Alibaba Plunges 16.2% in 6 Months: 3 Key Reasons to Hold the Stock

Alibaba BABA shares have plunged 16.2% over the past six months compared with a 4.1% decline in the Zacks Retail-Wholesale sector as investors weighed the company's aggressive artificial intelligence (AI) spending against declining profitability. While concerns over margins are valid, Alibaba's fundamentals tell a more nuanced story. Accelerating cloud growth, a deepening full-stack AI ecosystem and a resilient commerce business backed by a strong balance sheet suggest that existing investors should hold the stock, even as near-term headwinds argue for patience before adding fresh positions.