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Will Cloud Strength Benefit Alibaba's (BABA) Q4 Earnings?

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Alibaba Group Holding Limited’s (BABA - Free Report) fourth-quarter fiscal 2021 results, slated to release on May 13, 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 50% from the prior-year period to RMB 16.1 billion ($2.5 billion), accounting for 7.3% of the total revenues.

The Zacks Consensus Estimate for fiscal fourth-quarter cloud computing segment revenues is pegged at $2.8 billion, indicating growth of 64.4% from the year-ago reported figure.

Click here to know how the company’s overall fiscal fourth-quarter results are expected to be.

Alibaba Group Holding Limited Price and EPS Surprise

 

Alibaba Group Holding Limited Price and EPS Surprise

Alibaba Group Holding Limited price-eps-surprise | Alibaba Group Holding Limited Quote

Factors to Note

Alibaba’s expanding footprint in the booming cloud market is expected to have been encouraging.

Moreover, the company’s cloud computing business has been gaining a lot of traction in China as well as in international regions. Its strengthening global data center network is anticipated to have been beneficial in the to-be-reported quarter.

Additionally, 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.

Further, increasing spending from enterprise customers, driven by the company’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.

Furthermore, Alibaba’s strong cloud services portfolio, powered by advanced technologies like AI, Machine Learning and Internet of Things, is expected to have aided it in addressing the rising demand for cloud architecture.

Also, the growing momentum across the company’s cloud computer, which is its first device that enables users to utilize unlimited computing resources anytime and anywhere, is expected to have captured customer attention.

Additionally, Alibaba’s Cloud Lakehouse— an advanced big data architecture — is expected to have contributed well.

Further, the impacts of the Hybrid Cloud Partner Program of the company, which has been gaining strong traction, are expected to get reflected in the upcoming results.

However,rising competition from big market players is anticipated to have been a major concern in the to-be-reported quarter. Growth of Alibaba Cloud has been hindered by the strengthening efforts of Amazon’s (AMZN - Free Report) AWS, Microsoft’s (MSFT - Free Report) Azure and Alphabet’s (GOOGL - Free Report) Google Cloud.

Currently, Alibaba carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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