KEY TAKEAWAYS
- U.S.-listed shares of Alibaba Group are falling 3% in premarket trading Monday after the Chinese tech giant announced plans to invest more than $52 billion in artificial intelligence and cloud infrastructure over the next three years.
- Jefferies said Alibaba Cloud “is a key player and outpaces peers in terms of capex spend.”
- Alibaba shares have gained almost 90% in the past 12 months through Friday.
U.S.-listed shares of Alibaba Group (BABA) are falling 3% in premarket trading Monday after the Chinese tech giant announced plans to invest more than $52 billion in artificial intelligence and cloud infrastructure over the next three years.
In a post on its news site, the company said over the next three years it would spend at least 380 billion yuan ($52.4 billion)—an amount that would exceed the company’s AI and cloud computing investment over the past decade. Alibaba said the investment “underscores the company’s focus on AI-driven growth and its role as a leading global cloud provider.”
Alibaba CEO Eddie Wu had announced plans last week to “aggressively invest” in cloud and AI spending over the next three years but didn’t give a specific amount.
Jefferies Says Alibaba Cloud ‘Outpaces Peers’ in Capex Spend
Jefferies analysts, who have a “buy” rating and $160 price target on Alibaba stock, noted that the investment “aligns with the earnings call last week and in line with street expectations.” They said Alibaba Cloud “is a key player and outpaces peers in terms of capex spend, helping to foster sector development in the pursuit of AGI, intelligence enhancement and open strategy.”
Alibaba shares soared to a three-year high after the firm reported better-than-estimated quarterly results Thursday. They are up almost 90% to $143.75 over the past 12 months entering Monday trading.
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