Alibaba Group Holding is expected to further accelerate cloud growth, expand operating margins and achieve faster payback on artificial intelligence investments, analysts say, as the Chinese tech giant reaches the halfway mark of its massive 380 billion yuan (US$56 billion) AI infrastructure spending plan.“The most important incremental message, in our view, is that cloud growth has not yet peaked,” Nomura analysts said in a research note on Friday.“This accelerating growth is occurring alongside meaningful margin expansion rather than at the expense of profitability,” Nomura analysts wrote, highlighting that the AI cloud unit’s adjusted Ebita margin reached 11.6 per cent, up from about 7 per cent a year ago.Jefferies expected revenue growth for Alibaba’s Cloud and Compute Services, the company’s new reporting segment covering its cloud business and T-Head chip arm, to accelerate beyond 50 per cent year on year in the September quarter, with momentum building further into the next two quarters through March 2027.We believe Alibaba’s results have delivered positive developments around cloud growth as a bright spotGoldman SachsFor the first time, the company provided clear visibility to investors on payoffs from its AI capital expenditures (capex). During an earnings call on Thursday, group CEO Eddie Wu Yongming said its AI computing investments would break even within three years – or possibly two as gross margins rose.