Recent earnings results from Alibaba Group Holding (NYSE: BABA) showed a return to growth. With a double-digit increase in net sales, a massive profit surge, and an increased emphasis on artificial intelligence (AI), Alibaba might appear ready for a comeback.

However, it has failed to bring long-term investor returns. And despite respectable earnings in the second quarter of 2023, investors should consider avoiding the stock for two reasons.

Alibaba might seem like a no-brainer buy when looking at its earnings in the second quarter of 2023. Its $32 billion in revenue rose 14% from year-ago levels. Operating margin was 18%, up from 12% in the year-ago quarter. This helped the company earn net income of $4.6 billion, an increase of 63% from the same quarter last year.

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Source Fool.com