Alibaba Group Holding Ltd (NYSE:BABA) announced that it will invest an additional US$1 billion to fuel further growth at Aliyun, its cloud computing arm, a testament to cloud computing as an important growth area for Alibaba. The additional funding will be used to expand Aliyun’s international presence, extend and support an alliance-based global cloud computing ecosystem, and for the development of new cloud and big data solutions that enable customers to increase productivity, lower costs and scale quickly as their businesses grow.
“Aliyun has become a world-class cloud computing service platform that is the market leader in China, bearing the fruits of our investment over the past six years. As the physical and digital are becoming increasingly integrated, Aliyun will serve as an essential engine in this new economy,” said Daniel Zhang, CEO of Alibaba Group. “This additional US$1 billion investment is just the beginning; our hope is for Aliyun to continually empower customers and partners with new capabilities, and help companies upgrade their basic infrastructure. We want to enable businesses to connect directly with consumers and drive productivity using data. Ultimately, our goal is to help businesses successfully transition from an era of information technology to data technology.”
Aliyun is focused on bringing the benefits of user-friendly, cost-efficient and secure cloud computing to businesses around the world. Part of the additional US$1 billion investment will contribute to further international expansion for Aliyun as part of this globalization strategy. Aliyun currently provides public cloud computing services in five data centers in China and in Hong Kong, and earlier this year launched its first overseas data center in Silicon Valley. Part of this new investment will be used to set up a global network of Aliyun cloud computing centers in the Middle East, Singapore, Japan and Europe.
The additional funding also underpins Aliyun’s vision of a comprehensive cloud ecosystem that ensures businesses can be powered by cloud computing, with peace of mind, from day one of their operations. One initiative is the international Marketplace Alliance Program, which is designed to provide global users with one-stop cloud services and contribute to the worldwide development of cloud computing. The first wave of alliance partners – Intel, Singtel, Dubai-based Meraas, Equinix, PCCW, LINKBYNET, and Hong Kong-based Towngas – cover North America, Asia, Europe, and the Middle East.
Strategic Collaboration with Yonyou Software Co. Ltd
Aliyun and Yonyou Software Co. Ltd (Yonyou), the largest software vendor in China and the largest enterprise independent software vendor in the Asia Pacific region, also announced a strategic collaboration today that will expand business opportunities for both parties and help forward-thinking businesses in the fields of cloud computing, big data, digital marketing and e-commerce. Aliyun will also assist Yonyou on its journey to the cloud and big data.
Through this partnership Aliyun can further tap into the enterprise market and deliver a more comprehensive set of services to meet business needs, addressing domestic and international enterprise challenges more quickly. The cooperation will also allow Yonyou to leverage on the extensive resources that Alibaba Group has in place around the world to further grow its enterprise software business.
“Cloud computing will become fundamental infrastructure for new economic development. Aliyun, together with Yonyou, will bring comprehensive cloud computing solutions to empower more enterprises, drive the development of supply chains, enable cloud consumer marketing, and bring disruptive transformation to the industry,” said Simon Hu, President, Aliyun. (Original Source)
Shares of Alibaba Group closed yesterday at $80.56. BABA has a 1-year high of $120 and a 1-year low of $79.25. The stock’s 50-day moving average is $83.38 and its 200-day moving average is $86.50.
On the ratings front, Alibaba Group has been the subject of a number of recent research reports. In a report issued on July 10, RBC analyst Mark Mahaney reiterated a Buy rating on BABA, with a price target of $105, which represents a potential upside of 30.3% from where the stock is currently trading. Separately, on July 8, Credit Suisse’s Dick Wei maintained a Buy rating on the stock and has a price target of $114.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mark Mahaney and Dick Wei have a total average return of 23.6% and 21.7% respectively. Mahaney has a success rate of 66.2% and is ranked #9 out of 3718 analysts, while Wei has a success rate of 38.5% and is ranked #604.
The street is mostly Bullish on BABA stock. Out of 20 analysts who cover the stock, 20 suggest a Buy rating . The 12-month average price target assigned to the stock is $105.23, which implies an upside of 30.6% from current levels.