Alibaba Stock Slips After AI-Fueled Surge: Here’s What Spooked Investors!

Alibaba Group shares have come under renewed pressure following a blistering AI-driven rally that saw the stock surge nearly 90% over the past year. The pullback began with a 3.5% drop on Monday, January 19, 2026, after macroeconomic and company-specific headwinds converged to shake investor confidence. Despite robust top-line growth and explosive gains in AI and cloud computing revenue, Alibaba’s core e-commerce business remains vulnerable amid a slowing Chinese consumer environment. Meanwhile, elevated valuation multiples following the rally have increased market sensitivity to execution risks around its aggressive artificial intelligence investment strategy. On the same day, broader geopolitical jitters returned to the forefront after U.S. President Donald Trump threatened tariffs on NATO allies, compounding the selloff in Chinese equities. Together, these factors have raised serious questions about the near-term sustainability of Alibaba’s recent gains and the valuation premium now embedded in the stock.