The company warned in its earnings call that growth in profit might slow in the short term because of investments in its new businesses and the consolidation of its food delivery business Ele.me and Koubei its local services company.
On Thursday, Alibaba ended the day down 3.2% in New York and down over 18% from a recent high. At the same time, shares of other tech giants from China dropped as well with KransShares CSI China Internet closing 2.3% down.
Baidu the internet search giant in China dropped by over 1.5% and is off 22.8% from its recent high. JD.com the e-commerce company is off by 38% from its recent high and was down by 2.9% on Thursday.
Another online shopping competitor Vipshop was down 4.1%, Netease the internet and gaming company lost close to 2.5% and Sina the internet content business fell nearly 2%.
Overall, stocks in the U.S. closed lower amidst concern over the trade war between the U.S. and China and the legal issues surrounding President Donald Trump.
In Thursday’s session some gainers included YY the livestreaming social network and Ctrip.com the tourism booking online site.
The report by Alibaba of its earnings end a disappointing quarter for tech giants in China, which are grouped often times under BATJ an acronym for Baidu, Alibaba, Tencent and JD.com. The four rank amongst the largest online companies worldwide.
Earlier in August, Tencent, which is listed in Hong Kong, reported its first decline in profit in close to 13 years, pulled down from a drop in its gaming revenue amidst the increased scrutiny by regulators in China on that industry.
JD.com revenue showed slower growth than was expected by analysts. Baidu reported profits that beat Wall Street expectations.
During trading on Friday morning in Hong Kong, Tencent shares dropped over 1% amidst declines in the stock markets in both Hong Kong and China.