Alibaba (BABA)
June-quarter 2026 revenue rose 9% YoY to ~RMB 269B. Cloud/AI external revenue accelerated to +45%, with AI-related products delivering a 12th consecutive quarter of triple-digit growth. Core e-commerce (customer management revenue) remains soft amid competition and macro pressures; overall profitability was impacted by heavy AI investments and lower investment gains. New models (Qwen series) and agentic tools are advancing.
Shares have recovered from 52-week lows but remain volatile (recently around the $120 area). Valuation is inexpensive relative to AI/cloud growth potential; many analysts maintain Buy ratings with meaningful upside targets.
Future potential: Improving via AI/cloud transformation, which is increasingly offsetting e-commerce headwinds. Success depends on sustained cloud margin expansion and monetization of models. Geopolitical and regulatory risks persist. Attractive for clients seeking Chinese tech exposure with a clearer AI growth path.
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- BerniceCarter·08-23 10:32Cloud plus 45% and 12 straight quarters of triple digit AI growth matter more than the soft commerce print. If cloud margin keeps expanding, this rerates fast.LikeReport