Alibaba Bets $67.7 Billion on Computing Power, Pauses Buybacks, Gambling on Three-Year Payback

Alibaba's fiscal Q1 2027 net profit plunged 75%, dragged by accounting factors including high tax rates, impairments, and fines. However, its core business foundation remains solid, with Alibaba Cloud external revenue surging 45% and AI-related product ARR reaching RMB 49.5 billion. The company has paused share buybacks, betting RMB 67.7 billion in quarterly capital expenditure to expand computing power, with the CEO predicting investment recovery within three years, shifting its valuation logic toward AI infrastructure transformation.