Citibank: Alibaba-W (09988) capital expenditure forecast for the 2027-2029 fiscal year, AI development momentum accelerates

The Zhitong Finance App learned that Citi released a research report stating that it maintains the Alibaba-W (09988, BABA.US) “buy” rating, with a target price of 190 US dollars for US stocks and a target price of HK$189 for H shares. The bank pointed out that Alibaba's activities on the first day of the 2026 Yunqi Conference highlighted that its AI development momentum in the direction of self-developed chips, supernodes, and the dual-track Tongyi Qianwen model is accelerating, strengthening its vertically integrated full-stack AI ecosystem.

To support the 20 gigawatt AI infrastructure target set by management, Citi assumes that capital expenses and operating expenses are shared with partners on a 50/50 ratio, and calculated at 30 billion US dollars per gigawatt, and raised Ali's capital expenditure forecast for each fiscal year 2027 to 2029 to 258 billion yuan, 283 billion yuan, and 282 billion yuan.

The bank pointed out that under the assumption that the revenue-to-GW ratio is 40%, external AI cloud revenue is expected to reach US$168 billion by fiscal year 2033, which is equivalent to a compound annual growth rate of 40% from 2026 to 2033; if the ratio is between 30% and 50%, external cloud revenue will be between US$126 billion and US$210 billion. Furthermore, as of September 2026, Alibaba Cloud's MaaS customer base grew 6 times year-on-year to 6 million, and annual recurring revenue accelerated to 20 billion yuan. Pingtou released the Zhenwu V900 accelerator and the Lingjun supernode, while Qianwen promoted the flagship 2.4 trillion parameter Qwen3.8-Max and expanded the multi-modal ecosystem.