JPMorgan noted in a research report that BABA-W (09988.HK) +2.600 (+2.116%) Short selling $1.33B; Ratio 13.415% will announce its 1Q26 results. Given prospects of AI infrastructure development in China, its share price has undergone a sharp re-rating, with cloud revenue growth serving as the key financial support. The market generally expected CMR to grow by 4-9% this quarter, external revenue from the cloud business to hike about 40%, and losses in "other businesses" to reach RMB10-15 billion. E-commerce remains the primary profit contributor, and investors broadly believed that "stability" in results would be acceptable.The broker expected the share price to underperform initially due to the CMR figure and believed future quarterly results may redefine the market’s key observation metrics. If the company discloses comparable-basis CMR in its earnings report and investors focus on the EBITA trend, the downside should be limited. A more persistent risk lies in potential overinvestment in Qianwen. If management can credibly frame Lunar New Year spending as a “one-off” and guide for sharply lower spending in coming quarters, this quarter could become a “clearing event” - with consolidated earnings bottoming out and improving thereafter. Related News Citi Raises ALIBABA-W (09988.HK) TP to HKD204, Rating BuyOtherwise, the market may begin pricing in an “open-ended consumer AI investment cycle”. Coupled with food delivery headwinds, there will be valuation compression in e-commerce. The broker leaned toward the former scenario but has limited confidence in the outlook for Qianwen. Regarding e-commerce fundamentals, the broker was more confident, noting that flat EBITA may not by itself drive a re-rating, but the direction is positive and should see further improvement in the coming quarters as the competitive base eases.JPMorgan maintained an Overweight rating on BABA-W and reduced its TP from HKD200 to HKD195.(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-04-10 16:25.)Related NewsHSBC Research Initiates Coverage on Zhipu (02513.HK) and MiniMax (00100.HK) with Hold; Sees Further Revenue Upside for TENCENT (00700.HK) and ALIBABA (09988.HK)
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