This puts into perspective the impending growth for Alibaba in the cloud business. Alibaba’s CEO Daniel Zhang believes that the world is in a “ nascent stage of the global cloud era.”
In terms of the cloud business trigger upside for BABA stock, the company expects the segment to be profitable in the current fiscal year.
7 Maturing Growth Stocks to Buy You Can Rely On. If I go back to 2018, the company’s CEO had opined that cloud computing will be the “ main business for Alibaba in the future.” The investment plan is a step in that direction. In April 2020, Alibaba announced that the company will be investing $28 billion in cloud business over the next three years. Second, the company is making big investments in the cloud business, which is likely to be another cash flow machine for the company. Source: Nopparat Khokthong / īABA stock has been steadily trending higher as the company stands to benefit from two factors.įirst, e-commerce growth for the company is likely to accelerate amidst the novel coronavirus pandemic. That’s one of the key architectural underpinnings.” In terms of differentiating factor, the company’s CEO Frank Slootman believes that “one of the key distinguishing architectural aspects of Snowflake is that once you’re on our platform, it’s extremely easy to exchange data with other Snowflake users. Clearly, the company’s high revenue growth trajectory is likely to sustain and this makes SNOW stock attractive. Furthermore, the cloud data platform market will expand in the coming years. The annualized revenue is therefore in the range of $500 to $600 million.Įven if the company gains 5% market share based on its estimate on the addressable market, the revenue potential is $4 billion. For the last quarter, the company reported revenue of $133 million, which implied a year-on-year growth of 121%. I believe that this pullback is a good opportunity to consider accumulating the stock.Īccording to the company, the addressable market for its cloud data platform is $81 billion in the current year. 
After trading at highs of $319, the stock has corrected to $238. SNOW stock got listed in a recent initial public offering.
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