Alibaba (NYSE:BABA) is in the news Wednesday after revealing a positive outlook for its cloud business during an investor day livestream.
During the event, BABA CFO Maggie Wu said that she expects the company’s cloud unit to post a profit during its fiscal 2021 year. That’s welcome news to Alibaba investors as the company’s cloud business hasn’t been profitable yet.
It’s also worth noting that the Alibaba cloud outlook is great news for other reasons. BABA has been focusing on its cloud business of late. It wants it to become its main business in the future. To aid with that, it’s investing 200 billion yuan into its cloud infrastructure over the next three years, reports Reuters.
Alibaba’s efforts to grow its cloud business are clear. The company’s most recent earnings report saw revenue from the unit increase by 58.5% to 12.35 billion yuan. BABA chairman and CEO Daniel Zhang says the focus on the cloud will continue. He also notes its “the kind of opportunity that comes only once in a generation.”
Alibaba is already making great strides in the cloud market. It’s the number one cloud company in its homeland of China and has a presence on the global stage as well. Currently, the only companies ahead of it are Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL,GOOG), thanks to Google’s business, CNBC notes.
BABA stock was up 5.4% as of Wednesday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.