Alibaba Group anticipates increased cloud growth and rising penetration rates of marketing tool QZT. Morningstar raises 2025 cloud revenue growth forecast to 30%, driven by demand from various industries. Forecast for high-margin CMR growth also increases to 10% for fiscal 2026. Alibaba’s fair value estimate is boosted by 17% to USD 179 per ADS.

Alibaba’s QZT penetration rate is at 30% after one year and four months of deployment, with room to grow. Adjusted EBITA forecasts are lifted by 4%-30% over the next decade, reflecting stronger contribution from CMR and cloud revenue. Alibaba International Digital Commerce aims to become profitable.

IDC report shows Alibaba holding a 24.6% market share in China’s AI public cloud services in 2024, with the market growing by 55% that year. Alibaba’s AI cloud potential and management’s competitiveness are undervalued. Adjusted EBITA at AIDC improved, reducing loss margin to negative 0.2% in the June quarter.

Read more at Morningstar: AI and Customer Management Revenue Growth Drive 17% Valuation Increase