HSBC Analysts Project Significant Improvement in Alibaba Cloud's Profitability

On May 14, HSBC analysts stated in a research report that Alibaba Cloud's profitability is expected to improve significantly over the next two quarters. According to Jin10, the analysts highlighted that the deployment of self-developed chips and a shift in business structure towards higher profit margins are anticipated to support the enhancement of Alibaba Cloud's profit margins. Based on this improvement, HSBC has raised its EBITA forecast for Alibaba's cloud business for the fiscal years 2027 to 2028 by 40% to 50%. The report also mentioned that this could increase market expectations for Alibaba Cloud's valuation. HSBC maintains a 'buy' rating for Alibaba and has raised its ADR target price from $172 to $180.