Alibaba is expected to report revenue of $7.28 billion in its earnings report Thursday, which implies a 56-percent year-over-year growth, the analyst noted. This figure is ahead of the consensus estimate of $7.14 billion and is based on encouraging data from the National Bureau of Statistics of China, which showed an acceleration in online sales during the calendar second quarter to 41 percent year over year from 37 percent in the first quarter. Also, Alibaba's cloud revenue should show continued momentum and should grow by 95 percent year over year.
During Alibaba's conference call investors should pay close attention to:
- The company's offline retail strategy.
- Investments in the cloud as it is still one to two years away from an inflection point.
- Investment in the digital media space.
Beyond Thursday's earnings report Alibaba could benefit from ongoing improvements in mobile monetization and a "healthy" macro environment.
"Alibaba remains one of our top selections in our coverage group," Devitt wrote. "Alibaba continues to execute well in driving growth in the core commerce as well as invest in areas such as cloud services, video content, and multi-channel to support long term growth."
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