r/baba

Is Alibaba willing to be a lower-margin, higher-capex, higher-strategic-optionality business for the next 3-5 years?

The letter says yes. Explicitly. The framing of “growth mindset,” “investing patiently,” and “long-term thinking” is the polite Chinese-tech way of telling shareholders: don’t expect cash returns soon, we’re building.

This is the single biggest risk to your hold. Not cloud growth (that’s working). Not quick commerce (UE turning FY27). Not CMR (managed). The risk is that you are now holding a company that will look more like Amazon 2014-2018 — heavy investment, suppressed earnings, deferred cash returns — than a Chinese e-commerce cash cow. If your portfolio framework prefers near-term FCF and capital return, this letter is a yellow flag.

Claude summed it up pretty well.

I made the query last night before markets opened

I guess the rest of the market finally digested it the same way today

Market valuations are not reflecting the following investments in BABA portfolio.

1. Cambricon Technologies

2. CXMT ( Filing for IPO Next week) BABA has stake of 5%

3. YMTC

4. Horizon Robotics

5. Unitree Robotics

6)AgiBot

7. Dexmal

8. Minimax AI

9. Knowledge Atlas

JD YTD: +9%

Baidu YTD: -10%

Baba YTD: -10%

PDD YTD: -15%

NetEase YTD: -17%

Meituan YYD: -20%

KWEB YTD: -21%

Xiaomi YTD: -26%

Tencent YTD: -28%

Bilibili YTD: -30%

Trip.com YTD: -35%

I wonder how much Huawei and Bytedance would be up/down this year if they were traded publicly.

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https://preview.redd.it/sx65w6abj72h1.png?width=759&format=png&auto=webp&s=d51cf88e02824bd788148beacf1047fe61cb7473

New update

Usually there is an upcoming date (trump meeting xi, earnings call etc)

Seems like it’s just gonna do its thing with no real news anytime soon?

Analyst Bull Case with Qwen 3.6+ Breakout Bull case EOY targets $190–$240+ If Qwen becomes “China’s enterprise AI OS” • Strong adoption inside Alibaba ecosystem (Taobao, Cainiao, AIDC) • Developers build on Qwen API at scale

Cloud AI revenue inflection • AI becomes >50% of cloud revenue (already trending toward this)  • Cloud growth sustains ~40%+

Margin recovery starts late 2026 • AI capex stabilizes • quick commerce losses shrink • operating leverage kicks in

China's Al cloud market reached a total size of RMB56.7 billion in 2025, with laaS accounting for approximately 69% and MaaS about 31%, as market research firm Omdia released its "China Al Cloud Market Share 2025" report.

Among providers, Alibaba Cloud ranked first in both Al laas and Maas segments. Its total market share ascended from 35.8% in 1H25 to 38.1%, firmly maintaining the top position and toppling the combined share of the second- to fourth-ranked players.

Volcengine, Baidu Cloud, Tencent Cloud and eSurfing Cloud ranked second to fifth, respectively. The top five cloud vendors together accounted for more than 80% of the market.

Source: aastocks