Yahoo Finance Will Cloud Strength Benefit Alibaba's (BABA) Q4 Earnings?
Alibaba Group Holding Limited’s BABA fourth-quarter fiscal 2023 results, slated for release on May 18, are expected to reflect the impacts of the strengthening cloud computing segment.
Moreover, the segment has turned out to be one of the key contributors to the company’s overall top-line growth.
In the last reported quarter, revenues from the cloud computing segment increased 3% from the prior-year period to RMB 20.2 billion ($2.92 billion), accounting for 8% of the total revenues.
Click here to know how the company’s overall fiscal fourth-quarter performance is expected to have been.
Alibaba Group Holding Limited Price and Consensus
Alibaba Group Holding Limited price-consensus-chart | Alibaba Group Holding Limited Quote
Factors to Note
Increasing spending from enterprise customers, driven by Alibaba’s continued efforts to add features to its cloud offerings, is likely to have driven the segment’s top-line growth in the fiscal fourth quarter.
Alibaba’s strong cloud services portfolio, powered by advanced technologies like AI, Machine Learning and the Internet of Things, is expected to have aided it in addressing the rising demand for cloud architecture.
The company has been taking strong initiatives toward making its key cloud products serverless in order to prevent customers from worrying about managing servers and infrastructure during the process of product development and deployment. These initiatives are expected to have driven Alibaba’s customer momentum in the quarter under review.
Alibaba’s expanding footprint in the booming cloud market is expected to have been encouraging. The company’s cloud computing business has been gaining a lot of traction in China, as well as other international regions. Its strengthening global data center network is anticipated to have been beneficial in the to-be-reported quarter.
The company has been witnessing solid momentum across the Asia Pacific region for the past few quarters. The trend is expected to have persisted in the quarter under review.
Zacks Rank & Stocks to Consider
Currently, Alibaba carries a Zacks Rank #3 (Hold).
Investors interested in the broader technology sector can consider some better-ranked stocks like Ciena CIEN, DigitalOcean DOCN and AMETEK AME. Ciena, DigitalOcean and AMETEK each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Ciena have lost 14.9% in the year-to-date period. The long-term earnings growth rate for CIEN is projected at 15%.
Shares of DigitalOcean have risen 27% in the year-to-date period. The long-term earnings growth rate for DOCN is projected at 41.06%.
Shares of AMETEK have rallied 3.4% in the year-to-date period. The long-term earnings growth rate for AME is projected at 8.95%.
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