Alibaba sees revenue hit by caution in cloud space

Date:
Fri, 16 Aug 2024 10:04:01 +0000

Description:
News follows previous results from this quarter suggesting that cloud dominance is still very much a three-horse race.

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Following recent healthy cloud sector results from AWS, Google, and Microsoft , enter some tempered expectations as Alibaba Cloud has reportedly missed its own targets.

Per CNBC , the Chinese cloud storage provider continues to face local
pressure from a rise in competition and an increasingly cautious local consumer base.

Though the companys overall net income has dropped 29% year-on-year (YoY), maybe dont feel too bad for them, as its overall US shares still saw a 2%
rise in value, and it still made $3.4 billion in net income. Alibabas tumultuous cloud growth

CNBC quoted a company spokesperson as claiming the somewhat dramatic fall in income was driven by an increase in impairment across its investments .

However, it shouldnt be forgotten that Alibaba is currently caught in a pivot out of the Australian and Indian regional cloud markets . Time will only tell if Alibaba will be able to ride out this period of revenue shrinkage and was in fact right to retain in-house control of its cloud business and scrap a specific IPO listing for it, a decision that was up in the air as late as mid-November 2023.

For Alibabas Cloud Intelligence Group, quarterly revenue currently sits at having risen 6% YoY, a decrease of 3% compared to last November. Management sees artificial intelligence (AI) as a core driver of growth for that part of the business, with a spokesperson claiming that the companys AI-related product revenue continued to grow at triple-digits year-over-year.

Despite drops in revenue across the board and decreases in growth for cloud, Alibaba has somehow calculated its EBITA, a measure of profit calculating earnings before interest, taxes and amortization, as having risen 155% YoY. More from TechRadar Pro Alibaba Cloud is slashing prices in China to help
fuel AI push Alibaba unveils the network and datacenter design it uses for large language model training Alibaba now has a ChatGPT rival for its cloud customers to use



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Link to news story: https://www.techradar.com/pro/alibaba-sees-revenue-hit-by-caution-in-cloud-spa ce


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