Alibaba is clearly choosing growth over near-term profits. A 75% jump in capital expenditure, largely directed toward AI infrastructure, looks painful today, but the 45% growth in cloud revenue suggests the investment is beginning to generate real demand.
The bigger issue is whether this spending can eventually create operating leverage. A roughly 75% decline in reported net profit shows that Alibaba’s margin structure is still under serious pressure.
I would not treat Alibaba as simply a “cheap AI stock.” It is a bet on whether AI and cloud can become the next profit engine. If AI monetization accelerates, today’s margin compression could prove temporary. If growth slows, however, investors may discover that the margin floor is lower than expected.
For me, Alibaba is a long-term platform transformation story, but the next catalyst must be monetization, not more spending.
@Marktomarket [暗中观察]
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