Why Alibaba Group (BABA) Stock Crashed Yesterday

We recently compiled a list of the Traders Flee These 10 Stocks Today. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against other stocks that crashed yesterday.

Wall Street’s main indices ended mixed on Thursday as investors continued to digest a series of first-quarter earnings and key economic data.

Among the three indices, only the Nasdaq registered losses, down 0.18 percent. In contrast, the Dow Jones grew by 0.65 percent while the S&P 500 rose by 0.41 percent.

Meanwhile, 10 companies registered hefty losses during the session, battered by a flurry of negative news, missed estimates, and a weak outlook for the rest of the year. In this article, let us explore the 10 companies that lag in performance and identify the reasons behind their decline.

To come up with the list, we considered only the stocks with a $2 billion market capitalization and $5 million in trading volume.

An e-commerce platform displaying a wide range of products to customers online.

Alibaba Group Holding Limited (NYSE:BABA)

Alibaba Group Holding Limited (NYSE:BABA) tanked by 7.57 percent on Thursday to finish at $123.90 apiece as investor sentiment was dampened by missed earnings forecasts in the first quarter of the year.

Alibaba Group Holding Limited (NYSE:BABA) saw net income attributable to shareholders jump by 279 percent in the first quarter of the year to 12.382 billion yuan from 3.270 billion yuan in the same period last year, while revenues increased by 7 percent to 236.4 billion yuan from 221.87 billion yuan year-on-year.

However, both earnings per share and revenue figures missed analysts’ estimates.

Meanwhile, CFO Toby Xu announced the distribution of annual and special dividends amounting to $4.6 billion.

The dividends will be paid out in two parts, totaling 25 cents per ordinary share or $2 per ADS. This comprised an annual regular cash dividend worth $0.13125 per share or $1.05 per ADS, as well as a one-time special cash dividend worth $0.11875 per ordinary share or US$0.95 per ADS.

The dividends will be applicable to shareholders as of record date June 12, 2025, both on the Hong Kong and US stock exchanges.

Overall, BABA ranks 9th on our list of stocks that traders flee today. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than BABA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.