Alibaba Launches Enhanced Cloud Computing Services

Alibaba Launches Enhanced Cloud Computing Services

 

China’s eCommerce giant Alibaba Group Holding Limited (NYSE: BABA) announced a range of expansion plans yesterday. Specifically, the plan focuses on advertising sector and cloud infrastructure services. Considering the long-term growth prospects, we are expecting the stock of Alibaba, which closed at $184.75 on Wednesday, to move up in the near future.

Hangzhou, China-based Alibaba has unveiled EMEA Ecosystem Partner Program to update its range of offering in the EMEA region. The update will enable Alibaba to provide a range of advanced cloud services powered by its state-of-the-art technology. The offering is expected to strengthen the relationship between Alibaba Cloud customers and local partners in respective regions. The company will also be able to deliver business efficiency to its clients by supporting them in adoption of digital transformation. The latest range of products is also expected to improve customer experience on Alibaba’s cloud platform. This in turn is expected to attract more customers to the cloud platform and increase the top line of the company.  

The program has already attracted big enterprises such as Intel, Hashicorp, Accenture, Ecritel, Micropole, Altran and Linkbynet. Alibaba recently announced a partnership with a France-based transportation company, named Bollore Group. Under the partnership agreement, Alibaba’s cloud computing arm Cainiao Smart Logistics Network, and Blue Solution – logistics business of Bollore – will work together on multiple projects across Europe and Asia.

In other news, Alibaba has launched an artificial intelligence (AI) tool, which can prepare 20,000 lines of advertisement material per second. The product was unveiled by the company’s digital marketing unit Alimama. The AI tool uses a combination of deep learning models and natural language processing mechanisms to prepare content. The tool has passed the Turing test, which validates a computer’s ability to mimic human behaviour. However, Alibaba has stated that the program will not replace humans.

Instead of spending a lot on developing advertising material, companies will be able to link their products with eCommerce sites such as Tmall, Mei.com, Taobao, 1688.com and use the ‘smart copy’ button to automatically prepare advertisements. Advertising is expected to become the largest revenue earner for Alibaba. Recent forecasts indicate that the company is set to garner 40% of the total mobile advertisement revenue of more than $20 billion in China. The company already maintains a database of shopping habits of over 600 million monthly active users. Therefore, advertisers will be glad to use the service. Therefore, the launch of enhanced cloud services and AI-based advertising tool is expected to turn the stock bullish.

Technically, the stock of Alibaba is trading near its major support at 184. The RSI indicator is near the oversold region. Therefore, we are expecting a bullish reversal in the stock price.

Alibaba - Technical Analysis - 5th July 2018

Instead of buying the stock, we wish to invest in a call option, which is valid for a period of one week. In order to proceed further with our trading plan, we prefer the stock of Alibaba to trade at $185.

Disclaimer: The trading analysis offered here is our opinion. It is not provided as trading advice, merely an indication of our trading plan. We cannot guarantee success and we encourage traders to incorporate a strong money management strategy to limit losses. Please use this article as part of your own research before formulating strategies prior to trading.


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