ETFs in Focus on Alibaba's Mixed Q4 Results

Alibaba Group BABA reported mixed fourth-quarter fiscal 2026 results, beating earnings estimates while lagging on revenues. The stock plunged 7.6% at the close yesterday, weighed down by slowing Chinese consumer spending and increased competition.

Investors should take a close look at ETFs having the largest allocation to this Chinese e-commerce giant. These include Roundhill China Dragons ETF DRAG, Invesco Golden Dragon China ETF PGJ, The Nightview Fund NITE, CoreValues Alpha Greater China Growth ETF CGRO and ProShares Online Retail ETF ONLN.

Earnings of $1.73 per ADS outpaced the Zacks Consensus Estimate of $1.48 and were 23% higher than the year-ago earnings. Revenues grew 7% year over year to $32.5 billion, falling short of the consensus mark of $33.08 billion. The year-over-year revenue growth was credited to growing core e-commerce and cloud businesses (see: all the Technology ETFs here).

Driven by strong demand for AI, Cloud Intelligence Group revenue growth accelerated to 18%, with AI-related product revenues achieving triple-digit growth for the seventh consecutive quarter. Customer management revenues at Taobao and Tmall Group grew 12% year over year, reflecting the sustained impact of investments in user experience and effective monetization.

Looking ahead, AI is expected to remain a key driver of accelerated revenue growth for Alibaba Cloud. The company plans to spend at least $53 billion over the next three years to build out artificial intelligence and cloud computing infrastructure (read: Alibaba's Stock Surges on AI Breakthrough: ETFs in Focus).

ETFs in Focus

Roundhill China Dragons ETF (DRAG)

Roundhill China Dragons ETF is the first-ever ETF to provide precise exposure to China’s tech leaders. It offers equal-weight exposure to a concentrated basket of the largest and most innovative Chinese companies (the “China Dragons”). DRAG currently holds six stocks in its basket, with Alibaba accounting for 16.2% of the assets. Roundhill China Dragons ETF has AUM of $34.4 million and charges 59 bps in annual fees.

Invesco Golden Dragon China ETF (PGJ)

Invesco Golden Dragon China ETF follows the NASDAQ Golden Dragon China Index, which offers exposure to companies deriving the majority of their revenues from the People’s Republic of China. It holds a basket of 70 stocks, with Alibaba occupying the top position at 8.3% of the assets. Consumer discretionary and communication services sectors take the largest share at 47.6% and 24.1%, respectively (read: Worst-Performing ETFs of April).

Invesco Golden Dragon China ETF has AUM of $150.1 million and charges 67 bps in annual fees. It trades in an average daily volume of 52,000 shares and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

The Nightview Fund (NITE)

The Nightview Fund is an actively managed fund seeking long-term capital appreciation with the goal of outperforming the S&P 500 Total Return Index over a rolling 5-year period. It holds 19 stocks in its basket, with BABA occupying the fourth position at 7.1% of its assets. The Nightview Fund charges 1.25% in annual fees and trades in an average daily volume of 2,000 shares. It has accumulated $25.2 million in its asset base.

CoreValues Alpha Greater China Growth ETF (CGRO)

CoreValues Alpha Greater China Growth ETF is an actively managed fund that seeks to capitalize on Greater China's growth potential by investing primarily in equity securities of companies positioned in high-growth industries. It holds 30 stocks in its basket, with Alibaba occupying the fourth position at 7.09%. CoreValues Alpha Greater China Growth ETF has amassed $9.8 million in its asset base and trades in an average daily volume of under 1,000 shares. It charges 85 bps in annual fees.

ProShares Online Retail ETF (ONLN)

ProShares Online Retail ETF offers exposure to companies deemed to be "Online Retailers." It tracks the ProShares Online Retail Index, holding 19 stocks in its basket. Alibaba is the fourth firm, accounting for 6.02% of the portfolio. ProShares Online Retail ETF has amassed $75.4 million in its asset base and currently trades in a moderate volume of around 12,000 shares a day, on average. It charges 58 bps in annual fees from investors.

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This article originally published on Zacks Investment Research (zacks.com).

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