Morningstar released a research report stating that Alibaba-W's (09988) adjusted EBITA for the second quarter ending September this year fell nearly 78% quarter-on-quarter. Management indicated that revenue growth in its cloud intelligence business would shift from "accelerated" to "high-speed" in the coming quarters, while customer management revenue growth in the third fiscal quarter is expected to slow year-on-year. The fair value for its Hong Kong-listed shares is projected at HK$251 per share, while its US-listed counterpart (BABA.US) has a fair value estimate of $258 per share.

The report attributed Alibaba's weaker-than-expected adjusted EBITA to expanded losses in on-demand retail and increased investments in foundational models and AI applications. Morningstar lowered its adjusted EBITA forecasts for Alibaba by 5%–7% for fiscal years 2026–2028 but maintained its mid-cycle earnings projections largely unchanged. The slowdown in Alibaba Cloud's growth guidance was attributed to supply constraints, quarterly volatility in internal AI cloud usage, and a high base effect.

Additionally, Morningstar kept its revenue and above-guidance capital expenditure expectations for Alibaba Cloud unchanged. The customer management revenue guidance aligned with expectations. The firm emphasized that Alibaba's business maintains a wide economic moat, with the market continuing to underestimate management's strong execution capabilities and the cloud business's potential, leaving its valuation still undervalued.