New York, July 13, 2026, 11:07 EDT
Alibaba Group (NYSE:BABA; HKG:9988) was up 0.9% at $113.33 in late morning New York trade Monday, keeping gains going after its Hong Kong shares jumped 15.6% over four sessions. That stood out with the Nasdaq down 0.8% as U.S.-Iran jitters hit and chip stocks slumped. Alibaba’s Hong Kong shares ended 0.45% higher at HK$110.70, after hitting HK$115.10 earlier.
The main issue now is if cloud computing can expand fast enough to make up for another profit drop in Alibaba’s commerce business. BofA Securities sees June-quarter revenue up 8.8%, and cloud sales speeding up to 45% growth from 38% last quarter. The unit’s margin could move to 11% from 9%. The firm kept its Buy rating. It still targets HK$168 and $172 for the two Alibaba listings.
BofA’s forecast leans heavier on cloud than the group’s headline growth number shows. Based on last year’s group revenue of RMB247.65 billion with cloud at RMB33.40 billion, BofA’s estimates point to total revenue around RMB269.44 billion and cloud sales at RMB48.43 billion.
| Measure | June 2025 reported | June 2026 implied | Change |
|---|---|---|---|
| Group revenue | RMB247.65 billion | RMB269.44 billion | up 8.8% |
| Cloud revenue | RMB33.40 billion | RMB48.43 billion | jumped 45.0% |
| Cloud share of group sales | 13.5% | 18.0% | up 4.5 points |
The bridge stands out. Cloud is set to deliver around RMB15 billion of Alibaba’s RMB21.8 billion jump in quarterly revenue — that’s 69% of total sales growth for the group. Just applying the forecast 11% margin to cloud gets about RMB5.3 billion, but that’s only 20% of BofA’s RMB26.2 billion estimate for group adjusted EBITA. Adjusted EBITA is operating profit before interest, tax and amortisation, with some items left out.
Chinese internet stocks listed in the U.S. traded mixed on Monday, with no clear move among names tied to AI.
| Company | Price at about 10:52 a.m. EDT | Monday move |
|---|---|---|
| Alibaba Group NYSE:BABA | $113.33 | up 0.9% |
| JD.com NASDAQ:JD | $28.99 | gained 2.8% |
| Baidu NASDAQ:BIDU | $115.31 | fell 1.9% |
JD gained while Baidu slipped, showing investors split exposure to China commerce and AI instead of just buying last week’s winners. Alibaba surged 11% to $108.98 Wednesday and Baidu was up almost 5%. Monday saw a smaller gain for Alibaba, with most of that advance holding up even as U.S. tech indexes slipped.
Alibaba’s management has kept the trade-off front and center. CEO Eddie Wu in May said tech investments “are beginning to pay off commercially,” but said margin is “still secondary” as the group focuses on growth and share. The company next said it expected better cloud margins in the next one or two quarters. BofA’s 11% estimate now shows an early look at that. Reuters
Chairman Joe Tsai called the spending a response to capacity limits, not weak demand. “In the China context, we’re very underinvested in infrastructure and in the AI supply chain,” he said in June. Alibaba has put forward plans for more than $53 billion in AI and cloud infrastructure spending over three years, saying it is supported by $25 billion in annual free cash flow from its main commerce business — money left after running and capital costs. Alibaba Group
BofA’s model also sketches out the risks. The bank sees customer management revenue, which covers advertising and merchant service fees, falling 7.7%. Group adjusted EBITA could be down 33% to RMB26.2 billion. It forecasts about RMB10 billion in new-retail losses and another RMB17 billion in other business losses. If cloud underperforms, margin gains slip, or spending on quick commerce — rapid delivery within an hour — drags on, investors are still stuck with high infrastructure costs. The commerce profit pool remains under pressure.
Alibaba’s June-quarter numbers are a test on two fronts. Investors want proof that AI demand is starting to push up cloud revenue, not just costs, and also need to see losses in other businesses coming down fast enough to keep paying for those bets. The AI story fueled the jump. How much sticks depends on the rest.
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