Goldman Sachs: Alibaba-W (09988) Expected to Improve Profit in the Second Half, Maintains "Buy" Rating

Goldman Sachs released a research report stating that the stock price of BABA-W (09988) has fallen by 22% since the beginning of the year, mainly due to the drag on profit forecasts caused by increased investment in consumer AI. It is expected that the downward cycle of Alibaba's earnings per share is bottoming out, and profit performance is expected to improve in the second half of this year, which will provide support for the stock price. Goldman Sachs maintains a "buy" rating with a target price of 180 Hong Kong dollars. The bank is optimistic about Alibaba's leading position in AI+cloud business, and expects cloud revenue growth to accelerate further. The contribution of AI-related products to external cloud revenue is expected to reach 50% within a year. Goldman Sachs believes that Alibaba's valuation has not fully reflected its full-stack AI positioning and the potential of international cloud business. Customer management revenue (CMR) may be affected by a slowdown in retail sales in the second quarter, but losses from other businesses are expected to gradually narrow, helping profits stabilize.