ZACKS·2025-04-08 20:00Core Insights - Alibaba Group (BABA) and Amazon.com (AMZN) are leading players in the global e-commerce landscape, each dominating their respective markets with significant cloud computing operations and technological advancements [1][2][26] - Alibaba has shown resilience and growth despite regulatory challenges, with strong financial results indicating a solid market position [4][27] - Amazon continues to excel in North America, demonstrating robust revenue growth and a competitive edge through its Prime membership program and logistics network [12][13][26] Alibaba's Performance - Alibaba reported consolidated revenues of RMB280,154 million ($38,381 million) for the December quarter, an 8% year-over-year increase, with operating income surging 83% to RMB41,205 million [4] - The company's core e-commerce operations thrived, with customer management revenues in Taobao and Tmall Group growing 9% year over year, and the number of high-value VIP members reaching 49 million [5] - Alibaba's cloud business saw a 13% year-over-year revenue growth, with AI-related product revenues maintaining triple-digit growth for six consecutive quarters [6] - The International Digital Commerce Group experienced a 32% year-over-year growth, reflecting strong cross-border business performance [7] - The Zacks Consensus Estimate for fiscal 2025 revenues is $138.29 billion, indicating a 5.97% year-over-year growth [8] Amazon's Performance - Amazon reported total revenues of $187.79 billion for the fourth quarter of 2024, up 10.49% year over year, with a 10% revenue growth in its North America segment [12] - Amazon Web Services (AWS) revenues grew 19% year over year, reaching a $115 billion annualized revenue run rate, driven by significant investments in AI infrastructure [14] - The advertising business generated $17.3 billion in revenues in the fourth quarter of 2024, up 18% year over year, with an annual revenue run rate of $69 billion [15] - The Zacks Consensus Estimate for 2025 net sales is $696.84 billion, indicating a growth of 9.23% from the prior year [16] Valuation Comparison - Alibaba's price-to-cash flow ratio is 11.84X, more attractive than Amazon's 16.29X, indicating better relative value for investors [19][20] - Over the past year, Alibaba shares surged 45.2%, significantly outperforming Amazon, which lost 5.6% [22][26] - Alibaba's strategic investments in AI and cloud computing, along with its favorable valuation, position it for potentially stronger returns compared to Amazon [26][27] Conclusion - Both companies are making strategic investments in AI, cloud infrastructure, and international expansion, but Alibaba currently offers superior growth potential at a more attractive valuation [26][27][28] - Investors seeking exposure to global digital transformation may find greater upside potential with Alibaba shares in the current market environment [28]