Jefferies has issued a research note indicating that the acceleration in cloud business growth for Alibaba-W (09988) is expected to continue. The firm maintains a "Buy" rating and has raised its Hong Kong-listed target price from HK$179 to HK$184. Concurrently, the US-listed target price for Alibaba (BABA) has been increased from $185 to $190.

The brokerage notes that Alibaba's first-quarter revenue for the period ending June 30 saw a 9% year-on-year increase, aligning with both market consensus and its own projections. Adjusted EBITA declined 30% year-on-year to RMB 27.3 billion, surpassing the market's expectation of RMB 25.6 billion and Jefferies' forecast of RMB 26.2 billion.

Management anticipates that cloud revenue will continue to experience accelerating growth over the coming quarters. For the next fiscal quarter, AI-related products are projected to achieve an annual recurring revenue (ARR) of nearly $10 billion, with an investment payback period of approximately three years. Through product mix optimization, the adoption of in-house developed T-Head chips, and diversified monetization strategies, this payback period could be shortened to 2.5 years.

Management also disclosed that T-Head's self-developed chips have achieved broad commercialization. The latest generation, the Zhenwu M890, has been adopted by over 650 external customers across more than 20 industries, including internet, autonomous driving, and financial services, via Alibaba Cloud services.