Fitch Affirms Alibaba at 'A', Stable Outlook on AI Cloud Growth

MT Newswires Live10-15 11:06

Fitch Ratings has affirmed Alibaba's (HKG: 9988) long-term issuer default ratings at 'A' with a stable outlook, citing its strong position in China's e-commerce and cloud markets and rising AI demand.

The agency expects Alibaba's AI cloud and compute services revenue to grow at an annual rate of about 30% over five years.

Heavy AI infrastructure investment is expected to keep free cash flow negative in the financial years ending March 2027 and March 2028, before recovering to neutral or positive levels from March 2029.

Fitch expects Alibaba's e-commerce EBITA margin to recover to about 22% by March 2029, from 13% in March 2026, as quick-commerce subsidy spending eases.

The ratings remain constrained by China's sovereign rating.

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