30 June 2025 Global Software, U.S. and China Internet Cloud in the Quarter: How did the hyperscale clouds do in Q1 2025? Mark L. Moerdler, Ph.D. +1 917 344 8506 mark.moerdler@bernsteinsg.com Mark Shmulik +1 917 344 8508 mark.shmulik@bernsteinsg.com Robin Zhu +852 2123 2659 robin.zhu@bernsteinsg.com Firoz Valliji, CFA +1 917 344 8316 firoz.valliji@bernsteinsg.com Shelly Tang, CFA +1 917 344 8342 shelly.tang@bernsteinsg.com Charles Gou +852 2123 2618 charles.gou@bernsteinsg.com The concern overhanging IaaS/Pa ...

Alibaba Group 2025 AIC: Growth intact despite near-term margin volatilities Cloud: an accelerating growth trajectory Growth outlook: Management remains constructive on cloud outlook and is confident in an accelerating topline growth over next few quarters. This also echoes with the increased inferencing demand post DeepSeek launch. Growth is expected to be broad- based across verticals, with the increasing adoption in new verticals such as the conventional industries an encouraging sign. Margin outlook: Emp ...

ab 16 May 2025 Global Research First Read Alibaba Group 4QFY25 slight miss; thesis unchanged despite short-term margin fluctuation 4QFY25 slight missed Revenue +7% YoY, and adj. EBITA +36% YoY. Both missed by 1-2% (quick take). Key focuses 1) Taobao Tmall (TTG) outlook (mixed): Topline (+ve): CMR accelerated to +12% YoY (Dec Q's +9%), beat by 3%. For Mar Q, the take rate improvement (0.6% software service fee, and improving sitewide promotion tool adoption) and GMV mix shift to higher-commissioned Tmall (TT ...

Global Research ab 16 May 2025 First Read Alibaba Group 4QFY25 slight miss; thesis unchanged despite short-term margin fluctuation 4QFY25 slight missed Revenue +7% YoY, and adj. EBITA +36% YoY. Both missed by 1-2% (quick take). Key focuses This report has been prepared by UBS Securities Asia Limited. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 6. UBS does and seeks to do business with companies covered in its resea ...

Core Viewpoint - Morgan Stanley is optimistic about Alibaba's valuation, highlighting its dual role as both an AI enabler (cloud computing) and an AI adopter (especially in e-commerce), suggesting potential upside in cloud revenue growth and profit margins due to surging AI demand [1][2]. Group 1: AI Enabler - Alibaba Cloud is the only major cloud service provider in China offering substantial GPU capacity to external clients, expected to see revenue growth accelerate to 25% in FY2026, benefiting from explosive growth in AI inference demand [2][3]. - The cloud business is strategically focused on external clients, distinguishing it from competitors like Tencent and ByteDance, which have higher internal AI computing needs [5]. - Alibaba's cloud revenue growth is projected to increase from 13% in Q3 FY2025 to 18% in Q4 FY2025, reaching 25% in FY2026 [3]. Group 2: AI Adopter - As an early adopter of AI, Alibaba is integrating AI capabilities into its super apps (Taobao, Amap, DingTalk, Quark), leveraging proprietary e-commerce user data to enhance revenue through improved commission rates and ad conversion rates [6]. - The potential for revenue growth from AI integration in e-commerce is not fully reflected in the market, with projected GMV and CMR growth of 4% and 6% respectively for 2026, excluding AI's impact [6]. Group 3: Market Opportunities - Alibaba is entering the instant retail market, projected to reach a market size of RMB 2 trillion (approximately $267 billion) by 2030, with a compound annual growth rate of 20% [7]. - The integration of instant retail products into the Taobao app has led to over 10 million daily orders within six days of launch, indicating strong consumer demand [11]. - Alibaba's strategy for instant retail leverages Taobao's traffic and Ele.me's delivery capabilities without compromising profitability [11].