Weibo's Advertising Revenue Declines, Yet AI Initiatives Maintain User Engagement
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
Quarterly Performance: Weibo Corp. reported a fiscal third-quarter revenue of $442.30 million, a 5% decline year-on-year, but exceeded analyst expectations of $435.75 million. Adjusted EPS of 42 cents fell short of the consensus estimate of 43 cents.
Advertising Revenue Decline: Advertising and marketing revenues decreased by 6% year-on-year to $375.4 million, impacted by the previous year's boost from the Paris Olympic Games, while excluding Alibaba's contributions, the decline was 13%.
User Engagement Metrics: Monthly active users (MAUs) were reported at 578 million, down from 587 million year-on-year, while daily active users (DAUs) remained stable at 257 million.
Strategic Developments: CEO Gaofei Wang highlighted advancements in Weibo's intelligent search strategy and AI adoption in advertising technology, aimed at enhancing content consumption and monetization efficiency.
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Analyst Views on BABA
Wall Street analysts forecast BABA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BABA is 203.66 USD with a low forecast of 172.00 USD and a high forecast of 230.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
13 Buy
1 Hold
0 Sell
Strong Buy
Current: 175.660
Low
172.00
Averages
203.66
High
230.00
Current: 175.660
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.
Cainiao Merges with Zelos to Form New Robovan Business
- New Business Formation: Alibaba's logistics arm, Cainiao, is merging its autonomous driving unit with China's Zelos Technology to create a new robovan business valued at approximately $2 billion, which is expected to enhance Cainiao's competitive position in the smart logistics sector.
- Equity Structure Adjustment: Post-merger, Alibaba will gain an equity stake in Zelos Technology, while Cainiao Robovan will continue to operate as an independent brand, a structure that will help strengthen synergies in technology and market resources between the two entities.
- Management Changes: The merged entity will be managed by Zelos, with a Cainiao executive joining Zelos's board, a personnel arrangement that will facilitate closer collaboration in strategic decision-making between the two companies.
- Formal Announcement Expected: A formal deal announcement is anticipated by Thursday, which will provide the market with more information regarding the merger details and could potentially impact Alibaba's stock performance.
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Alibaba Launches Self-Developed AI Chip Amid U.S. Export Controls
- Chip Launch: Alibaba's semiconductor design unit T-Head has unveiled the Zhenwu 810E chip, a fully in-house designed application-specific integrated circuit aimed at high data throughput for generative AI, delivering performance comparable to Nvidia's H20, marking a significant advancement in the company's AI infrastructure efforts.
- Increased Market Competition: Amid U.S. export controls limiting China's access to advanced semiconductors, Alibaba is intensifying its investment in AI infrastructure to reduce reliance on Nvidia, which previously controlled about 95% of China's advanced AI chip market, highlighting the strategic shift in the competitive landscape.
- Cloud Service Expansion: The Zhenwu 810E chip is already operational in multiple 10,000-card clusters within Alibaba Cloud and is being utilized by large external customers, which not only enhances Alibaba Cloud's service capabilities but also potentially strengthens its competitive position in the cloud computing market.
- IPO Plans Emerging: Founded in 2018, T-Head focuses on the design of computing and storage chips, and with increasing market demand, Alibaba's chip unit may consider an IPO, further advancing its strategic positioning in the semiconductor sector.
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