Alibaba posts big earnings beating estimates of the market

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The shares of the American depositary shares of Alibaba Group Holding Ltd were up by a slight margin in the trading on Friday after the e-commerce giant from China had reported huge earnings beat which had surpassed the expectations across all of its segments of revenue.

The company has highlighted the growth in two major segments during the earnings call for the second quarter. The management has viewed the retail business in China as being positioned well taking into account that the sales are increasing in the retail sector faster than the gross domestic product overall.

Alibaba has also seen a major opportunity in the cloud business and has sited estimates that the IT spending for the internet companies is $80 billion and more than $300 billion if the public sector and more industries are taken into the account.

The cloud services being adopted in China is going to be driven not just by the need of the lower costs in IT but also by the business models and their processes undergoing digital transformation according to Daniel Zhang who is the Chief Executive.

The revenue of core commerce overall has climbed by 40% in this quarter to reach an amount of $14.4 billion while the revenue of cloud computing has increased to RMB 9.3 billion which is an increase of 64%.

On Friday Afternoon, the shares had traded up by 0.3 % although in the sessions earlier in the day, it had been trading as high as 3.1 %.

Hari Srinivasan who is an analyst at Alibaba calls these numbers very encouraging and says that the engagement numbers were the highlight of the report which according to him was a positive sign.

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