MSALIBA@EC2611C

$Alibaba(BABA.US) is out of the water, and caramel popcorn is waving at me! Oh my god! It's Saturday.

Alibaba’s 9% revenue beat looks encouraging, but net income fell as heavy AI CAPEX weighs on profits. That’s a bet on future growth, not a problem yet—but returns still need to prove themselves. I’d hold if already invested, but stay on the sidelines rather than chase the stock now.

After earnings report, Futu was up 10% most of premarket, before giving up all gains upon market opening. Supports the hypothesis that American investors take Chinese ADRs very cautiously. not too different for Alibaba, I don't expect too much love from them.

Well as much as the narrative keeps pointing to yields and I agree yields are a sticky point and that is why the Feds are doing a ‘stealthy YCC’. (Look at what Bessent just added to what he said the day earlier. I mean he is hinting at YCC without saying it. Those who get the hint will plan accordingly. Those who are waiting for a clear cut announcement and definition will be behind the curve. Even crypto is hinting at something. Hint: They flourish with liquidity. And look at USD. It is devaluing in response. Price action precedes narratives.)

Again, I am just sharing my opinion. To the ‘textbookists’, let’s agree to disagree. Peace! 😊

Jackson hole is a key point but not sure what stuff Fed will say

Crypto was the buzz just when Trump took office and it took a bow and languished in the dark shadows for the most of the year. Now the president is back in action again to pump it up again such that funds have another avenue to rotate around, scything the retail FOMO hords.

AI infrastructure and semiconductor-related names such as SK Hynix, Micron and Lumentum continued to outperform, showing that investor demand for AI exposure remains strong despite concerns over higher capex and valuations.

Alibaba's results also highlighted this trend cloud and AI revenue surged, but profitability came under pressure as investment spending accelerated.

With Treasury yields rising again and Jackson Hole approaching, volatility could remain elevated in the near term

📌 Last session supposed many 👀 at the hottest hits for this month. I also got it though few months ago was searching what to invest. If the prices came tumbling downward, I will also consider to buy more, not worrying about the short term swings as the purpose of it is indeed worth more meaning than just AI Era as we will see how it could further transformed in the medical sciences too, another TGIF hope to close it steadily to mark a good week! It is Friday baby! 👏🏻🆙📈🆒🆕💊💫🌟🌟

Interesting that the news are not quite reporting the surge in the crypto markets and the crypto related stocks. Shall see if the rally can be sustained.

Daily market talk discussion is here!

Here are incremental takeaways from Alibaba's post-earnings small-group meeting. Highlights below.

1) Most importantly, cloud revenue growth is guided to re-accelerate to ~50% next quarter, with further acceleration thereafter. This alleviates concerns around ROI.

2) Losses at AI Lab should narrow. But they will likely remain around RMB 10bn per quarter.

3) ARR from AI-related revenue was RMB 49.5bn this quarter (quarterly revenue × 4). The Sep quarter ARR could exceed $10bn.

4) Excluding the impact of consolidating T-Head (Pingtouge), cloud margins would be higher, and the path to a 20% long-term OPM would be faster. This underscores improving profitability in core cloud.

5) On revenue sharing for open-source models, payouts to model developers are minimal. Aside from small splits on models like K3, revenue in most cases accrues 100% to Alibaba.

6) Management roughly expects FCF to turn positive by FY29. This implies better cash conversion ahead.

7) The Intl commerce business was profitable this quarter. This marks a notable milestone.

Other items broadly in line with prior expectations include the following. Details as follows.

1) The MaaS annualized revenue target remains RMB 30bn by year-end and could be achieved earlier. It is currently around RMB 16bn.

2) Unit economics (UE) in the flash-sales biz. will keep improving. Management maintains the expectation of achieving profitability by FY29.

3) E-commerce CMR and EBITDA growth will improve next quarter. No specific magnitude was provided.

Overall, the tone in the small-group session was more upbeat and explicit than in the main meeting. Core messages: cloud growth and margins should keep moving higher, while broader commerce growth and profitability should bottom and begin to improve, likely modestly.

Dolphin Research's expected combo of e-commerce stabilization plus an AI offensive was effectively confirmed by the company. That strengthens the bullish case.

Alibaba 1QF27 First Take. With management having guided recently, results were broadly in line with expectations, with no material surprises or disappointments.

Excluding expectations vs. reality, trends improved: retail broadly bottomed with profit repair helped by narrower losses in on-demand delivery. AI & Cloud surged, with both growth and margin moving higher, marking a potential inflection.

Details below. Highlights follow:

1) Alibaba revamped its disclosure again this quarter. Below is a brief on the new structure and changes:

a. International e-com, China e-com, and Hema were consolidated as the Alibaba Commerce segment. CMR is largely unchanged; first-party ops were folded into Cainiao's domestic supply-chain biz, and on-demand retail now covers Taobao Flash Sale, Hema, and Tmall Supermarket 1‑hour delivery. International e-com aligns with the prior International Retail with minimal changes, while Global Wholesale combines the former domestic and overseas wholesale businesses.

b. The AI Cloud & Compute segment merges Alibaba Cloud with the T‑Head chip unit that had sat in Other. As most of T‑Head's revenue already came from Cloud, the consolidation has little impact on revenue and currently minimal impact on profit.

c. The new AI Labs & Apps segment includes the model R&D team, the Qianwen consumer unit, and the Qianwen workplace unit, all previously in Other. The carve-out makes revenue and investment in models and applications more transparent.

d. The Other segment removed Cainiao's domestic supply-chain biz, Hema, T‑Head, and the AI Labs & Apps businesses. These units were moved out this quarter.

2) Total revenue was approx. RMB 269 bn (+8.6% YoY), aided by the lapping of Intime and Sun Art deconsolidation and strength in Cloud. Growth has re-accelerated and was broadly in line.

Overall Adj. EBITDA was RMB 27.3 bn, with the YoY decline narrowing sharply from 84% in the prior quarter to under 30%, slightly better than expected. The phase where heavy investment nearly consumed group profits has largely passed.

3) The core metric CMR fell 7.5% YoY, roughly in line with top-tier banks' -8% expectations. Ex-subsidies booked as contra-revenue, underlying comparable growth was about +1%.

Despite a notable sequential slowdown, social retail data had signaled this, and holding positive growth is still decent. The key question is how much growth can recover over the next few quarters.

4) Losses continued to narrow in Flash Sale, with market estimates putting the loss around RMB 10 bn, down roughly 40% QoQ. Profits in far-field e-commerce were broadly stable (or slightly lower).

Although international e-com was consolidated, it has been hovering around breakeven, so the impact on total profit should be limited. As a result, the new Commerce segment delivered profit of RMB 39.7 bn, with YoY decline narrowing to under 1%, effectively marking a bottom.

5) The standout was Cloud, with both revenue growth and margin moving higher. While definitions changed, the impact on reported figures was minimal and results tracked expectations.

Compute revenue grew 45% vs. 38% last quarter, showing clear acceleration. Margin moved into double digits at nearly 12%, slightly above the ~10–11% Street view, a modest positive surprise.

6) Similar to Tencent, Capex spiked to RMB 67.7 bn, 75% above the prior peak and far above the ~RMB 36 bn market estimate. Alibaba's Capex disclosure is cash-flow based and naturally includes prepayments, so it is still below Tencent's >RMB 100 bn on a full-basis view.

This points to a high likelihood of a further step-up in Alibaba Cloud growth ahead. The trade-off: with operating cash flow up ~11%, FCF sank deep underwater to about -RMB 45 bn, a notable squeeze.

7) The newly carved-out AI Labs & Apps segment posted revenue of approx. RMB 3.3 bn (+16% YoY), which indicates that by both scale and growth it remains far from 'success'. Segment loss was RMB 13.9 bn, broadly in line with expectations.

Excluding the RMB 3–4 bn Q1 subsidies for the Qianwen app, losses this quarter in AI models and apps were roughly flat QoQ. $Alibaba(BABA.US) $BABA-W(09988.HK)

Today is a big day for Alibaba shareholders. Its 1Q27 earnings will be announced after the HK market close. Are you confident in the results? Let’s pray for the best.

Beyond that, I have strong confidence in the People’s Bank of China’s policies. They have plenty of tools to boost the economy and the CCP will not let it falter.

For example their short-term liquidity tools have been kept unchanged for seven straight days. I see no risk in the upcoming easing of housing-fund withdrawal rules next month. I think CCP will have a larger economic budget coming soon. This is the way how China flex its muscles to US 😛

During Fed chair Warsh's press conference after the Jul meeting, he repeated pointed to the elevated bond yields as a market driven tightening and hence Fed could fold their hands for the moment. However, Treasury secretary Bessent just served the tennis ball back when he announced yesterday that bond buy backs would be minimally doubled. Is Mr Bessent triggering the "test the new Fed chair" rite of passage?

177% soar… this sounds like a recipe for pullback… dyodd well