Time for Cloud ETFs on Earnings Strength & Promising Growth?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 17 2024
0mins
Should l Buy BABA?
Source: NASDAQ.COM
- Cloud Computing Market Growth: The global cloud computing market is projected to grow from $626.4 billion in 2023 to $1.27 trillion by 2028 at a CAGR of 15.1%, driven by remote work and e-commerce demands.
- Key Players in Cloud Computing: Microsoft, Google Cloud, and Amazon Web Services dominate the global cloud infrastructure market, collectively accounting for 67% of the $76 billion market in Q1 of 2024.
- Financial Performance of Cloud Leaders: Microsoft's Intelligent Cloud business generated $26.7 billion, AWS had revenues of over $25 billion, and Google Cloud reported sales of $9.6 billion in Q1 of 2024.
- Market Share and Growth Forecasts: AWS leads with a 31% market share, followed by Microsoft (25%) and Google (11%). Global end-user spending on public cloud services is expected to reach $678.8 billion in 2024.
- ETFs and Investment Opportunities: ETFs like Wisdomtree Cloud Computing Fund, Global X Cloud Computing ETF, and others have seen gains amid the cloud computing boom, offering investment opportunities in the sector.
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Analyst Views on BABA
Wall Street analysts forecast BABA stock price to rise
14 Analyst Rating
13 Buy
1 Hold
0 Sell
Strong Buy
Current: 164.320
Low
172.00
Averages
203.66
High
230.00
Current: 164.320
Low
172.00
Averages
203.66
High
230.00
About BABA
Alibaba Group Holding Ltd is an investment holding company mainly engaged in the provision of technology infrastructure and marketing platforms. The Company operates its business through nine segments. The China Commerce Retail segment is engaged in the China commerce retail business. The China Commerce Wholesale segment is mainly engaged in the operation of 1688.com. The Cloud Intelligence segment provides cloud services. The International Commerce Retail segment provides customer management services, sales of goods and logistics services. The International Commerce Wholesale segment is mainly engaged in the operation of Alibaba.com. The Cainiao Represents Logistics Services segment provides fulfilment services. The Local Services segment’s revenue includes platform commissions, logistics services revenue. The Digital Media and Entertainment segment engages in the operation of Youku and Alibaba. The All Others segment is mainly engaged in the Sun Art, Freshippo and other business.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Logistics Network Advantage: By integrating Alibaba's logistics network, Zelos has optimized supply chain management and significantly improved product delivery efficiency, which enhances customer satisfaction and market responsiveness.
- Industry Trend Awareness: Amidst a general industry focus on profitability, Zelos's strategic choice highlights its emphasis on technological innovation, potentially providing the company with a long-term competitive advantage.
- Market Outlook: Zelos's initiatives not only enhance its technological capabilities but may also attract greater investor attention, further driving the company's market expansion and business growth.
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- Surge in Orders: During the Lunar New Year, Alibaba's Qwen platform processed over 120 million orders in just six days, indicating a strong consumer acceptance of AI-driven shopping, particularly from counties and rural areas where nearly half of the orders originated, highlighting significant market potential.
- Growth in Senior Users: Approximately 1.56 million individuals aged 60 and above made their first online purchases through Qwen, reflecting Alibaba's success in attracting new users, especially among the elderly demographic, thereby expanding its user base significantly.
- Incentive Measures Drive Engagement: Alibaba's Lunar New Year promotional campaign, launched on February 6, aims to distribute 3 billion yuan (approximately $431 million) in incentives through Qwen, designed to enhance user engagement and strengthen market competitiveness, particularly in the AI application sector.
- Behavioral Shift Indicator: Alibaba noted that the campaign triggered a shift in consumer behavior towards AI-powered shopping, with QuestMobile reporting significant increases in daily active users for major AI apps, signaling a potential inflection point for AI commerce that could reshape future consumer habits.
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- Spin-Off Plan: Alibaba is planning to spin off its T-Head unit for a separate listing, aiming to capitalize on the high market valuations of AI chip makers, which could generate additional capital inflow and enhance overall market competitiveness.
- Valuation Analysis: While listed Chinese AI chip companies trade at triple-digit P/S ratios, Nvidia, which is profitable, has a P/S ratio of only 24, highlighting a stark contrast between the enthusiasm for AI in China and the rationality seen in Western markets.
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- New Model Launch: ByteDance has introduced the Seedream 5.0 generative AI image model, aiming to compete with Google's Nano Banana image editor at a lower price, claiming enhancements in reasoning capabilities and accuracy, which strengthens its competitive edge in the market.
- Beta Testing Phase: The Seedream 5.0 is currently in beta testing on ByteDance's Jimeng and CapCut platforms, expected to attract more users and increase ByteDance's market share in the generative AI sector.
- Alibaba's New Product: Alibaba has launched the Qwen-Image-2.0 model, featuring a lightweight architecture for faster generation, claiming superior performance in rendering Chinese characters compared to Google's Nano Banana Pro, further solidifying its position in the AI market.
- Open Source AI Model: Alibaba's RynnBrain model is designed to enhance robotics and task automation, capable of understanding spatial relationships and completing complex tasks, and is available to developers on platforms like Hugging Face and GitHub, showcasing its strong appeal in the open-source AI domain.
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