Alibaba Group Holding Ltd - ADR
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Earnings Call Q1 2027
August 20, 2026 - AI Summary
Cloud + AI momentum is the clear growth engine (and accelerating):
- Alibaba Cloud external revenue grew 45% YoY in the June quarter (described as a 22-quarter high).
- AI-related product revenue grew triple-digits for the 12th consecutive quarter, reaching RMB 12.4bn (≈ RMB 49.5bn annualized, ~$7.3bn).
- AI-related products = 35% of external cloud revenue (rising share supports mix/monetization strength).
- Management expects cloud growth to remain on an accelerated trajectory in coming quarters; they also guided an annualized AI-quarter revenue approaching ~$10bn in the next quarter (implying further step-up vs current run rate).
Profitability improving, but overall earnings/cash flow were pressured by infrastructure spend (good long-term, bad short-term):
- Cloud adjusted EBITDA margin reached 11.6% this quarter (Toby also cites 12% for AI-related product-driven cloud profitability); management expects further steady margin expansion sequentially.
- Group adjusted EBITDA fell 30% YoY to RMB 27.3bn, primarily due to technology/infrastructure investment, partially offset by cloud operating improvements.
- GAAP net income fell 75% YoY to RMB 10.4bn (management attributes to lower operating income and investment-related items like mark-to-market/disposals).
- CapEx was RMB 67.7bn (up sharply YoY); management clarified the spike was partly due to equipment delivery/ procurement cycle volatility and higher CPU procurement driven by agent demand + component price increases.
- Free cash flow was an outflow of RMB 44.7bn (worse vs prior year outflow), mainly from AI infrastructure investment.
Full-stack AI commercialization is the strategy (compute + MaaS + proprietary silicon), with supply constraints turning into an opportunity:
- Alibaba is upgrading toward an “agentic cloud.” Management said MaaS ARR exceeded RMB 16bn (as of August) and frames this as evidence of accelerating commercialization.
- Proprietary chips are scaling: T-Head chips serve >650 customers on Alibaba Cloud; Zhenwu M890 supernode launched at commercial scale.
- They claim hyperscale AI data center delivery time has been cut to ~100 days (to speed infrastructure build-out).
- Management expects compute demand to outstrip supply in the near term; as they ramp supply, AI/cloud revenue growth should accelerate further and profitability improve.
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$172.26
63.6% upside
Current Fair Value
63.6% upsideUndervalued by 63.6% based on the discounted cash flow analysis.
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Share Statistics
| Market cap | $245.80 Billion |
|---|---|
| Enterprise Value | $406.33 Billion |
| Annual dividend | $1.05 |
| Dividend yield | 1.06% |
| Earnings per Share | $45.6 |
| Beta | 0.46 |
| Outstanding Shares | 2,333,875,000 |
Return
| Return on Equity | 4.90% |
|---|---|
| Return on Assets | 2.62% |
| Return on Invested Capital | 4.48% |
Valuation & Multiples
| P/E Ratio | 21.24 |
|---|---|
| PEG | -28.71 |
| Price to Sales | 0.3 |
| Price to Book Ratio | 0.22 |
| Enterprise Value to Revenue | 0.49 |
| Enterprise Value to EBIT | 6.35 |
| Enterprise Value to Net Income | 7 |
| Total Debt to Enterprise | 0.85 |
| Debt to Equity | 0.33 |
Revenue Sources
No data
Last Earnings Call
Report Date
September 4, 2026
EPS Estimate
$1.94
Consensus analyst estimateRevenue Estimate
$39.99 B
Consensus analyst estimateNext Earnings Call
Expected Date
November 24, 2026
EPS Estimate
$1.61
Consensus analyst estimateRevenue Estimate
$40.25 B
Consensus analyst estimateInstitutional Put/Call Ratio
Compares institutional put options with call options. At 0.48, the ratio is below 1, so institutions hold more calls than puts.
| Put/Call Ratio | 0.4767▼ 47.76% |
|---|---|
| Total Calls | 3,285,679▼ 95.43% |
| Total Puts | 1,566,200▼ 97.72% |
Institutional Ownership
Holdings and activity of institutional investors.
| Ownership % | 0.61%▼ 9.47% |
|---|---|
| Total Invested | $1.54B▼ 93.10% |
| Investors Holding | 426▼ 953.00% |
About Alibaba Group Holding Ltd
131,462 employees
CEO: Yong Zhang
Alibaba Group Holding Limited, through its diverse subsidiaries, delivers comprehensive technological infrastructure and extensive marketing avenues, enabling merchants, brands, retailers, and various other businesses to effectively enga...