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Can Strong Cloud Growth Propel Alibaba's (BABA) Q1 Earnings?
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Alibaba Group Holding Limited’s (BABA - Free Report) expanding core commerce and cloud portfolio are expected to reflect on fiscal first-quarter results, slated to release on Aug 20.
The cloud business has fast emerged as a major contributor to top-line growth. Cloud computing has been emerging as a key technology to fight the battle against the coronavirus pandemic. This technology has been witnessing higher usage globally as it allows data interoperability in a scalable, cost-efficient way by data collection, processing, analyzing and sharing across platforms.
In the last reported quarter, revenues from the cloud computing segment increased 58% from the prior-year quarter to RMB12.2 billion (US$1.73 billion). Also, revenues from its core commerce segment were up 19% year over year to RMB93.9 billion (US$13.3 billion).
The Zacks Consensus Estimate for fiscal first-quarter cloud computing segment revenues is pegged at US$1.72 billion, indicating a decline of 0.5% from the year-ago reported figure. However, the consensus mark for core commerce revenues is pegged at $17.9 billion, indicating an improvement of 34.9% from the year-ago reported figure.
Click here to know how the company’s overall fiscal first-quarter results are expected to be.
Innovation in data technology, widespread application of big data, and increasing validation for Taobao and Tmall portals are likely to have expanded revenues from the cloud computing segment in the to-be-reported quarter.
Revenues from this segment have been impressive over the last few quarters. Sales growth is likely to have got a boost, driven by an increase in the number of paying customers and improved revenue mix of higher valued-added services.
During the quarter, Alibaba Cloud partnered with Unilever, one of the biggest multinational consumer goods companies. Per the deal, Unilever will be able to utilize Alibaba’s artificial intelligence and cloud-based technologies to optimize its online and offline demand. The deal is expected to have helped Alibaba expand the customer base and contribute to the top line.
Moreover, it has been making all efforts to provide medical workers across the world with advanced cloud-based apps to help in the battle against the coronavirus.
These steps taken by the company highlight the growing importance of the cloud business, which is likely to have boosted revenues in the quarter.
Alibaba rolled out a number of products based on emerging technologies of Artificial Intelligence, Machine Learning and Internet of Things to cater to rising demand for cloud architecture, along with data analytics and security in the retail industry.
These products, which are expected to develop a collaborative management platform across various businesses, should have driven its revenues in the to-be-reported quarter.
Markedly, cloud revenues are expected to have increased in the quarter, owing to an increase in spending from enterprise customers. The company has been continually adding new features to cloud offerings for driving customer spending.
Its customer base expanded in the Asia-Pacific region, driven by portfolio strength. The expanding clientele is likely to have driven net sales of this segment in the quarter.
Alibaba’s cloud computing business has been gaining a lot of traction. It is a dominant force in China but has also gained traction in other regions. The company has opened new data centers across the world. These factors are anticipated to reflect on its upcoming results.
Given the dominant position of Alibaba’s cloud business in China and aggressive international expansion strategies, cloud computing is expected to have been one of the major growth drivers in the quarter to be reported.
Zacks Rank & Key Picks
Currently, Alibaba carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Lam Research Corporation (LRCX - Free Report) and Maxim Integrated Products, Inc. . While Lam Research sport a Zacks Rank #1 (Strong Buy), both Dropbox and Maxim carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate of Dropbox, Lam Research, and Maxim is pegged at 34.4%, 15.4% and 10%, respectively.
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Can Strong Cloud Growth Propel Alibaba's (BABA) Q1 Earnings?
Alibaba Group Holding Limited’s (BABA - Free Report) expanding core commerce and cloud portfolio are expected to reflect on fiscal first-quarter results, slated to release on Aug 20.
The cloud business has fast emerged as a major contributor to top-line growth. Cloud computing has been emerging as a key technology to fight the battle against the coronavirus pandemic. This technology has been witnessing higher usage globally as it allows data interoperability in a scalable, cost-efficient way by data collection, processing, analyzing and sharing across platforms.
In the last reported quarter, revenues from the cloud computing segment increased 58% from the prior-year quarter to RMB12.2 billion (US$1.73 billion). Also, revenues from its core commerce segment were up 19% year over year to RMB93.9 billion (US$13.3 billion).
The Zacks Consensus Estimate for fiscal first-quarter cloud computing segment revenues is pegged at US$1.72 billion, indicating a decline of 0.5% from the year-ago reported figure. However, the consensus mark for core commerce revenues is pegged at $17.9 billion, indicating an improvement of 34.9% from the year-ago reported figure.
Click here to know how the company’s overall fiscal first-quarter results are expected to be.
Alibaba Group Holding Limited Revenue (TTM)
Alibaba Group Holding Limited revenue-ttm | Alibaba Group Holding Limited Quote
Delving Deeper
Innovation in data technology, widespread application of big data, and increasing validation for Taobao and Tmall portals are likely to have expanded revenues from the cloud computing segment in the to-be-reported quarter.
Revenues from this segment have been impressive over the last few quarters. Sales growth is likely to have got a boost, driven by an increase in the number of paying customers and improved revenue mix of higher valued-added services.
During the quarter, Alibaba Cloud partnered with Unilever, one of the biggest multinational consumer goods companies. Per the deal, Unilever will be able to utilize Alibaba’s artificial intelligence and cloud-based technologies to optimize its online and offline demand. The deal is expected to have helped Alibaba expand the customer base and contribute to the top line.
Moreover, it has been making all efforts to provide medical workers across the world with advanced cloud-based apps to help in the battle against the coronavirus.
These steps taken by the company highlight the growing importance of the cloud business, which is likely to have boosted revenues in the quarter.
Alibaba rolled out a number of products based on emerging technologies of Artificial Intelligence, Machine Learning and Internet of Things to cater to rising demand for cloud architecture, along with data analytics and security in the retail industry.
These products, which are expected to develop a collaborative management platform across various businesses, should have driven its revenues in the to-be-reported quarter.
Markedly, cloud revenues are expected to have increased in the quarter, owing to an increase in spending from enterprise customers. The company has been continually adding new features to cloud offerings for driving customer spending.
Its customer base expanded in the Asia-Pacific region, driven by portfolio strength. The expanding clientele is likely to have driven net sales of this segment in the quarter.
Alibaba’s cloud computing business has been gaining a lot of traction. It is a dominant force in China but has also gained traction in other regions. The company has opened new data centers across the world. These factors are anticipated to reflect on its upcoming results.
Given the dominant position of Alibaba’s cloud business in China and aggressive international expansion strategies, cloud computing is expected to have been one of the major growth drivers in the quarter to be reported.
Zacks Rank & Key Picks
Currently, Alibaba carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Lam Research Corporation (LRCX - Free Report) and Maxim Integrated Products, Inc. . While Lam Research sport a Zacks Rank #1 (Strong Buy), both Dropbox and Maxim carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate of Dropbox, Lam Research, and Maxim is pegged at 34.4%, 15.4% and 10%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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