Alibaba's financial results for the first quarter of FY2027 slightly exceeded market expectations, with adjusted EBITA coming in 7% higher than market forecasts and revenue largely meeting expectations. Daiwa predicts that the adjusted EBITA profit margin of its cloud business will continue to improve, with management's confidence in achieving a 20% profit margin by 2030 strengthened, thanks to economies of scale, an increased share of AI-driven revenue, and enhanced pricing power. Daiwa has raised its earnings per share forecasts for Alibaba for FY2027 to FY2029 by 3% to 5%, increased the target price from HK$175 to HK$180, and reiterated a 'Buy' rating.