Alibaba (NYSE:BABA) is expected to report a 6% year-on-year rise in its revenue driven by growth in its cloud business and rapid AI adoption, during its first quarter results on August 29th, after market close.
Analysts expect the Chinese conglomerate’s EPS to dip 4.4% to $2.16, compared to the corresponding quarter a year ago. Revenue is seen coming in at $35.48B for the quarter.
Seeking Alpha analyst Multiplo Invest expects the company’s cloud business to be the highlight of its Q1 print.
“I estimate that the cloud business should grow 30% YoY. Remember that the company has implemented AI services quickly, such as its Qwen AI model. Alibaba promised to invest more than $50 billion in AI in the next 3 years,” the analyst said.
Speaking about the e-commerce segment, the analyst said that the company faces competition in the area, especially in the food delivery services. Despite its overall optimism on the company’s AI business, Multiplo Invest expressed some concerns over Alibaba’s AI investments.
“Alibaba indicated that it will invest $50 billion in artificial intelligence over the next 3 years. However, making an investment of this size without guarantees of using the most modern chips can be risky. Even domestic chips can bring challenges, such as technological limitations,” it said.
The analysts also highlighted potential risks stemming from China’s economic instability and geopolitical tension following President Trump’s threats of 200% tariffs if China does not offer magnets.
Multiplo Invest has rated BABA as Buy. Overall, Seeking Alpha analysts have a Buy rating for the stock, while Wall Street analysts appear more bullish with a Strong Buy rating. As per Seeking Alpha’s quant rating, BABA has been rated Hold.
Over the last 2 years, BABA has beaten EPS estimates 75% of the time and has beaten revenue estimates 63% of the time. Over the last 3 months, EPS estimates have seen 8 downward revisions but no upward moves. Revenue estimates have seen 1 upward revision and 6 downward adjustments.