《Big Moves》: Bank of America Securities expects Alibaba (09988.HK) cloud business to post impressive first-quarter growth, reiterating its “Buy” rating

Bank of America Securities published a research report, forecasting Alibaba (09988.HK) to gain 2.200 (+2.037%). Short selling amounts to $1.46B; the ratio is 24.272% as of end of June this year. In the first fiscal quarter, revenue is expected to grow year-on-year by 8.8%, in line with market expectations. Strong AI demand is expected to drive cloud business revenue to grow 45% year-on-year, compared with 38% in the previous quarter. The cloud business profit margin is forecast to improve from 9% to 11%, meeting management guidance.

The broker expects Alibaba’s CMR for this quarter to fall 7.7% year-on-year, reflecting a softer industry environment in the second quarter of this year. Overall EBITA is forecast to reach about RMB 26.2 billion, a 33% decline year-on-year.

Of this, China e-commerce EBITA (excluding new retail) is expected to fall 3.3% year-on-year, mainly due to continued improvement in operating efficiency and the continued effectiveness of marketing expense optimization. Losses from new retail are narrowed to about RMB 10 billion, compared with about RMB 18 billion in the previous quarter; losses from other businesses narrow from RMB 21 billion to about RMB 17 billion.

Related content 《Big firms》 CMB Securities cuts Alibaba (09988.HK) target price to 170 yuan, maintains a “Buy” rating.

Bank of America Securities believes that fiscal year 2027 will mark a key turning point for Alibaba’s profitability. Core e-commerce profits are set to return to growth as losses from new retail narrow significantly, providing sustainable cash flow to support cloud development and AI investment. It forecasts that overall adjusted EBITA will rise from about RMB 76 billion in fiscal year 2026 to about RMB 103 billion in fiscal year 2027. It keeps revenue forecasts for fiscal years 2027 to 2028 broadly unchanged, raises profit forecasts for fiscal years 2027 to 2028 by up to 2% at most, and keeps target prices for Hong Kong and US stocks unchanged at HK$168 and $172 respectively, reaffirming a “Buy” rating. (gc/j)(Hong Kong stock quotes are delayed by at least 15 minutes. Short selling data as of 2026-07-10 12:25.)