Walmart Beats Estimates; Alibaba Profit Craters 76%

Walmart, Alibaba, Deere, NetEase, and Ross Stores all report August 20, as WMT options price a $42 billion swing and Alibaba profits plunge 76% on AI spending.

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Walmart (WMT), Alibaba Group (BABA), Deere & Company (DE), NetEase (NTES), and Ross Stores (ROST) all delivered quarterly results on August 20, 2026, compressing a week's worth of market-moving data into a single session. Options traders had singled out the Walmart storefront and digital empire as the headline risk, pricing a 4.56% implied move that placed roughly $42 billion of market capitalization in play before the opening bell - a call-to-put ratio of one-to-one that reflected genuine two-sided uncertainty heading into the report.

Walmart: Storefront Traffic and Membership Drive Another Beat

Net sales for the fiscal second quarter of 2027 rose 5.9% year over year to $187.9 billion, exceeding Wall Street's expectations, while adjusted earnings per share of $0.81 came in 9.3% above consensus. Gross profit margin expanded to 25.4%, partly reflecting a tariff refund benefit absorbed during the period. Membership fee revenue surged 17%, with Walmart+ net additions reaching a second-quarter record, and advertising and third-party marketplace revenues contributed additional high-margin growth. Management raised the full-year net sales growth outlook to 4%-5% from a prior band of 3.5%-4.5% and lifted adjusted EPS guidance to $2.80-$2.87 from $2.75-$2.85. Despite the headline beat, WMT shares pulled back in early trading as investors assessed whether an elevated valuation capped further near-term upside.

Why Did the Alibaba Logo's Parent Company Sacrifice 76% of Its Profit?

Alibaba deliberately traded near-term income for artificial intelligence capacity. Revenue for the fiscal first quarter ended June 30 rose 9% to 268.95 billion yuan ($39.64 billion) - a healthy headline - but net income collapsed 76% to 10.54 billion yuan ($1.55 billion). Non-GAAP net income fell 38% and adjusted EBITA dropped 30%. Capital expenditure surged 75% to 67.68 billion yuan ($9.98 billion), channeled into AI infrastructure and model development at a pace that overwhelmed operating leverage. Within the business mix, China Quick Commerce revenue jumped 45% to 53.30 billion yuan as same-day and next-day delivery gained market share, while China E-commerce fell 8% to 110.90 billion yuan - reflecting a structural migration of everyday consumer spending toward faster fulfillment formats. The company had already posted its first operating loss since 2021 in the prior quarter; Q1 results show profit pressure extending into the new fiscal year.

Deere Marks the First Profit Rise in Three Years

Deere's fiscal third quarter, covering the period ended August 2, 2026, delivered its first year-over-year profit increase since 2023. Net income rose to $1.379 billion, or $5.10 per share, from $1.289 billion, or $4.75 per share a year earlier, beating the $4.70 consensus estimate. Revenue climbed 6% to $11.0 billion, topping the $10.73 billion forecast. Construction and forestry was the standout segment, with operating margin expanding to 12.1% from 7.7% a year ago. A $110 million tariff refund provided a meaningful one-quarter tailwind. Management raised the floor of full-year net income guidance to a $4.75 billion-$5.0 billion range from a prior lower bound of $4.5 billion. Chief Executive John C. May characterized 2026 as the cyclical bottom for agriculture equipment demand, signaling the company expects a multi-year recovery to follow.

NetEase Revenue Tops Forecasts but Earnings Miss Sends Shares Down 5%

NetEase's Q2 2026 revenue of RMB 30.11 billion ($4.14 billion) grew 7.9% year over year and cleared the RMB 29.48 billion consensus, but earnings per share of RMB 12.02 fell well short of the RMB 15.54 estimate, sending NTES shares down more than 5% in U.S. premarket trading. Games and related value-added services - the company's core franchise - generated RMB 25.0 billion, up 9.7%, demonstrating top-line resilience. Net income for the quarter reached $1.03 billion. Margin compression rather than any top-line deterioration drove the profit miss, leaving investors to weigh whether the shortfall reflects structural cost pressure or a transitory investment cycle.

What Should Investors Expect From Ross Stores After the Bell?

Ross Stores was scheduled to report Q2 2026 results at 4:00 p.m. ET, after the four other companies had already delivered their numbers. Consensus called for revenue of $6.1 billion, implying 10.7% growth, and EPS of $1.92, up 23.1% from a year earlier. The off-price retailer carried strong momentum into the report - Q1 revenue of $6.01 billion had surged 20.6% year over year - as consumers facing persistent household cost pressures continued shifting spending toward discounted-price retail formats.

What Do Five Reports in One Session Signal for Markets?

The August 20 session collectively highlighted three durable themes: U.S. consumer resilience, with Walmart's volume growth and Ross Stores' anticipated double-digit expansion pointing to steady household spending; the accelerating near-term cost of AI ambition, most visibly at Alibaba where a single quarter of infrastructure investment erased three-quarters of reported profit; and an inflection in global industrial demand, with Deere management explicitly calling the agriculture cycle floor. Tariff policy continued to generate asymmetric outcomes across sectors, contributing positively to both WMT and DE results through refund mechanisms even as broader trade uncertainty persisted.

Outlook

Walmart heads into the back half of fiscal 2027 with raised guidance, expanding high-margin revenue streams, and record Walmart+ additions, though an elevated valuation leaves limited room for execution error. Alibaba's profit trajectory will remain under pressure as AI infrastructure spending scales further before monetization materializes. Deere's recovery depends on the pace at which global agriculture markets normalize following an extended down-cycle. NetEase must close the gap between revenue outperformance and earnings delivery to restore investor confidence. Ross Stores' post-close results will offer a final consumer-health data point for the session - and a signal on whether off-price retail momentum extended through midsummer 2026.