Alibaba Is Pouring $1 Billion Into Cloud Computing.
The Move Is Critical for Its Growth.
Alibaba will invest $1 billion into its cloud computing division, doubling down on a high-growth area of its business as the Chinese tech giant emerges from a painful slowdown in its core area of e-commerce.
The $1 billion investment will be spread across three years and focus on incentivizing Alibaba (ticker: BABA) customers to upgrade their digital infrastructure. The investment consists of both financial and non-financial incentives, the company said, such as funding, rebates, and go-to-market initiatives, in addition to enhanced customer services.
The news has done little to boost Alibaba stock. U.S.-listed shares in the company fell 1.1% Thursday and were down a further 1.5% in Friday’s premarket session. The stock has plunged by more than two-thirds since early 2021 amid intense regulatory pressures from both Chinese and U.S. authorities that have slammed China’s tech sector. While risks remain, many analysts continue to view the stock favorably and see it as undervalued at current levels.