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Globe and Mail
a day ago
- Business
- Globe and Mail
Alibaba Cloud's Rapid Rise: Is AI Setting Up More Upside Ahead?
Alibaba 's BABA Cloud Intelligence Group is gaining strong momentum as its core unit, Alibaba Cloud, continues to scale with rising AI adoption, an area that is expected to remain a key driver of accelerated revenue growth. BABA's AI products are seeing broader adoption across a wide range of industry verticals, including Internet, retail, manufacturing and media, with a growing focus on value-added applications. Building on this momentum, Alibaba expects demand to accelerate in the coming quarters. The company highlighted that many businesses are moving away from traditional, in-house infrastructure and shifting AI workloads to the cloud. To meet this shift, the company is increasing investments in AI products and services, to increase cloud adoption for AI and maintain its market leadership. This focus is already showing through in product innovation and global expansion. In April, Alibaba released its Qwen3 model series, an open-source family of AI models built for tasks like coding and general reasoning. Globally, Alibaba Cloud is expanding its footprint with a second data center set to launch in South Korea by the end of June. New partnerships with SAP and Panasonic further integrate Alibaba's AI tools into enterprise operations and connected home ecosystems. In the fourth quarter of fiscal 2025, Alibaba's Cloud Intelligence Group generated RMB 30.1 billion ($4.15 billion) in revenues, up 18% year over year, contributing around 12.7% of total revenues. This was driven by the increasing adoption of AI-related products. With AI-related product revenues growing at triple digits for seven straight quarters, Alibaba Cloud is fast becoming the foundation of the company's AI-driven future. BABA Faces Stiff Competition in the AI-Driven Cloud Race Several players are competing with Alibaba Cloud in AI-powered cloud services, with Amazon AMZN and Microsoft MSFT expanding rapidly. Amazon recently added Claude 4 to Amazon Bedrock, strengthening its generative AI lineup and simplifying enterprise AI development. Bedrock remains a core part of Amazon's AWS' strategy to drive AI adoption. Microsoft is advancing through its Azure AI Essentials program, launched under its AI Center of Excellence. This initiative by Microsoft offers tools and guidance to help businesses scale AI responsibly. BABA's Share Price Performance, Valuation and Estimates BABA shares have gained 34.3% in the year-to-date (YTD) period, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector's growth of 4.2% and 2.8%, respectively. BABA's YTD Price Performance From a valuation standpoint, BABA stock is currently trading at a forward 12-month Price/Earnings ratio of 10.37X compared with the industry's 24.39X. BABA has a Value Score of B. BABA Valuation The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings is pegged at $2.48 per share, which has remained steady over the past 30 days, indicating 9.73% year-over-year growth. The consensus mark for fiscal 2026 earnings is pegged at $10.62 per share, which has remained steady over the past 30 days. The estimate indicates 17.87% year-over-year growth. Alibaba currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Alibaba Group Holding Limited (BABA): Free Stock Analysis Report
Yahoo
23-05-2025
- Business
- Yahoo
CMB International Securities Maintains a Buy Rating on Alibaba (BABA), Lowers PT
On May 19, Saiyi He, an analyst from CMB International Securities, maintained a Buy rating on Alibaba Group Holding Limited (NYSE:BABA) and lowered the associated price target to $155.50 from $157. The rating came after the company's strong March quarter fiscal 2025, as it delivered a 7% revenue growth and a notable EBITA growth of 36%. Christopher Penler / The analyst attributed this growth to improved profitability across the company's business segments, especially in the Taobao and Tmall Groups, where customer management revenue rose 12% in the quarter. Alibaba Group Holding Limited's (NYSE:BABA) solid performance is anticipated to continue in the next fiscal quarter, supported by higher take rates and healthy GMV growth. The analyst also supported the Buy rating with promising revenue growth in the company's Cloud Intelligence Group, and anticipates further acceleration with a rise in digitalization demand. Quarterly revenue growth in the Cloud Intelligence Group accelerated to 18%, while AI-related product revenue attained triple-digit growth for the seventh consecutive quarter. Saiyi He sees Alibaba Group Holding Limited's (NYSE:BABA) ongoing investments in R&D and technology as a strong base for long-term growth in the cloud sector. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BABA and that has 100x upside potential, check out our report about the . READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-05-2025
- Business
- Yahoo
CMB International Securities Maintains a Buy Rating on Alibaba (BABA), Lowers PT
On May 19, Saiyi He, an analyst from CMB International Securities, maintained a Buy rating on Alibaba Group Holding Limited (NYSE:BABA) and lowered the associated price target to $155.50 from $157. The rating came after the company's strong March quarter fiscal 2025, as it delivered a 7% revenue growth and a notable EBITA growth of 36%. Christopher Penler / The analyst attributed this growth to improved profitability across the company's business segments, especially in the Taobao and Tmall Groups, where customer management revenue rose 12% in the quarter. Alibaba Group Holding Limited's (NYSE:BABA) solid performance is anticipated to continue in the next fiscal quarter, supported by higher take rates and healthy GMV growth. The analyst also supported the Buy rating with promising revenue growth in the company's Cloud Intelligence Group, and anticipates further acceleration with a rise in digitalization demand. Quarterly revenue growth in the Cloud Intelligence Group accelerated to 18%, while AI-related product revenue attained triple-digit growth for the seventh consecutive quarter. Saiyi He sees Alibaba Group Holding Limited's (NYSE:BABA) ongoing investments in R&D and technology as a strong base for long-term growth in the cloud sector. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BABA and that has 100x upside potential, check out our report about the . READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-05-2025
- Business
- Yahoo
Use This Tool to Find Hot China Stocks
The Zacks China Technology thematic screen focuses on China-based technology companies listed on the U.S. stock market, including firms that provide internet services, batteries, and online businesses such as e-commerce, online advertising, online media, online gaming, and social networking platforms. A top-ranked stock that the screen returned includes Alibaba BABA. Let's take a quick look at a few details of the screen before sizing up how BABA presently stands. China Tech. China Tech. broadly refers to China-based technology companies across various domains. These firms are leaders in their respective fields and have created a niche market as Beijing aims to reduce reliance on Western technology. The key technology aspects that have gained prominence in recent times are semiconductors, artificial intelligence, high-performance computing, industrial robots, data centers, satellites, quantum computing, and wireless broadband. Alibaba shares have been notably strong over the last month, gaining more than 25% and outpacing the S&P 500's 20% gain. The company's EPS outlook remains bullish for its current and next fiscal year, helping land the stock into a favorable Zacks Rank #2 (Buy). Image Source: Zacks Investment Research Notably, its AI-related product revenue throughout its latest period maintained a triple-digit percentage year-over-year growth rate for the seventh consecutive period, with its Cloud Intelligence Group also seeing 18% YoY growth. More Picks There were several other top-ranked stocks that the screen returned, which include Microvast MVST, GDS Holdings GDS, and Kingsoft Cloud KC. To see the full list of stocks that the screen returned, please click here – Zacks Thematic Screens – China Technology. Bottom Line Zacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you. Upon running the Zacks China Tech screen, top-ranked Alibaba BABA, among others, was returned. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report GDS Holdings (GDS) : Free Stock Analysis Report Kingsoft Cloud Holdings Limited Sponsored ADR (KC) : Free Stock Analysis Report Microvast Holdings, Inc. (MVST) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Alibaba Doesn't Meet Lofty Expectations
Alibaba missed expectations for both earnings and revenue in its fiscal fourth quarter. The trade tensions and economic turbulence are worth watching going forward. Alibaba's free cash flow dropped sharply due to higher AI investment. 10 stocks we like better than Alibaba Group › Here's our initial take on Alibaba's (NYSE: BABA) fiscal 2025 fourth-quarter financial report. Metric Q4 2024 Q4 2025 Change vs. Expectations Revenue RMB 221.9 billion RMB 236.5 billion 7% Missed Adjusted EPS RMB 10.14 RMB 12.52 23% Missed Free cash flow RMB 15.58 billion RMB 3.74 billion -76% n/a Cloud Intelligence Group revenue RMB 25.6 billion RMB 30.1 billion 18% n/a In its latest fiscal quarter, Alibaba generated the U.S. dollar equivalent of about $32.6 billion in revenue, up about 7% year over year, although this failed to meet the expectations of analysts. On the bottom line, Alibaba's adjusted earnings increased significantly but also fell short of estimates. Within the business, Alibaba's growth was relatively strong. Customer management revenue in the flagship Taobao and Tmall Group China e-commerce platforms grew by 12% on improved take rates. The Alibaba International Digital Commerce Group grew by 22% on strong cross-border business. And the Cloud Intelligence Group, which includes the company's artificial intelligence (AI) efforts, saw revenue grow by 18%. During the quarter, Alibaba spent about $600 million on buybacks of shares traded in the U.S., which makes its trailing-12-month total spending $11.9 billion. As a result, Alibaba's outstanding shares have declined by more than 5% compared with a year ago. The initial market reaction to Alibaba's earnings report was negative. As of 6:45 a.m. EDT on Thursday, Alibaba stock was down 5% for the day. This isn't surprising considering the misses on the top and bottom lines while capex is elevated. Looking ahead, it will be worth watching if the ongoing trade tensions between the U.S. and China have any effect on the nation's economy, either directly or indirectly. After all, keep in mind that this quarter took place before the Trump administration's big reciprocal-tariff announcement. Alibaba's AI investments will also be important to keep an eye on, as the company recently launched the newest version of its Qwen large language model. You'll notice in the chart above that Alibaba's free cash flow declined by 76% year over year, and the primary reason was increased investment in cloud infrastructure. Full earnings report Investor relations page Before you buy stock in Alibaba Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alibaba Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $613,951!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $796,353!* Now, it's worth noting Stock Advisor's total average return is 948% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Matt Frankel has no position in any of the stocks mentioned. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy. Alibaba Doesn't Meet Lofty Expectations was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
