VALUATION HIGHLIGHTS
- Taobao and Tmall Group constitutes 30% of the Trefis price estimate for Alibaba Group's stock.
- Other Business constitute 17% of the Trefis price estimate for Alibaba Group's stock.
- Cloud Computing constitutes 12% of the Trefis price estimate for Alibaba Group's stock.
WHAT HAS CHANGED?
- Latest Earnings
Alibaba posted a better-than-expected set of Q2 results, with revenue rising 5% to RMB 247.8 billion ($34.8 billion).
Robust AI demand accelerated revenue for the Cloud Intelligence business, with sales up 34% compared to last year. AI-related product revenue grew by triple-digits year-over-year.
Note: Alibaba's Q2 FY'26 ended on September 30. FY'25 ended on March 31, 2025.
- Alibaba's cross-border business
Alibaba’s cross-border e-commerce platforms, including AliExpress, have emerged as significant growth drivers. This surge is likely attributed to robust performance from initiatives like the AliExpress Choice program, which offers free shipping and additional benefits. However, the U.S. tariffs on low-value Chinese imports put in place in May 2025 could put a lid on growth going forward.
BUSINESS SUMMARY
Alibaba is a Chinese technology company focusing on e-commerce, logistics, cloud computing, digital media, and other subscription software. While the company reports its business in four segments, we have reworked its structure into five segments that better capture Alibaba's business based on its operations. The China Commerce segment revenues are derived from retail e-commerce and associated marketing services in China. Digital Media & Innovation Initiatives segment revenues are derived from content subscription, software subscription, and merchant advertising offerings. China Wholesale & Other revenues are derived from wholesale commerce and logistics services, primarily driven by Chinese consumption. International Commerce segment revenues are derived from retail and wholesale operations and advertising services outside China. Cloud Computing segment revenues are derived based on customers' duration and usage of Alibaba's service.
