Open Source Securities: Maintain Alibaba-W "Buy" Rating, AI Saturation Investment Drives Industry Development
KaiYuan Securities maintains a "Buy" rating on Alibaba-W, believing that its active investment in AI infrastructure will drive cloud business growth. It is expected that the adjusted net profits for FY2026-2028 will be 140.5 billion, 162.9 billion, and 189.8 billion yuan, with growth rates of -11.2%, +16.0%, and +16.5%, respectively. Alibaba CEO Eddie Wu pointed out at the Cloud Summit that future AI computing will be centered around GPUs, and the industry's demand for AI infrastructure exceeds expectations, with plans for additional investments
According to Zhitong Finance's APP, Kaiyuan Securities released a research report stating that Alibaba-W (09988) is actively investing in AI infrastructure construction and plans to increase further investments, which is expected to drive accelerated growth in its cloud business. Taotian is temporarily increasing its investment in flash sales, but user traffic growth is significant, and the contribution of e-commerce technology service fees is increasing revenue. The firm maintains its adjusted net profit forecasts for FY2026-2028 at 140.5 billion, 162.9 billion, and 189.8 billion yuan, corresponding to year-on-year growth rates of -11.2%, +16.0%, and +16.5%, with diluted EPS of 7.6, 9.1, and 10.9 yuan. The current stock price corresponds to PE ratios of 19.1, 16.1, and 13.4 times. The company is actively investing in flash sales to capture instant retail market share and is fully laying out AI-driven value reassessment, maintaining a "Buy" rating.
Key Points from Kaiyuan Securities:
AI infrastructure demand exceeds expectations, saturation investment drives industry development
On September 24, Alibaba's 2025 Cloud Summit opened in Hangzhou, where Alibaba CEO Eric Wu delivered a keynote speech mentioning:
(1) In the significant transformation from AGI to ASI, large models will be the next generation of operating systems. In the future, almost all tools and interfaces linking to the real world will connect with large models. LLM will be the core intermediary layer for interacting and scheduling users, software, agents, and computing resources.
(2) Super AI cloud will be the next generation of computers, transitioning from CPU-centric computing to GPU-centric AI computing driven by large models. The new AI computing paradigm requires denser computing power, more efficient networks, and larger cluster scales. In the future, there may only be 5 to 6 super cloud computing platforms worldwide.
(3) Alibaba Cloud operates China's number one and globally leading AI infrastructure and cloud computing network, being one of the few AI cloud computing platforms capable of vertical integration of software and hardware. The industry's demand for AI infrastructure far exceeds expectations, actively promoting the construction of 380 billion yuan in AI infrastructure and planning to make even larger investments. Compared to 2022, the long-term plan for Alibaba Cloud's global data center energy consumption scale will increase tenfold by 2032.
Investment Recommendations
Comprehensively layout AI-driven value reassessment, with Taotian's monetization rate continuously improving. Focus on increasing investment in AI and cloud computing infrastructure construction around the core AI strategy to enhance the efficiency of flash sales. The growth rate of cloud business is expected to continue accelerating; in the short term, Taotian's increased investment in flash sales is expected to sustain growth in order volume and drive traffic growth on the main site. The advantages of high-end users, merchants, and fulfillment systems on Taobao are expected to be reused in instant retail and in-store businesses.
Risk Warning: Intensified industry competition, macroeconomic performance below expectations, organizational adjustments not meeting expectations, regulatory changes
