Goldman Backs 5 China Internet Stocks Ahead of Q3 Earnings as Cloud and AI Growth Accelerate
Updated
Updated · Yahoo Finance · Nov 10
Goldman Backs 5 China Internet Stocks Ahead of Q3 Earnings as Cloud and AI Growth Accelerate
3 articles · Updated · Yahoo Finance · Nov 10
Summary
Goldman Sachs highlighted Tencent, Alibaba, PDD, Meituan and JD.com as its top China internet picks before third-quarter results, favoring games and entertainment as more defensive than e-commerce, advertising and local services.
Soft consumer spending drove that preference, while Goldman pointed to upside from gaming, cloud computing, AI and improving profitability across online transaction platforms.
Tencent and Alibaba led the growth case: Goldman forecast Tencent gaming and advertising revenue up 8% and 19%, while Alibaba cloud growth was seen accelerating to 53% with margins reaching 12.5%.
Profit improvement was central elsewhere, with Alibaba adjusted EBITA seen up 238% to 31 billion yuan, Meituan adjusted operating profit up 104% to 700 million yuan, and JD net profit up 39% to 8 billion yuan.
PDD stood out for cash generation rather than near-term earnings, with Goldman citing strong net cash and free cash flow but warning that higher costs and investment spending could pressure results.