Preview|BABA:Solid AI Demand in China, but Revenue Divergence Persists Among Investors

We See Midpoint of Buy-Side Range as Most Likely

Disclaimer: The content provided in this newsletter is for informational purposes only and does not constitute investment advice. We are not registered investment advisors, and nothing in this newsletter should be construed as a recommendation to buy or sell any securities. Always do your own research and consult with a licensed financial professional before making any investment decisions.

Our recent checks suggest Alibaba Cloud's revenue this quarter could fall within a relatively wide range of RMB 30.5–32.0B. The primary reason for this spread stems from RMB 7.5–9.0B in internal revenue (i.e., transfer payments from internal businesses like Taobao or Quark), which are booked based on varying gross margin assumptions (15% vs. 25%). Given these are intra-company transactions, financial adjustments can vary significantly. A RMB 30.5B print would imply ~19% YoY growth; RMB 32.0B implies ~25% YoY.