BOCI International: Market experts forecast that Alibaba-W (09988) cloud revenue will grow by more than 33% this year.

Bank of China International released a research report stating that a China cloud computing industry expert conference was held on February 3rd. The main topics discussed included the market size and growth prospects of the domestic cloud market in 2026, judgment on the global competitive landscape of domestic cloud manufacturers, progress of AI integration, and the cloud business and capital expenditure outlook for BABA-W (09988) in 2026. Experts estimated that the market size of the domestic cloud computing industry will grow by 20-30% year-on-year to 450-500 billion RMB in 2026, with AI cloud contributing the largest increment (the AI cloud market size is expected to double to 100 billion RMB in 2026). Experts believe that Alibaba will be able to capture 80% of the AI cloud market increment in 2026 due to its full-stack AI capabilities and coverage advantages of existing customers. Experts estimated that Alibaba's cloud revenue in 2026 will grow by over 33% year-on-year to around 200 billion RMB, with the revenue growth of external cloud and overseas cloud surpassing that of internal cloud and domestic cloud. The long-term profitability of cloud business will increase due to the rise in revenue from high-priced AI cloud services (especially AIPaaS) and improved sales due to fragmentation. In terms of capital expenditures, experts predict that Alibaba will invest 160-180 billion RMB in 2026, with 70% of the budget allocated to the purchase of AI servers, including AI chip procurement.