Alibaba's $7 Billion Power Play: Can Coupons and Cloud Save Its Future?

Yahoo

02-07-2025

Alibaba (NYSE:BABA) is pulling a bold move to reignite growth in its core markets. The company just announced it will hand out 50 billion yuanroughly $6.98 billionin coupons and vouchers over the next 12 months to boost traffic and spending across its delivery and shopping platforms. It's a high-stakes play aimed at defending its position in China's fiercely competitive e-commerce and food delivery sectors, where rivals like JD.com have recently stepped in. The subsidy push signals that Alibaba is not backing down, even as it juggles rising pressure at home.
Warning! GuruFocus has detected 2 Warning Signs with BABA.
At the same time, Alibaba is turning its gaze outward. The company is doubling down on global cloud expansion, rolling out new data centers in Malaysia and the Philippines, and opening an AI hub in Singapore designed to support more than 5,000 businesses and 100,000 developers. CEO Eddie Wu called globalization a core pillar of Alibaba Cloud's long-term strategy and said the firm will continue building its cloud network across Asia, the Middle East, Europe, and the Americas. These moves come as the company looks to tap surging demand for AI and cloud services in Southeast Asiawhile reinforcing its position in an increasingly crowded tech race.
Investors are paying close attention to whether this two-front strategy can move the needle. Alibaba Cloud is widely seen as a future growth engine, with the group previously committing $52 billion toward AI and cloud infrastructure over the next three years. But with price wars heating up in domestic commerce and aggressive bets abroad, execution will be key. Whether this $7 billion stimulus can defend Alibaba's turfand whether its cloud ambitions can delivercould define the company's next chapter.
This article first appeared on GuruFocus.