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Alibaba Group Holding Limited (BABA - Free Report) has been making efforts to further expand cloud presence beyond the e-commerce sphere.
The China-based e-commerce giant stated that it will invest 200 billion yuan ($28 billion) in cloud infrastructure over the next three years. The amount invested will be used to develop technologies related to operating systems, servers, chips and networks.
The investment is in line with the company’s strategy of expanding geographic reach and customer base, as well as strengthening the product portfolio. In addition, the investment would help it compete against rivals in the growing cloud market.
Alibaba’s Cloud Investment Relevant at the Present Time
In the current scenario, wherein the coronavirus pandemic is going from bad to worse, people have to maintain social distancing and work remotely. Therefore, most of the companies need to move bulk portion of their workloads to the cloud. On top of that, consumers have started to shop online due to the lockdown. Thus, any consumer-oriented business needs to have a digital presence built on the cloud in order to survive.
Resultantly, cloud computing is emerging as a key technology to fight the battle against coronavirus. This technology is seeing higher usage globally as it allows data interoperability in a scalable, cost-efficient way by data collection, processing, analyzing and sharing across platforms.
Hence, Alibaba’s decision to invest such a huge amount in cloud services at this point of time makes complete sense.
Alibaba Poised for Further Growth in 2020
Alibaba’s cloud computing revenues have been surging over the past few years. Cloud computing has now become one of Alibaba’s fastest-growing initiatives beyond the traditional e-commerce sphere.
In fiscal third-quarter 2020, the company’s cloud computing business segment reported revenues of RMB10.7 billion (US$1.54 billion), up 62% from the year-ago period. The increase was driven by higher revenue contribution from both public cloud and hybrid cloud businesses.
Alibaba, together with the cloud business unit, is making all efforts to cater to the requirements of today’s world.
With the help of AI-led technologies, Alibaba’s cloud unit is providing data on coronavirus and its diagnosis.Applications developed by cloud experts and researchers from its subsidiary, DAMO Academy, are expected to provide the necessary support to medical professionals across the globe in combating the spread of the virus.
Moreover, it has been making all efforts to provide medical workers across the world with advanced cloud-based apps to help battle the coronavirus outbreak.
Therefore, these steps taken by the company highlight the growing importance of the cloud business, which is likely to boost revenues in 2020.
Given the growing position of Alibaba’s cloud business in China and aggressive international expansion strategies, we believe that cloud computing will be one of the major growth drivers in the long run.
Long-term earnings growth for Stamps.com, Fiverr International and Wayfair is currently projected at 15%, 11.6% and 23.04%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Alibaba (BABA) Boosts Cloud Investment Amid Coronavirus Woes
Alibaba Group Holding Limited (BABA - Free Report) has been making efforts to further expand cloud presence beyond the e-commerce sphere.
The China-based e-commerce giant stated that it will invest 200 billion yuan ($28 billion) in cloud infrastructure over the next three years. The amount invested will be used to develop technologies related to operating systems, servers, chips and networks.
The investment is in line with the company’s strategy of expanding geographic reach and customer base, as well as strengthening the product portfolio. In addition, the investment would help it compete against rivals in the growing cloud market.
Alibaba Group Holding Limited Price and Consensus
Alibaba Group Holding Limited price-consensus-chart | Alibaba Group Holding Limited Quote
Alibaba’s Cloud Investment Relevant at the Present Time
In the current scenario, wherein the coronavirus pandemic is going from bad to worse, people have to maintain social distancing and work remotely. Therefore, most of the companies need to move bulk portion of their workloads to the cloud. On top of that, consumers have started to shop online due to the lockdown. Thus, any consumer-oriented business needs to have a digital presence built on the cloud in order to survive.
Resultantly, cloud computing is emerging as a key technology to fight the battle against coronavirus. This technology is seeing higher usage globally as it allows data interoperability in a scalable, cost-efficient way by data collection, processing, analyzing and sharing across platforms.
Hence, Alibaba’s decision to invest such a huge amount in cloud services at this point of time makes complete sense.
Alibaba Poised for Further Growth in 2020
Alibaba’s cloud computing revenues have been surging over the past few years. Cloud computing has now become one of Alibaba’s fastest-growing initiatives beyond the traditional e-commerce sphere.
In fiscal third-quarter 2020, the company’s cloud computing business segment reported revenues of RMB10.7 billion (US$1.54 billion), up 62% from the year-ago period. The increase was driven by higher revenue contribution from both public cloud and hybrid cloud businesses.
Alibaba, together with the cloud business unit, is making all efforts to cater to the requirements of today’s world.
With the help of AI-led technologies, Alibaba’s cloud unit is providing data on coronavirus and its diagnosis.Applications developed by cloud experts and researchers from its subsidiary, DAMO Academy, are expected to provide the necessary support to medical professionals across the globe in combating the spread of the virus.
Moreover, it has been making all efforts to provide medical workers across the world with advanced cloud-based apps to help battle the coronavirus outbreak.
Therefore, these steps taken by the company highlight the growing importance of the cloud business, which is likely to boost revenues in 2020.
Given the growing position of Alibaba’s cloud business in China and aggressive international expansion strategies, we believe that cloud computing will be one of the major growth drivers in the long run.
Zacks Rank and Key Picks
Currently, Alibaba carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Stamps.com Inc. , Fiverr International Lt. (FVRR - Free Report) and Wayfair Inc. (W - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Stamps.com, Fiverr International and Wayfair is currently projected at 15%, 11.6% and 23.04%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>