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<Research>CLSA: CN Support for Data Center Construction Leads to BABA-W Share Pullback; Mgmt Determined to Gain More AI Mkt Shrs
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China is reportedly planning to invest RMB2 trillion over the next five years to build data centers, with support from CHINA MOBILE (00941.HK) and CHINA TELECOM (00728.HK), CLSA said in a research report. The broker believed this is the reason behind the recent pullback in BABA-W (09988.HK)'s share price. The broker noted that this development may raise market concerns about computing power becoming commoditized. However, it believed BABA-W's competitive edge lies in Model-as-a-Service (MaaS) and application-level offerings, rather than merely Infrastructure-as-a-Service (IaaS), which are areas where CHINA MOBILE and CHINA TELECOM are unlikely to compete. In response to some investors questioning whether BABA-W's management culture remains competitive in the AI era, the broker said large enterprises often face more challenging organizational structures and cultural issues when dabbling into new arenas, but they also possess strong capital and resource advantages. BABA-W's senior management has demonstrated determination to capture greater AI market share. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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