Daiwa has released a research report reiterating its "Buy" rating on Alibaba-W (09988) and maintaining a target price of HK$180. After attending the Yunqi Conference 2026, the firm's confidence in the company's cloud revenue prospects has been further strengthened, though more aggressive cloud infrastructure plans bring financing uncertainty.

Alibaba remains the firm's top pick in the sector, benefiting from a solid cloud business outlook and a clear monetization trajectory for China's internet AI.

The firm noted that AI infrastructure remains a long-term investment priority for Alibaba. The company reaffirmed its commitment to continued investment in AI models, chips, and cloud infrastructure, with plans to expand future Qwen models to 5 trillion to 10 trillion parameters, and to expand the global data center capacity operated by Alibaba Cloud to more than 20 gigawatts by 2032.

The company also unveiled its next-generation AI chip Zhenwu V900, which delivers 3 times the performance of the M890, with plans to launch it in the first quarter of 2027, followed by the J900 targeted for the third quarter of 2028.

The firm estimates that cumulative capital expenditure from 2025 to 2032 could reach approximately RMB 2.1 trillion, supporting cloud revenue of approximately RMB 1.1 trillion by fiscal year 2033.

Due to recent equity financing dilution, the firm has lowered its earnings per share forecasts for Alibaba for fiscal years 2027 to 2029 by approximately 4%.