Alibaba (BABA) Cloud Gets Smarter With SAP Integration

Alibaba’s (BABA) cloud arm, Alibaba Cloud, has been a big focus for the company in recent years as it looks to take on global cloud giants like Amazon’s (AMZN) AWS and Microsoft’s (MSFT) Azure. The company recently joined forces with SAP to help businesses work faster and smarter. This new partnership boosts Alibaba’s place in the enterprise cloud market by adding top business tools to its services.

By bringing together Alibaba Cloud’s strong tech base with SAP’s smart business software, the two aim to offer better cloud and AI tools to companies across the globe. A key part of the deal is adding SAP’s Cloud ERP Private Edition into Alibaba’s systems. Along with this, other SAP tools like Business AI, SuccessFactors, Concur, and Ariba will also be added. Together, these tools will help automate tasks, improve planning, and make daily work easier.

Alibaba Eyes Growth Beyond China

While the partnership will begin in China, Alibaba plans to roll out SAP’s cloud tools in Southeast Asia, the Middle East, and Africa. These regions show strong growth chances thanks to rising internet use and digital change.

By offering local businesses trusted and flexible cloud systems, Alibaba is well-positioned to capitalize on this trend and diversify its revenue sources beyond China.

 “This partnership shows our shared goal to support global businesses with top tech,” said Alibaba Chairman Joe Tsai.

Cloud Growth Shines Despite Challenges

This team-up with SAP could act as a strong push for Alibaba’s stock. The company has faced recent regulatory challenges and slower growth in some areas, but its cloud unit is still a bright spot. In the recent Q4 FY25 earnings call, Alibaba pointed to the solid growth in its Cloud arm, where revenue rose 18% from a year ago to RMB30.1 billion. This jump came from strong demand for AI tools, which have now seen triple-digit growth for seven straight quarters.

After Alibaba’s earnings on May 15, multiple Wall Street firms maintained a positive outlook on BABA stock. They see Alibaba Cloud as a key part of the company’s growth story. Adding SAP’s business software could bring in more clients and help improve both sales and profit in the long run.

Is Alibaba Stock a Good Buy Right Now?

Analysts remain highly bullish about Alibaba’s stock trajectory. With 12 unanimous Buy ratings, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $164.54 implies 37.67% upside potential from current levels.

See more BABA analyst ratings