Alibaba has shed 7.4% this week and now trades at $107.74, putting the stock roughly where it was before the September 22 earnings pop ever registered.
The lending market tells a notably different story from seven days ago. In last week's note, availability had tightened to 121%. It has since loosened back to 149%, a 22% swing in the opposite direction over the past week. That easing suggests shorts are not pressing the bet harder: short interest has actually trimmed by 2.7% over the past month to around 41 million shares, and borrowing costs, while up 90% from a month ago in absolute terms, remain low in practice at 0.60%. The picture is one of a modest, stable short base rather than a crowd piling in. Options positioning is consistent with that read. The put/call ratio is 0.553, fractionally below its 20-day average of 0.564 and half a standard deviation below the mean. That is roughly neutral, a far cry from the defensiveness that tends to accompany a stock under genuine siege. The 52-week low PCR of 0.525 is not far off, meaning call demand is still relatively elevated by the standards of the past year, even after the earnings euphoria unwound.
The Street remains constructive in direction but is well above where the stock is trading. JP Morgan and Barclays both raised targets in late August, to $210 and $200 respectively, after the earnings print. Susquehanna also lifted its target to $190. Those moves all came in the days immediately after results and are the most recent signals of analyst conviction. Baird was the outlier, trimming its Outperform target to $160 from $164. The mean analyst target figure in the data is flagged as a data anomaly and has been omitted; the individual firm targets cited above are more reliable anchors. The bull case centres on cloud momentum and the 20% jump in daily active users following the integration of instant commerce into the Taobao app. The bear case is harder to dismiss: EBITDA of RMB 17 billion missed consensus by RMB 2 billion, e-commerce margins have been guided lower to 23% for the second half of the fiscal year, and free cash flow turned negative as quick-commerce investment accelerates. On valuation, the stock trades at 12.6x trailing earnings and 9.7x EV/EBITDA. The price-to-book multiple has fallen 8.7% over the past 30 days to 1.36x, a quiet compression that reflects the earnings miss rather than any sudden re-rating.
The ORTEX short score has drifted just below the midpoint at 49.6, down from 50.7 at the start of the week. That is not an extreme reading in either direction: it places Alibaba in the 27th percentile on short score rank, meaning positioning looks cautious relative to peers but not aggressively bearish. Retail attention, as measured by Wikipedia page views and ORTEX stock-page traffic, is running well below the stock's own 90-day average, with a z-score of -2.1 as of early September, a sign that the broader investing public has moved on from the earnings catalyst.
Peer performance is uniformly weak. JD fell 3.9% on the week, PDD dropped 3.5%, and VIPS lost 2.3%. NPN on the Johannesburg exchange was the worst performer in the peer group, down 4.5%. That broad-based selling across Chinese consumer and retail names suggests the pressure on Alibaba is sector-wide rather than stock-specific this week. Institutional holders are large and stable: BlackRock held 128.8 million shares as of August 31, adding 1.4 million in the period, while Vanguard added 2.2 million to reach 98.7 million shares. SoftBank, noted in the 13G register, has reduced its stake to 3.3% from 8.0% as of its last filing in May 2025, though that disclosure is now stale and the position may have changed further since.
The next scheduled earnings date is November 19. Between now and then, the question is whether the margin compression story in China e-commerce becomes more or less acute as quick-commerce investment ramps, and whether cloud revenue growth provides enough of an offset to shift the analyst community's cautious optimism into something more tangible.
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