Core Viewpoint - Alibaba's stock has declined over 4%, currently trading at 156 HKD, with a trading volume of 20.43 billion HKD. Goldman Sachs has significantly raised its capital expenditure forecast for Alibaba for the fiscal years 2026-2028 to 460 billion RMB, indicating a positive outlook driven by advancements in AI and international expansion potential [1][1][1] Group 1: Financial Performance - Goldman Sachs expects Alibaba's EBITA for the September quarter to decline by 80% year-on-year, primarily due to investments in the instant e-commerce business, which includes food delivery services [1][1] - The instant e-commerce business reported a loss of 11 billion RMB in the June quarter, which is anticipated to increase to 36 billion RMB in the September quarter [1][1] Group 2: Growth Potential - The breakthrough advancements in Alibaba's AI cloud computing capabilities and the potential for international expansion are seen as new drivers for stock price growth [1][1] - Goldman Sachs projects that by the fiscal year 2028, international business will contribute to one-fourth of Alibaba Cloud's external revenue [1][1] Group 3: Stock Rating - Goldman Sachs has raised its target price for Alibaba's U.S. and Hong Kong stocks by approximately 14% while maintaining a "Buy" rating [1][1]

Core Viewpoint - Goldman Sachs has significantly raised Alibaba's (09988, BABA.US) capital expenditure forecast for the fiscal years 2026-2028 to 460 billion RMB, marking one of the most aggressive predictions on Wall Street, driven by AI capital expenditure transformation reshaping growth expectations [1] Group 1: Capital Expenditure and Growth Expectations - The capital expenditure forecast for Alibaba is set at 460 billion RMB under the base case, with a conversion ratio of capital expenditure to revenue between 0.2-0.3; optimistic scenario predicts 550 billion RMB with a conversion ratio exceeding 0.3; pessimistic scenario sees expenditure drop to 380 billion RMB with a conversion ratio below 0.2 [2] - Analysts believe Alibaba's development trajectory lags behind U.S. cloud service giants like Amazon AWS and Google Cloud by about two years, correlating with technological breakthroughs such as ChatGPT and DeepSeek [1][2] - Alibaba's current data center capacity is estimated at 3-4 GW, with plans to expand to 20 GW by 2032, necessitating an annual addition of approximately 2 GW capacity, supporting large-scale capital investment over the next three years [1] Group 2: International Expansion and Revenue Growth - Alibaba Cloud has established 91 availability zones across 29 regions, with international business revenue expected to grow from single digits to about 25% by the fiscal year 2028, reflecting a high double-digit compound annual growth rate [2] - The international pricing of Alibaba Cloud's Qwen model is significantly higher than domestic levels, indicating a premium in overseas markets [2] - Alibaba Cloud is accelerating the construction of its first data centers in Brazil, France, and the Netherlands, while upgrading existing facilities in Mexico and Japan, adding 28 AI-specific suites [2] Group 3: Short-term Challenges - Despite the upward revision of target prices, Alibaba faces short-term challenges, with a projected 80% year-on-year decline in group EBITA for the September quarter due to investments in instant commerce [3] - The instant commerce business, including food delivery, is expected to incur losses of 36 billion RMB in the September quarter, up from 11 billion RMB in June [3] - Competition in the instant commerce sector is seen as a critical variable, with market share expected to stabilize at a ratio of 5:4:1 among Meituan, Alibaba, and JD.com [3]