Shares of Alibaba-W (09988.HK) fell sharply in afternoon trading, dropping as much as 6%. As of the latest update, the stock was down 4.79% at HK$109.40, with trading volume reaching HK$8.94 billion.

On the news front, the European Commission announced on July 20 that it had fined Alibaba's cross-border e-commerce platform, AliExpress, €550 million (approximately RMB 4.25 billion) under the EU's Digital Services Act (DSA). This marks the highest penalty levied since the DSA came into effect. In response, China's Ministry of Commerce expressed strong dissatisfaction and serious concern, firmly supporting Chinese companies in using legal means to protect their rights and vowing to take strong measures to safeguard corporate interests.

It is worth noting that the post-earnings stock performance of Google and Tesla suggests that the AI trade has shifted from being "story-driven" to a "cash flow verification" phase. In the fiscal year 2026, Alibaba reported a free cash outflow of RMB 46.61 billion, the first time since the fiscal year 2011 that public financial data has shown a net free cash outflow. Earlier, Alibaba's management indicated that the company's three-year capital expenditure could far exceed RMB 380 billion.