Alibaba Group is set to release its third-quarter fiscal 2024 results on February 7. Last quarter, the company reported strong performance, beating analysts’ estimates. Despite the solid performance, Alibaba’s stock price has faced headwinds due to uncertainties around U.S. export restrictions and the cancellation of the Cloud Intelligence Group spin-off. Analysts at BofA and Morgan Stanley downgraded the stock and adjusted their price targets downwards. However, the company’s CEO remains optimistic about the future. Jack Ma, co-founder of Alibaba, recently reversed his decision to sell his stake in the company, instead buying up more shares, suggesting confidence in the business’s long-term prospects.
Barclays analyst Joyce Ju believes Alibaba scrapping its cloud IPO could be interpreted as a wise decision in the long term. While the company is currently faced with regulatory uncertainties and challenges related to accessing advanced chips, additional roadblocks to the planned Cloud Intelligence Group spin-off, and Jack Ma’s decision to sell $870M worth of shares, investors remain uncertain about Alibaba’s immediate growth prospects. Additionally, the broader Chinese economy’s current challenges, the slowdown in domestic consumer demand, and the company’s strategic reorganization are contributing to the concerns surrounding Alibaba’s future performance. Despite pressure from various analysts, the company could still benefit from potential bottoming out of the Chinese economy.
Alibaba’s Q3 results are eagerly anticipated by analysts, with the consensus calling for total revenue of $36.74B and earnings of $2.69 per share. Despite the headwinds it currently faces, Alibaba’s long-term outlook could be promising given the recent actions of its co-founder Jack Ma and the company’s strategic reorganization efforts. However, amid regulatory uncertainties in both the U.S. and China, it remains to be seen how the company will navigate these challenges and maintain its growth momentum in the long run.