BABA FY3Q26 Results: AI Investments to Weigh Down Margins for FY27
What’s new: Alibaba’s reported FY3Q26 results that were below consensus and our expectations. External cloud and AI revs could grow at least 40% CAGR over the next five years as demand for AI remains resilient. However, investments in AI including marketing spending related to Qwen App could continue to weigh down margins heading into FY27. We lower our PT from US$200 to US$170 on lowered margin outlook. Our updated PT of US$170 implies 21.8x FY27E P/E. We maintain our BUY rating.Analysts:
Jin Yoon
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