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Will Cloud Strength Benefit Alibaba's (BABA) Q4 Earnings?

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Alibaba Group Holding Limited’s BABA fourth-quarter fiscal 2022 results, slated to release on May 26, are expected to reflect the impacts of the strengthening cloud computing segment.

Moreover, the segment has turned out to be one of the key contributors to the company’s overall top-line growth. In the last reported quarter, revenues from the cloud computing segment increased 20% from the prior-year period to RMB 19.54 billion ($3.1 billion), accounting for 8% of the total revenues.

The Zacks Consensus Estimate for fiscal fourth-quarter cloud computing segment revenues is pegged at $3.13 billion, indicating growth of 22.5% from the year-ago reported figure.

Click here to know how the company’s overall fiscal fourth-quarter results are expected to be.

Alibaba Group Holding Limited Price and EPS Surprise

 

Alibaba Group Holding Limited Price and EPS Surprise
Alibaba Group Holding Limited Price and EPS Surprise

Alibaba Group Holding Limited price-eps-surprise | Alibaba Group Holding Limited Quote

Factors to Note

Alibaba’s expanding footprint in the booming cloud market is expected to have been encouraging.

The company’s cloud computing business has been gaining a lot of traction in China, as well as international regions. Its strengthening global data center network is anticipated to have been beneficial in the to-be-reported quarter.

The company has been witnessing solid momentum across the Asia Pacific region for the past few quarters. The trend is expected to have persisted in the quarter under review.

Increasing spending from enterprise customers, driven by the company’s continued efforts to add features to its cloud offerings, is likely to have driven the segment’s top-line growth in the fiscal fourth quarter.

Alibaba’s strong cloud services portfolio, powered by advanced technologies like AI, Machine Learning and the Internet of Things, is expected to have aided it in addressing the rising demand for cloud architecture.

The growing momentum across the company’s cloud computer, which enables users to utilize unlimited computing resources anytime and anywhere, is expected to have captured customer attention.

The impacts of the Hybrid Cloud Partner Program of the company, which has been gaining strong traction, are expected to get reflected in the upcoming results.

Zacks Rank & Stocks to Consider

Currently, Alibaba carries a Zacks Rank #3 (Hold).

Investors interested in the broader technology sector can consider some better-ranked stocks like Avnet AVT, Monolithic Power Systems MPWR and MaxLinear MXL. While Avnet and Monolithic Power Systems sport a Zacks Rank #1 (Strong Buy), MaxLinear carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avnet has gained 4.5% in the past year. The long-term earnings growth rate for AVT is currently projected at 37.2%.

Monolithic Power Systems has gained 28.4% in the past year. The long-term earnings growth rate for MPWR is currently projected at 25%.

MaxLinear has rallied 7.5% in the past year. The long-term earnings growth rate for MXL is currently projected at 20%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Avnet, Inc. (AVT) : Free Stock Analysis Report
 
Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report
 
MaxLinear, Inc (MXL) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
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