Mixed quarter for Alibaba

By: Miguel A. Rodriguez

15:49, 06 November 2020

Alibaba's revenue falls below the estimates. Its cloud computing services growth outpaces that of Amazon and Microsoft

The Chinese e-commerce giant – Alibaba reported its earnings for the fiscal second quarter. The results were mixed.

Alibaba's EPS came in at $1.54, topping the expectations by $0.06. However, the revenue came in $510 million short at $22.8 billion.

In the quarter, Alibaba reported that its monthly active users reached 881 million. At a Chinese level, it has 757 million users, 15 million more than it had at the same time last year.

But the EPS and the number of users are not the only segments that reported promising figures. Alibaba's cloud segment brought a revenue that not only topped expectations, but its growth pace outperformed Amazon and Microsoft. For the quarter ended in September, cloud computing revenue came in at $2.24 billion, marking a 60% rise from the same time last year.

 In the same period, Amazon's Web Service surged 29%, while Microsoft Azure's grew 48%. The numbers are more surprising, considering that Alibaba's cloud services are significantly smaller than Amazon and Microsoft.

Despite the results, this week wasn't so good for Alibaba. Its stock price fell roughly 8% after Ant Group announced that it is postponing its IPO. Moreover, after the report, the company's share price inched down 3%.

Read here about Ant Group's decision to halt the IPO!

Sources: tipranks.com, cnbc.com

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This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided.