Before the market bell even rang on Thursday, Alibaba shares went on a gaining spree and hit record highs. The stock saw gains of roughly 13% in pre-market hours after the company’s CFO announced a positive forecast for 2018 revenue.
Chief Financial Officer Maggie Wu said on Thursday during an investor conference in Hangzhou, China that the company forecast a nearly 50% year-over-year increase in 2018 revenue. The company is expecting sales growth to grow 45% to 49% this year. This is not only 10% ahead of what analysts had expected but also Yahoo Finance had this number at 35.8% before.
According to The Financial Times, when the CFO made this statement, it garnered “gasps of wow” from investors at the company’s headquarters.
It looks like China’s shoppers are still very enthusiastic about the online frontier. In the 2017 fiscal year, the e-commerce giant saw a 56% increase in revenue.
Shares of Alibaba have gained around 62% from a year ago and more than 40% just this year.
The company has been looking to expand into artificial intelligence with new business lines, as well as expand on big data and cloud computing.
According to CFO Wu, the firm would reinvest funds to attract new users and expand its business-to-consumer sales base.
Jefferies analyst Jessie Guo wrote in a note to clients, “The company will continue building its ecosystem based on data technology with core businesses supported by payment, logistics, data management platform and cloud.”
Guo has a buy rating on Alibaba and a price target of $122 which has already been surpassed.
Disclaimer: We have no position in Alibaba Group Holding Ltd (NYSE: BABA) and have not been compensated for this article.