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Alibaba Earnings Drop: Is History Repeating for BABA Investors?
Alibaba Group (BABA) released its quarterly earnings today, but instead of sparking excitement, the stock is following a familiar—and disappointing—playbook. Despite heavy options activity (14,938 contracts traded) and an options market betting on a big ±6.7% move, BABA's stock slipped -0.5% after the results hit. Is this yet another letdown in a series of lackluster post-earnings reactions, or does the data reveal something deeper?
Looking Back: Alibaba’s Tough Earnings Track Record
BABA has a history of underwhelming the day after it reports earnings. Over the past 12 quarters, the stock averaged a -1.0% move on earnings days, with just 33.3% of reports leading to a gain. The opening price only managed a +0.2% gap higher on average, and by the closing bell, the trend often drifted further negative (-1.3% from open to close)—with three out of four reports ending in the red.
Check the full historical earnings move breakdown here.
Earnings Day: By the Numbers
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Average Return | -1.0% | +0.2% | +2.1% | -3.1% | -1.3% |
| % of Moves Up | 33.3% | 41.7% | 25.0% | ||
| % of Moves Down | 66.7% | 58.3% | 75.0% |
The numbers make it clear: the majority of Alibaba's recent earnings days have been rough for bulls, with negative returns and an intraday bias toward new lows.
How Big Are These Moves?
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Absolute Average Return | 5.3% | 4.7% | 2.1% | 3.1% | 2.5% |
| Max Absolute Return | 12.9% | 9.7% | 5.6% | 7.9% | 5.8% |
| Min Absolute Return | 0.1% | 0.1% | 0.3% | 0.3% | 0.3% |
This table highlights how the swings can be significant, with occasional double-digit moves, but also periods of relative calm. Today's actual move (-0.5%) was far more muted than last quarter's jump (12.9%).
After the Dust Settles: What Happens Next?
Even after the drama of earnings day, BABA doesn't tend to stage big recoveries. One, three, and seven days after earnings, the stock keeps drifting lower on average—down -1.0% after three days, and negative over one and two-week spans as well. Less than half of the post-earnings sessions saw the stock bounce back, showing lingering pressure after results.
| Stock Performance | 1 Day After Earnings | 2 Days After Earnings | 3 Days After Earnings | 1 Week After Earnings | 2 Weeks After Earnings |
|---|---|---|---|---|---|
| Average Return | -0.1% | -0.5% | -1.0% | -1.5% | -1.2% |
| % of Moves Up | 45.5% | 36.4% | 27.3% | 36.4% | 45.5% |
| % of Moves Down | 54.5% | 63.6% | 72.7% | 63.6% | 54.5% |
Takeaway: Opportunity or More Downside?
BABA’s big strategic bets on AI and cloud are powering segment growth, but that hasn’t translated to robust headline numbers—or bullish price action. Today's results featured 5% revenue growth, robust AI expansion, but significant margin contraction as profits got squeezed by investments. Given a streak of disappointing post-earnings price action, will today’s smaller move break the trend, or is this just a pause before more volatility?
If you want to dive even deeper into Alibaba’s earnings move patterns, see the detailed historical stats here.
While the options market was betting on a much bigger move this time (±6.7%), reality came in much tamer, highlighting that even well-telegraphed earnings events can defy expectations. For those tracking Alibaba, history says to expect volatility and—at least so far—downside is more common than upside.
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