Jefferies: Reiterates Alibaba as Top Pick for AI Investment Theme; Cloud Business and AI Demand Strong

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Golden Finance News reported that on July 8, Jefferies released a research report, forecasting that Alibaba’s revenue for the first fiscal quarter ended by the end of June this year will increase 9% year over year to approximately 270 billion yuan. The company’s overall EBITA is expected to reach approximately 26 billion yuan, higher than the market expectation of 24 billion yuan. The firm expects that, driven by strong AI demand—including model serving (MaaS) and growth in overall AI-related revenue—Alibaba Cloud Intelligence Group will be the biggest highlight of the quarter, with revenue forecast to grow 45% year over year, versus the market’s 41% forecast and the firm’s prior expectation of 40%. The forecast for the cloud business EBITA margin is expected to improve quarter over quarter to 11.5%. The firm also expects AIDC net profit to reach 583 million yuan (compared with the market expectation of 239 million yuan; the firm’s original expectation was only to break even). The firm maintains its “Buy” rating on Alibaba, reaffirming it as its top pick for the AI investment theme, with the US stock price target unchanged at $185 and the Hong Kong stock target unchanged at HK$179.
BABA11.10%
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