00:00Let's talk about that. That changed the price target and your overall reaction to the numbers.
00:03What drove it essentially? Yeah, I think we're at the very interesting times when if you compare
00:08this year versus last year, the sentiment has been shifting that last year investors were very
00:13much chasing the momentum of AI, trying to gauge the new stories driven by this AI boom. But of
00:19course, this year is almost that reality check when the earnings are kicking in, people start
00:23to realize, OK, we need to really evaluate the investment returns and ROICs on all of those
00:29cash deployed. So I would say yesterday was almost kind of a demonstration of seeing that
00:34this conflicting market sentiment that people were trying to balance out this pretty sluggish
00:39core earnings as well as for their still pretty strong cloud momentum. For our side, we did
00:45the target price because of to reflect the more aggressive investments on the e-commerce
00:51and those foundation model front. But we still do believe Baba is probably the best one to
00:56be positioned into this AI front, especially with their pretty unique full stack capabilities
01:01on the AI infrastructure. Eventually, if you look at the AI investment wave, right, what's
01:06being more tangible is really the CapEx that the hardware side that's really seeing really,
01:12really strong pricing power that you are seeing all of those rising tokens, the usage all bringing
01:18into much higher need for compute. So we do think Baba is really unique on that front.
01:24I mean, it's a high bar then, really, for their AI endeavors, given the weakness that we're seeing
01:30when it comes to the e-commerce space. They're talking about quintupling. I mean, I haven't seen
01:35that in an earnings report in a while. Quintupling cloud and AI revenue to $100 billion annually
01:41in five years. That's about, what, 30-some percent growth a year? Do you think that's actually
01:47feasible? Is it reasonable? How will they get there?
01:49Yeah, so they're basically implying roughly 40% in category in the next four or five years,
01:54right, on the AI cloud revenue and mostly for external revenue. I would say at the current
02:00juncture, it seems to be a very ambitious target. But just judging on the current token consumption,
02:06especially with the fact that now more and more developers, even casual users, are using these
02:11agentic tools and products to try out and really experiment into their live and work experiences,
02:17businesses, it does seem like the token surge will just continue. So we're actually seeing
02:21that accelerated usage of AI could be further boosting the cloud usage. So I'd say for the
02:26near term, it does seem like the cloud revenue will be climbing on this upward revenue momentum.
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