Two giants. Two very different stories. Amazon and Alibaba both dominate e-commerce and cloud computing, yet heading into 2026, they are travelling in opposite directions. One is accelerating. The other is spending heavily and hoping the returns follow.
Figure 1: Amazon and Alibaba logos illustrate the ongoing comparison between the two global e-commerce and cloud computing giants. [Source: Analytics Vidhya]
The Alibaba vs Amazon earnings debate is sharpening right now, with Alibaba set to report fiscal Q3 2026 results shortly and Amazon having already delivered a strong Q4 2025 print. Here is what the numbers say and what investors should be watching.
Amazon’s Momentum Is Hard to IgnoreÂ
Amazon closed out 2025 with net sales of US$213.4 billion for Q4, up 14% year over year. That growth was broad-based, spanning North America, international markets, and Amazon Web Services (AWS). AWS alone grew 24%, its fastest pace in 13 quarters, reaching an annualised run rate of approximately US$142 billion.
Figure 2: Amazon’s logistics and fulfilment operations. [Source: Amazon]
The AWS order backlog surged 40% year over year to US$244 billion. That figure alone signals years of locked-in demand. Amazon guided Q1 2026 net sales of between US$173.5 billion and US$178.5 billion, with operating income of US$16.5 billion to US$21.5 billion. The Company also flagged approximately US$200 billion in capital expenditure for 2026, directed primarily at AWS and AI infrastructure.
Alibaba Earnings Forecast: Growth With a CostÂ
Wall Street expects Alibaba to report Q3 FY2026 earnings of US$1.68 per share, down sharply from US$3.09 in the same quarter a year ago. Revenue is projected at approximately US$42.0 billion, representing an 8% year-over-year increase.
That earnings decline tells the story. In Q2 FY2026, Alibaba posted revenue of RMB 247.8 billion, up just 5% year over year, while non-GAAP diluted earnings fell 71%. Total adjusted EBITDA dropped 78%. The Company committed RMB 380 billion over three years toward AI and cloud infrastructure, a bold bet that is visibly compressing margins in the near term.
Where Alibaba Is Winning?
Alibaba’s Cloud Intelligence Group posted 34% revenue growth in Q2 FY2026, with AI-related products delivering triple-digit gains for the ninth consecutive quarter. The Company has open-sourced nearly 400 models under its Qwen family, which crossed 700 million cumulative downloads on Hugging Face by late 2025.
Figure 3: Alibaba Group headquarters. [Source: Investopedia]
Jefferies analyst Thomas Chong reaffirmed a Buy rating with a price target of US$225, pointing to strong momentum at Alibaba Cloud and the growing integration of AI tools across Taobao, Alipay, and other core services. Chong noted most businesses are still early in AI adoption, suggesting a long runway ahead for Alibaba earnings growth from cloud.
The Risks Alibaba Cannot Ignore
Not every analyst shares that optimism. Erste Group analyst Stephan Lingnau downgraded Alibaba from Buy to Hold, citing falling operating margins and rising long-term debt. He suggested the stock is likely to move sideways in the medium term rather than post meaningful gains.
- Intense domestic competition from JD.com, Meituan, and Pinduoduo is pressuring e-commerce margins
- US chip export restrictions are limiting access to advanced computing hardware for Alibaba Cloud
- Quick commerce losses more than doubled sales and marketing expenses to RMB 66 billion
- Free cash flow showing an outflow of RMB 21.8 billion in Q2 FY2026
- Regulatory uncertainty in China continues to weigh on investor sentiment
Figure 4: Alibaba Group Holding Limited price and analyst consensus through 2026. [Source: Yahoo Finance]
These are not small concerns. For profitability-focused investors, the Alibaba earnings forecast raises questions about the timeline to sustainable returns.
Alibaba vs Amazon Earnings Through a Valuation Lens
Alibaba stock rose 28.3% over the past six months, significantly outpacing Amazon’s 14.1% decline over the same period. However, analysts note that Alibaba’s gains largely reflect recovery from previously depressed levels rather than fundamental outperformance.
Figure 5: Amazon underperforms Alibaba over the past six months, highlighting divergent stock performance trends. [Source: Yahoo Finance]
On valuation, Alibaba trades at a price-to-sales ratio of 2.29x, a discount to Amazon’s 2.61x. Amazon’s premium reflects superior cash flow predictability, lower regulatory risk, and stronger forward earnings visibility. Zacks currently rates Amazon as Hold (Rank 3) and Alibaba as Strong Sell (Rank 5).
Industry Outlook
Global cloud infrastructure spending is forecast to accelerate through 2026 and beyond, driven by enterprise AI adoption and the buildout of large language model compute capacity. The e-commerce sector continues to see structural growth in both developed and emerging markets, though margin pressure from logistics investment and quick commerce competition remains a defining theme across major platforms.
FAQ
Q1. How do Alibaba vs Amazon earnings compare right now?Â
Ans. Amazon delivered Q4 2025 net sales of US$213.4 billion, up 14% year over year, with strong AWS growth.Â
Q2. What is the Alibaba earnings forecast for Q3 FY2026?Â
Ans. Wall Street analysts expect Alibaba to report earnings of US$1.68 per share for Q3 FY2026, representing a significant decline from the prior year period.Â
Q3. Why are Alibaba’s earnings falling despite revenue growth?Â
Ans. Alibaba is investing heavily in AI and cloud infrastructure, committing RMB 380 billion over three years.Â
Q4. What is driving Amazon earnings growth in 2026?Â
Ans. AWS remains the primary driver, with 24% revenue growth and a US$244 billion order backlog.
