Morgan Stanley notes that AliCloud announced a new round of price cuts by 20% on average across 100-plus products via its official website, adding that AliCloud’s move “could trigger a new round of industry wide price cuts and a worsening competition landscape amongst public cloud vendors.” For Alibaba particularly, the firm believes the move aligns with its broader strategy to champion AI development in China and stimulate corporate demand and the firm currently forecasts FY25 cloud revenue to grow 10% year-over-year with non-GAAP EBITA margin of 8%. Morgan Stanley has an Equal Weight rating and $85 price target on Alibaba shares.
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