Just before Alibaba reports its quarterly results in May, three major investment banks have just released analyses that are quite aligned on what to expect. And honestly, there are interesting things here that go beyond short-term numbers.

The first thing that jumps out: the cloud business is accelerating. Morgan Stanley projects it will grow from 36% to over 40% this quarter, with EBITA margins remaining at 9%. But what’s really important is what comes next. MaaS (model as a service) is the medium-term driver. Today it accounts for less than 10% of cloud revenue, but they estimate it could be over 50% in five years. Management has set a long-term EBITA margin target of 20%, so there’s plenty of room for improvement from where we are.

Qwen is gaining serious traction in the Chinese enterprise market. Its token share jumped from 18% in the first half of 2025 to 32% in the second half. HSBC reports that the app reached 223 million monthly active users in February, with a 30-day retention rate of 39%. That’s clear leadership among models.

Now, what many were waiting for: instant retail commerce finally begins to show signs that the wildest spending has passed. Morgan Stanley estimates losses of about 18 billion yuan in Q4, down from 22 billion in the previous quarter. But what’s relevant is the path management outlined: reducing annual losses by half in FY27 (from about 86 billion to 43 billion), and again halving in FY28, reaching breakeven in FY29. Nomura agrees with this projection. The three institutions agree that the most intense phase of the retail commerce war is behind us. Alibaba is pivoting from “gaining market share” to “improving efficiency,” which should also ease some pressure on the delivery business.

In the e-commerce segment, customer management revenue (CMR) shows a recovery. Comparatively, it would grow 7% annually in Q4, much better than the 1% in the previous quarter. However, there’s an accounting shift: Alibaba will reclassify certain incentives that were previously marketing expenses as “deductions” from CMR. This makes reported growth only around 1%, although HSBC estimates that the adjustment creates a difference of about 6 percentage points. Excluding instant retail commerce, e-commerce EBITA should remain practically flat versus the previous year, a clear improvement from the -7% decline a quarter ago.

Regarding valuation: the three banks have target prices between $172 and $200, implying a potential upside of over 40% from the current ~$120. Morgan Stanley maintains an overweight rating with a target of $180 (equivalent to a P/E of 23 times for FY28), while Nomura is more optimistic with $200 (P/E ~20 times for FY28). HSBC slightly lowered its target from $180 to $172, mainly due to higher estimated losses in other businesses.

The consensus is clear: the monetization path of AI is becoming increasingly visible, the timeline to reduce losses is already set, and the current valuation still doesn’t fully capture these two core dynamics. The real question this season is not whether immediate profits will be attractive, but whether Alibaba can fulfill that double promise: reducing losses while accelerating cloud growth.