Thomas Barwick
Kingsoft Cloud (NASDAQ:KC) reported Q1 2025 with revenue and adjusted EBITDA that came in below consensus due to a miss on the enterprise cloud that was negatively impacted by a combination of factors, including Chinese New Year
Kingsoft Cloud: Enterprise Cloud Drag, Margin Pressure, And Geopolitical Risk Keep Stock On Hold
Summary
- We rate Kingsoft Cloud as HOLD due to limited upside, margin pressure, and macro headwinds impacting enterprise cloud growth.
- KC's revenue and EBITDA missed consensus, with enterprise cloud weakness and increased AI investment weighing on margins and near-term outlook.
- Competition from DeepSeek and uncertainty around AI chip supply add to risks, while Xiaomi AI's ramp-up is still early and slow to monetize.
- Leasing AI infrastructure preserves cash but pressures margins; We recommend investors stay on the sidelines and prefer proven players like Alibaba.
Astrada Advisors delivers actionable recommendations that enhance portfolio performance and uncover alpha opportunities, supported by a strong track record in investment research at leading global investment banks. With expertise spanning technology, media, internet, and consumer sectors in North America and Asia, Astrada Advisors excels in identifying high-potential investments and navigating complex industries.Leveraging extensive local and global experience, Astrada Advisors offers a unique perspective on market developments, regulatory changes, and emerging risks. The research integrates rigorous fundamental analysis with data-driven insights, providing a nuanced understanding of key trends, growth drivers, and competitive landscapes.The focus is empowering investors with timely research and a comprehensive view of industry dynamics. Whether navigating volatile markets or exploring new trends, Astrada Advisors remains committed to delivering superior insights to drive informed investment decisions.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.