Good morning. QQQs - 20bps; yields ticking down; BTC +1%; China +1.7% helped by BABA’s great print. Let’s get straight to it….Earnings first - BABA CVNA W U KVYO - then onto News/Research…
BABA +11%: Looks really good with CMR + Cloud acceleration and EBITDA beat
CMR big beat and accelerated to 9% from 2% last quarter (expects closer to ~5%) driven by GMV and take rate improvement and benefiting from full quarter contribution of 0.6% fee and adoption of Quanzhantui ad tool.
Cloud revs accelerated to 13% vs 12% with AI triple digit growth and guiding for further acceleration
TTG and Cloud EBITDA beat
Capex increased to RMB31.8B vs 17.5BRMB last q - watch GDS VNET, Chinese datacenters both + 20% pre market. This capex # is a MASSIVE beat vs. expectations.
So far call going well with positive commentary on AI investment. Saying next 3 years investment set to exceed what they have spent over last decade in cloud infra.
Key quotes from the release:
This reminds us of that first big NVDA print following Chat GPT — obviously very different companies, but the similarities are where we are in the lifecycle of sentiment/narrative. Not only did cloud/AI beat, but CMR also big beat (gravy on top). This big beat and guide for accel will add fuel to the burgeoning AI China narrative that is playing quick catch up.
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