Cloud is the reason for most of Amazon’s appreciation in value over the last decade and that could be true for Alibaba eventually

Before the release of this financial report, except Alibaba’s core commerce business, investors are also focused on cloud computing revenue even though it still accounts for under 10% of total sales. That’s because investors see Alibaba’s cloud efforts as key to the company’s future growth prospects and profitability.

“Cloud growth reacceleration is key for me to turn positive again on the fundamentals because cloud generates much more operating leverage than e-commerce fulfillment and is intrinsically a much more profitable business,” CFRA’s Freeman said.

China Merchants Securities forecasts for the cloud business is 13% YOY growth, which would be a slight acceleration from the March quarter.