Alibaba Group Holding Limited BABA

The business

Alibaba runs two engines that used to share a P&L story and now have separated. Taobao and Tmall Group is the toll booth on 900M+ Chinese consumers and still contributes the majority of adjusted EBITA in normal quarters; merchants pay commission and ad take-rate for access to the largest consumer attention pool in China, and the moat is the 23-year accumulated logistics, payment, and trust infrastructure. Alibaba Cloud is the second engine, now the largest Chinese public cloud, the country's most-used foundation model (Qwen at 300M MAU and 35.8% AI cloud share), and as of today a custom training-and-inference chip (Zhenwu) with 560,000+ units already shipped to 400+ enterprise customers across 20 industries. Cainiao logistics, AIDC international commerce (AliExpress, Lazada, Trendyol), and the Ant Group 33% stake round out the corporate structure.

The engine: domestic commerce (Taobao Tmall Group plus China's domestic e-commerce ancillaries) generated roughly 60% of FY26 revenue and the overwhelming majority of EBITA when not absorbing the Taobao Instant Commerce delivery losses that distorted Q4 FY26. Cloud is 20% of revenue and growing 38% YoY at the segment-EBITA level, small enough to be ignored by the multiple, large enough to re-rate the equity if the trajectory holds.