The Motley Fool·2025-12-02 14:53Core Viewpoint - Alibaba Group Holding is positioned as a strong investment opportunity in the AI cloud sector, potentially outperforming major competitors like Amazon, Microsoft, and Alphabet by 2026 [2][15]. Company Overview - Alibaba has a market capitalization of $375 billion, significantly smaller than the $2.5 trillion market caps of Amazon, Microsoft, and Alphabet [3]. - The company operates a global wholesale B2B marketplace, Alibaba.com, featuring over 5,900 product categories and more than 200 million products available for trade in over 200 countries [4]. E-commerce Performance - Alibaba's e-commerce revenue for the quarter ending September was $14.46 billion, reflecting a 9% year-over-year increase [5]. - Including "quick commerce" sales, Alibaba's total e-commerce revenue reached $18.62 billion, a 16% increase from the previous year, with international digital commerce revenue at $4.88 billion, up 10% [6]. - In comparison, Amazon's e-commerce revenue for the same quarter was $147.16 billion, with a 12% year-over-year growth [6]. AI Cloud Growth - Alibaba's Cloud Intelligence Group generated $5.59 billion in revenue for the September quarter, marking a 34% increase from the same period last year, driven by public cloud revenue growth and AI product adoption [10]. - The company holds a 35.8% market share in China's cloud computing market, the largest in the region [11]. Valuation and Future Outlook - Alibaba is noted for having the most attractive forward price-to-earnings and price-to-sales ratios among cloud computing stocks [12]. - Revenue growth for Alibaba is projected at 9% for the next fiscal year, surpassing expected growth rates for Amazon (1.45%) and Alphabet (4.7%), while Microsoft is expected to grow by 17.8% [14].