhile, Chinese tech giant Tencent announced on Tuesday that capital expenditure in the first quarter rose 91% year-on-year, driven by artificial intelligence investment.

This breaking news report is being updated.