Alibaba Group today
- 52-week range
- $ 68.36
▼
$ 145.30
- Dividend yield
- 0.70%
- P/e ratio.
- 20.11
- Value is valuable
- $ 144.07
Alibaba Group shares NYSE: Baby On tears to start 2025. Consumer discretion and technical actions increased by 52% this year as of February 25. Cloud Computing Business impressed investors in its last issue on February 20.
Promotions grew by 8% in response. A few days later, Alibaba said she plans to spend more than $ 52 billion on cloud calculations and infrastructure of AI in the next three years.
So what should we do with these recent events around Alibaba? Will his strength continue and allow the shares to become a large long -term winner? I will try to answer these questions, plunging into the recent earnings of the company and analyzing its strategic positioning.
Destruction of the impressive results of Alibaba income
In the latest results Alibaba, her income was essentially in accordance with what analysts expected. Nevertheless, a large rhythm appeared at the adjusted profit per share. Its indicator of $ 2.95 exceeded forecasts by more than 10%. The growth in the cloud intelligence and international segments of the digital commerce of the company was impressive. The first grew by 13%, and the second – by 32%.
It is impressive that the growth of income from cloud intelligence for some time accelerates every quarter. In the 4th quarter of 2023, this part of the business grew by less than 3%. The Chief Executive Director (General Director) Eddie Wu mentioned that the products associated with AI are the key to this. The revenue from these products increased by more than 100% in a sixth quarter in a row. His Chinese segment of e -commerce, known as Taobao and Tmall, saw how sales are moderately grow by 5%.
Understanding the cloud of women and AI
Alibaba investment plan for $ 53 billion for Cloud and AI infrastructure for three years is equated with about 18 billion dollars a year. This is much less than about 40 billion dollars Microsoft NASDAQ: MSFT He seeks to invest only in the next two quarters. Nevertheless, it is still very large, given that the cloud business of Alibaba is much less.
Alibaba Group promotion today
$ 144.07
3.51% growthBuy
Based on 14 analyst ratings
| High forecast | $ 190.00 |
|---|---|
| Average forecast | $ 144.07 |
| Low forecast | $ 100.00 |
Detailed information about the shares of Alibaba Group
The company’s cloud income reached $ 14 billion last year. The intellectual income of Microsoft in the amount of almost $ 26 billion in the last quarter completely overshadows this amount. However, compared with the size of its business, cloud calculations, the planned costs of Alibaba are much larger.
To be clear, Alibaba does not compete directly with companies such as Microsoft. It competes with other Chinese companies in cloud computing. Nevertheless, a comparison of these planned expenses emphasizes that the “win AI” race is not only among American companies. Many see in promoting AI as an existential problem of national security, and China cannot just sit still.
The winners will appear in this country in the same way as in the United States. As of the 3rd quarter of 2024, Alibaba received the largest share of the cloud infrastructure market in China by 36%. This is almost twice as much as in the next closest player. Right now, Alibaba seems to be a leading horse and makes huge obligations in the future.
Considerations related to the government and the last thoughts about the woman
For several years, investment in the Chinese stock market was difficult. Over the past five years, ISHHARES MSCI China ETF NASDAQ: Mchi Provided the total profitability -4%. In the same period, the S&P 500 index received income by almost 99%. Government interference in the economy caused serious riots. Many investors completely avoid the country’s shares. Nevertheless, this also suggests that these shares can have significant potential for evaluation.
In my opinion, the Chinese government should release its private technological companies in order to compete with the United States in AI. There is evidence that the tension between government officials and technical leaders in the country weakens.
Chinese President Xi Jinping recently held a rare meeting with key Chinese technology leaders, including the founder of Alibaba Jack Ma. The meeting was behind the business, which indicates that the government is moving towards more work with its technological companies than against them.
In general, someone will have to help China to promote their technology of clouds and artificial intelligence. It seems that at the moment there is no one who is more prepared than Alibaba. Given the trends in the alarm of the government and the Chinese government, I am optimistic against Alibaba shares. Some Wall Street analysts also see the nearest rally far from the end. The average implied potential for the growth of seven price targets monitored by Marketbeat Post is 24% as of February 25.
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