Haitong International expects Alibaba's revenue for the last quarter to increase by 2.3% year-on-year, while lowering its earnings forecast

Haitong International published a research report stating that Alibaba (BABA.US) reported total revenue of RMB 289.3 billion for the third fiscal quarter, an increase of 2.3% year-on-year. Among this, Customer Management Revenue (CMR) increased by 4.4% year-on-year, revenue from Alibaba International Digital Commerce Group (AIDC) rose by 18.5% year-on-year to RMB 44.7 billion, cloud business revenue increased by 38% year-on-year to RMB 43.8 billion, and other revenue grew by 25% year-on-year to RMB 66.4 billion.

The firm indicated that due to weak consumer trends in November and December last year, merchants' advertising budgets and discretionary spending were under pressure, which may lead to moderate growth in Customer Management Revenue. Driven by the accelerated growth of artificial intelligence workloads and increased token consumption, cloud business will remain the main growth engine for this quarter.

The firm raised its revenue forecasts for the group for the third fiscal quarter and fiscal year 2026 to RMB 289 billion and RMB 1,034 billion, respectively; it also lowered its net profit forecast for the third fiscal quarter to RMB 29 billion and for the full year to RMB 93.6 billion.

The firm maintains its target price at $203, with a rating of "Outperform."