Alibaba jumped 5.36% Friday. Amazon gained 3.29%. Both sell the combination investors want to hear about: e-commerce, cloud infrastructure and AI. But buying the story means asking who turns that demand into earnings and cash per share.
Amazon is the closest U.S. counterpart for this comparison. Their customers, geographic exposures and retail economics differ, so this is a comparison of investment cases rather than two interchangeable businesses.
The cloud race is real
For the quarter ended June 30, Alibaba’s AI Cloud and Compute Services revenue grew 45% to $7.14 billion. AWS grew 37% to $42.2 billion. Alibaba has the faster reported growth rate; Amazon has roughly six times the segment revenue. Alibaba’s new segment includes T-Head, with prior-year figures recast. Alibaba’s AI update and Amazon’s Q2 results.
Profit definitions matter: Alibaba’s cloud adjusted EBITA margin was about 11.6%, versus AWS’s 39.4% operating margin. These measures are not directly interchangeable. Alibaba’s AI Labs and Applications costs also sit in a separate segment, so its cloud margin does not represent its entire AI effort. Alibaba’s financial release.
My interpretation: Alibaba offers a smaller cloud business with room to scale. Amazon already demonstrates substantial cloud operating earnings. Faster growth alone does not settle the investment question.
Growth comes with a bill
Alibaba generated $3.38 billion of quarterly operating cash, while its reported free cash flow was negative $6.58 billion. Its adjusted diluted EPS per ADS fell 42% year over year; that is a separate non-GAAP measure from reported earnings. Alibaba’s financial release.
For Amazon, $45.39 billion of quarterly operating cash minus $53.08 billion of net cash property purchases leaves negative $7.69 billion. This calculation excludes acquisitions and financing; Alibaba’s FCF has different exclusions and a merchant-deposit adjustment. The chart therefore shows each calculation separately. Amazon’s cash-flow statement.
Funding matters, too. Alibaba completed a HK$80 billion placement of 710 million new ordinary shares in August to fund AI infrastructure. That strengthens funding but increases the share base. June-quarter diluted shares rose about 1.0% year over year at Alibaba and 0.9% at Amazon, before the placement. Company-wide progress must eventually translate into progress per share. Placement completion, Alibaba results and Amazon results.
The headline P/E can mislead
Using Friday’s closes and Stock Analysis’s displayed trailing EPS, BABA is approximately 25.4 times earnings and AMZN 21.1 times. These are provider-based trailing calculations, not normalized earnings multiples or forward estimates. BABA uses USD earnings per ADS; each ADS represents eight ordinary shares. BABA snapshot and AMZN snapshot.
Amazon’s June-quarter earnings included $53.4 billion of pretax other income, primarily from Anthropic investments. That boosts the earnings denominator without representing recurring retail or AWS profit. Alibaba’s earnings also contain investment effects. Neither headline multiple proves which operating business is cheaper. Amazon results and Alibaba results.
A matched forward comparison would need the same earnings horizon. Alibaba’s March fiscal year-end and Amazon’s December year-end mean that simply pairing their “next year” multiples would compare different periods. No forward valuation winner is assigned here.
The charts show different recovery stages
BABA closed at $111.37, below its $116.28 50-day and $129.93 200-day averages. Its April–October closing peak of $145.81 on May 13 fell 35.0% to $94.81 on June 26. The rebound from that low is 17.5%; Friday’s rally has not erased the decline.
AMZN closed at $262.43, above its $259.10 50-day and $242.15 200-day averages. Its August 3 closing peak of $284.02 fell 13.4% to $245.96 on September 16, followed by a 6.7% rebound. Both calculations use closing extremes within the displayed window, not 52-week or intraday extremes.
The week’s gains were 5.21% for BABA and 4.34% for AMZN. Prices and moving averages use split-adjusted daily closes through October 9; dividends are excluded. BABA price cross-check and AMZN price cross-check, with Yahoo Finance daily data and YieldTerminal calculations.
What would change the case?
For Alibaba, I want sustained cloud demand alongside improving group earnings, less cash consumed after infrastructure spending and returns that justify the expanded share base. Slower monetization or continued spending without per-share improvement would weaken the case. China policy, currency and shareholder-structure risks also deserve separate consideration.
For Amazon, I want AWS operating strength to translate into more cash retained after the buildout. Weaker utilization or spending that continues to outrun operating cash would weaken that case, even if investment marks keep reported EPS high.
My view: Amazon currently has the stronger operating evidence and price trend. Alibaba has an attractive cloud growth opportunity, but the broader earnings and funding picture needs to catch up. This is a watchlist comparison, not a price target or an automatic buy on either side.
Educational research, not personalized investment advice. USD financial translations use the companies’ reported figures; segment definitions and cash-flow adjustments differ. Financial periods match June 30, although Amazon calls it Q2 and Alibaba its June quarter. Price changes do not establish what caused them.