Alibaba Cloud Forecasts 45% Revenue Growth as AI Fuels Demand

Alibaba’s fiscal 2027 first‑quarter outlook projects cloud revenue to rise about 45%, adding roughly 120 billion RMB in subsidy income and beating market expectations. The surge is driven by AI‑powered services such as MaaS, AI‑native solutions and AI compute offerings, which the company says will help its cloud and AI commercial revenue exceed $100 billion in the next five years. CEO Wu Yongming highlighted the role of AI across e‑commerce, government services and internal tools, noting that AI‑generated content and image creation are dramatically increasing token consumption on Alibaba Cloud.

The forecast also notes a turnaround in Alibaba’s e‑commerce segment: flash‑sale subsidies are being cut sharply, market share remains stable and overall retail profit is recovering. Combined with a stronger cash position and a share‑repurchase program, the outlook positions Alibaba as a leading beneficiary of the shift from hardware‑focused to software‑and‑cloud‑driven growth in China’s internet sector.