NEW YORK, Feb 20, 2026, 05:44 EST — Premarket
Alibaba Group Holding Limited’s U.S.-listed shares (American depositary receipts, or ADRs) slipped roughly 0.9% to $154.27 early Friday before the bell. They’d finished Thursday at $155.70.
Investors are back in Hong Kong after the Lunar New Year, but nerves haven’t settled—oil up as U.S. President Donald Trump gave Iran 10 to 15 days to strike a nuclear agreement. The Hang Seng slid 0.6%, weighed down mostly by tech and e-commerce names.
Alibaba dropped 3.75% in Hong Kong, putting pressure on the main index. Baidu lost even more—down 5.67%, according to a Reuters market report.
There’s been a noticeable shift, with investors snapping up shares in recently listed “pure AI” companies and pulling back a bit from some of the internet giants. “Money is rotating into pure AI names, while diversified platforms like Alibaba and Tencent are seeing some profit-taking,” said Billy Leung, investment strategist at Global X Management. Dilin Wu, research strategist at Pepperstone Group, put it this way: “Investors are increasingly scrutinising how quickly their AI initiatives can contribute meaningfully to earnings.” The Edge Malaysia
Erste Group piled on by downgrading Alibaba to “hold” from “buy,” flagging shrinking operating margins and a jump in long-term debt. Analyst Hans Engel highlighted Alibaba’s spending on AI monetization—especially in cloud and custom chips—as a major variable for the stock. Investing
Politics has thrown more uncertainty into the mix. Earlier this month, the Pentagon briefly updated and published its Section 1260H list—only to pull it back. Reuters said Alibaba and Baidu made the new additions. “Alibaba is not a Chinese military company nor part of any military-civil fusion strategy,” a spokesperson for Alibaba said. Reuters
Alibaba is making another push to position itself as an AI frontrunner. On Feb. 16, the company rolled out Qwen3.5, touting it as designed for what it calls the “agentic AI era,” as competition heats up with ByteDance’s Doubao for Chinese users. Reuters
Still, sentiment is fickle. Investors may quickly sour if they decide AI investment hurts margins before it actually boosts sales—or if the U.S. government’s position grows tougher. Worries about heavy AI spending have already weighed on Chinese tech stocks, pressuring profitability, and that same concern has lately dragged on some U.S. players too.
All eyes turn to Nvidia, set to release its quarterly numbers Feb. 25, with Wall Street eager for clues on AI demand. The chipmaker’s earnings call kicks off at 5 p.m. ET.
