I would wait rather than chase the insider buy. The more important signal has already arrived in the numbers: Alibaba’s cloud and AI-services revenue grew 45%, but quarterly net profit fell 75% as capex surged 75% to RMB67.68bn.
That actually strengthens both sides of the debate. Bulls can point to genuine cloud reacceleration, while bears can argue that Alibaba is effectively buying that growth at a very high near-term cost. The HK$80bn placement adds dilution and raises the hurdle further. Alibaba now needs to demonstrate that AI infrastructure produces attractive incremental returns, not merely faster revenue. Management is targeting roughly a mid-teens return on AI investment over three years.
So I would treat the CEO purchase as a confidence signal, not a buy signal. The metrics I would watch are cloud growth, cloud margins, free cash flow and whether capex growth begins moderating.
Verdict: wait for more evidence. If cloud can sustain roughly 40%+ growth while profitability improves, AI spending starts looking like an entry ticket rather than a margin trap. If capex stays elevated while FCF deteriorates, Burry’s argument becomes considerably stronger.
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