Since Amazon.com Inc (NASDAQ:AMZN) started reporting AWS as a segment of its business, AMZN stock has soared 200%. Many believe AWS has single handily added $100 billion in valuation to Amazon stock. Over the next few years, Alibaba Group Holding Ltd (NYSE:BABA) has the same opportunity for BABA stock appreciation.
Currently, Alibaba’s Cloud Computing business is losing money, but margins are getting better, and the growth is nothing shy of incredible.
As seen, Alibaba Group Holding Ltd (NYSE:BABA) has quickly grown its cloud computing paying customer base. When compared to the likes of Amazon Web Services, Microsoft’s Azure, or Google Compute, Alibaba is right there in terms of paying customers, and is doing so in a much larger region that is just now starting to embrace infrastructure-as-a-service, platform-as-a-service, and software-as-a-service.
There is no question that Alibaba Group Holding Ltd (NYSE:BABA) is a name that Chinese consumers and businesses are familiar with, and trust. As a result, the potential for accelerated and continued cloud computing customer and revenue growth is unquestionably significant over the next 3-5 years.
With $314 million in fiscal fourth quarter revenue during Alibaba’s last period, Alibaba Group Holding Ltd (NYSE:BABA) reported a record high and a continuation of double-digit quarter-to-quarter growth since its IPO.
While $314 million represents a rather insignificant comparison to Alibaba’s total revenue ($5.6 billion last quarter), its weight is very similar to AWS vs Amazon.com’s revenue back when the company started reporting in 2015. We all see how that’s turned out for AMZN stock.
Continue to page 2 for two charts that better illustrate why the next two years could be quite incredible for Alibaba stock owners, driven by Cloud Computing.