Alibaba's Cloud Ambitions and CoreWeave's AI Leap: What's at Stake This Earnings Season?

As Alibaba prepares to report its fiscal fourth-quarter results on May 15, and CoreWeave Inc. releases its first-quarter earnings the day before, the tech sector’s focus turns to two pivotal players in the AI and cloud infrastructure race. Alibaba’s stock has surged 45% year-to-date, fueled by its AI advancements and cloud dominance, while CoreWeave—backed by OpenAI—aims to prove its growth story amid a $11.9 billion contract. The coming days will test whether these companies can sustain momentum in a market crowded with giants like Microsoft and Amazon.

Alibaba’s AI-Driven Play for Market Share

Alibaba’s earnings will underscore its transition from an e-commerce giant to a leader in AI and cloud computing. Analysts project a 6.4% year-on-year revenue rise to RMB236.1 billion ($32.9 billion), with net income expected to jump 68.7% to RMB134.5 billion, reflecting cost discipline and strong demand for its Cloud Intelligence Group. The segment, which grew 16% YoY in the previous quarter, is the linchpin of Alibaba’s AI strategy.

The star of this shift is Qwen, its AI model family. Alibaba’s partnership with Apple to integrate Qwen into iPhones in China has sparked optimism, while its Qwen 2.5-Max model—ranked among the top in global benchmarks—has drawn over 90,000 derivative models from global developers. CEO Eddie Wu has emphasized that AI adoption is driving cloud demand, with revenue from AI-related products growing over 100% YoY in Q3.

Yet challenges loom. U.S. tariffs on imports under $800 threaten its e-commerce arm, while China’s economic deflation risks consumer spending. Meanwhile, regulatory scrutiny over data security and fintech remains a wildcard. Analysts, however, remain bullish: 16 of 43 rate Alibaba’s ADR as “strong buy,” with an average price target of $160.54, implying a 30% upside from current levels.

CoreWeave’s High-Stakes IPO and OpenAI Bet

CoreWeave, set to report on May 14, faces a stark contrast. Despite a $1.92 billion revenue surge in 2024—up from $848 million in 2023—its net loss widened to $863.4 million, fueled by aggressive expansion. The company’s $11.9 billion five-year deal with OpenAI, announced earlier this year, is its crown jewel, but it remains reliant on Microsoft for two-thirds of its revenue, a vulnerability if clients shift partners.

CoreWeave’s IPO—filed in March with a $35 billion target—will hinge on its ability to diversify its customer base and turn its losses around. The company’s Nasdaq listing (symbol CRWV) also faces scrutiny over its debt: it has raised over $14.5 billion since 2017, including a $350 million stake sold to OpenAI upon its own IPO.

While CoreWeave lacks Alibaba’s scale, its partnership with OpenAI positions it as a critical infrastructure provider. Yet competition is fierce. Alibaba’s Cloud Intelligence Group, for instance, has already claimed leadership in cloud databases and public cloud platforms, per Gartner and Forrester.

The Crossroads for AI Infrastructure

Both companies are vying for dominance in a market projected to hit $1 trillion by 2030, but their paths diverge. Alibaba’s diversified revenue streams—e-commerce, fintech, and cloud—offer stability, while CoreWeave’s all-in bet on AI infrastructure leaves it exposed to execution risks.

Investors will scrutinize:
- Alibaba’s cloud margins: Can it sustain gross margin expansion to 37.2% amid rising costs?
- CoreWeave’s client diversification: Will it reduce Microsoft’s 67% revenue share?
- AI adoption metrics: How many Qwen-based models are in use? What’s CoreWeave’s OpenAI revenue contribution?

Conclusion: A Tale of Two Tech Giants

Alibaba’s earnings are a litmus test for its ability to balance growth and profitability in a slowing global economy. A strong beat on revenue and net income—backed by AI and cloud metrics—could validate its $160 price target, while a miss might reignite concerns about its long-term trajectory.

CoreWeave, meanwhile, faces a binary outcome: prove it can grow revenue while shrinking losses, or risk being sidelined in a market where scale and capital matter. With its OpenAI deal and Nasdaq ambitions, CoreWeave has momentum, but execution remains unproven.

In the end, the AI race isn’t just about innovation—it’s about survival. For Alibaba, this earnings report is a chance to cement its leadership. For CoreWeave, it’s a high-stakes debut. Investors will decide which story holds more promise.