How Alibaba's Cloud Revenue Stacks Up Against Azure, AWS, Google Cloud

Alibaba Group Holdings Limited BABA reported mixed results for its December quarter, sending its shares lower Thursday. Here's a look at how the company's cloud business did vis-à-vis the competition. 

Alibaba's Cloud Growth Slows: Alibaba's December quarter cloud revenues came in at $3.07 billion, or roughly 5% of its total revenues of $38.07 billion. Cloud revenues grew 27% year-over-year, slowing from the 33% rate in the September quarter.

Alibaba attributed the year-over-year growth to robust demand from financial and telecom industries. That said, the segment continued to be impacted by a loss of contract from a top customer that decided to stop using Alibaba's overseas cloud services for its international business.

Although the company did not name the customer, reports suggested in mid-2021 that TikTik's parent ByteDance was the customer to which Alibaba was alluding.

Sequentially, cloud revenues slid 1.13%.

The company noted that its cloud revenue is diversifying, with revenue contribution from non-internet industries steadily increasing. In the December quarter, non-internet industries contributed over 52% to cloud revenues.

Related Link: Alibaba Kicks Off 2021 'Singles Day' Global Shopping Festival: What You Need to Know

Alibaba Vs. US Cloud Giants: Amazon, Inc.'s AMZN AWS, the leader in the cloud race, reported 39.5% year-over-year revenue growth to $17.78 billion for the fourth quarter.

Software giant Microsoft Corporation MSFT reported revenue growth of 46% for its Azure and other cloud services. Revenue from the overall cloud business that includes Azure, GitHub and server products rose 25.5% to $18.33 billion.

Alphabet, Inc.'s GOOGL GOOG Google Cloud revenues climbed 44.6% to $5.54 billion.

Alibaba's cloud revenues lags the big three U.S. cloud companies both in terms of absolute numbers and the percentage growth. Ahead of the Chinese company's earnings release, Needham analyst Vincent Yu tempered his expectations for the cloud business.

The analyst blamed the weakness on struggling businesses of Alibaba's cloud customers in internet, gaming and education sectors that them to trim budgets.

In the long run, the analyst said he expects additional market share gains to come from food delivery and offline retail, which represent a large, underpenetrated total addressable market.

Alibaba shares were down 1.56% at $108.01 ahead of the close Thursday. 

Related Link: Amazon (AWS) Vs. Microsoft (Azure) Vs. Google: How Cloud Revenues Stacked Up In Q4