Alibaba's Cloud Intelligence: Growth Driver and Undervalued Asset
$Alibaba(BABA)$ $BABA-W(09988)$ 's Cloud Intelligence business is the driving force of its growth. After going through several years of regulatory scrutiny, the company now has a clear path towards expanding in this market expected to triple to $293B by 2027. It's why they're investing heavily today.
EBITDA margins hit an all-time-high of 9% in 2QFY25, up from 5.1% a year ago, and up from 2.1% two years ago. These margins are almost similar to $Amazon.com(AMZN)$ 's AWS, which is now being valued at $2.5 to $3.0 trillion.
Alibaba Cloud isn't generating anywhere near the revenue of AWS. But not too far either - about 1/6th AWS 2023 revenues on a TTM basis. Kind of gives you an idea just how undervalued and underappreciated this side of Alibaba's business is today.
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