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Alibaba Group Holding Limited (BABA) is increasing its investments in AI infrastructure through Alibaba Cloud, which generated RMB 30.1 billion ($4.15 billion) in revenues in Q4 of fiscal 2025, marking an 18% year-over-year increase. The Cloud Intelligence Group accounted for approximately 12.7% of total revenues. Alibaba plans to invest RMB 380 billion ($52.7 billion) over three years to bolster its global cloud capabilities, including the opening of a third data center in Malaysia on July 1 and plans for a facility in the Philippines by October 2025.
These expansions are part of a broader strategy to enhance Alibaba Cloud’s infrastructure, which will comprise 90 availability zones across 29 regions, in response to increasing demand for AI and cloud services in Southeast Asia. Simultaneously, Alibaba faces competition from Amazon (AMZN), which is also expanding its AI-ready data centers significantly, and Microsoft (MSFT), which recently opened a data center region in Austria and is expanding its network in Taiwan.
Year-to-date, Alibaba’s shares have increased by 22.5%, outperforming other sectors in the market. The company’s forward 12-month Price/Earnings ratio stands at 9.76X, significantly lower than the industry average of 24.59X, positioning Alibaba as an attractive investment based on valuation metrics.
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