1. Alibaba Group Holding Limited (NYSE:BABA)
Forward P/E as of April 11: ~10.4x
Average Upside Potential: ~55.4%
Number of Hedge Fund Holders: 107
Alibaba Group Holding Limited (NYSE:BABA) provides internet infrastructure, electronic commerce, online financial, e-commerce, retail, as well as internet content services through global marketplaces, and offers entertainment, digital media, logistics, and cloud computing solutions. Citi analyst Alicia Yap reaffirmed a “Buy” rating on the company’s stock with the consistent price objective of $169.00. The analyst exhibited a favourable outlook on the latest AI advancements and expects that Alibaba Group Holding Limited (NYSE:BABA), together with other Chinese tech entities, will continue to expedite and refine technological progress over the coming months.
Alibaba Group Holding Limited (NYSE:BABA)’s emphasis on AI forms part of its broader strategy to remain at the forefront of technological innovation and to offer cutting-edge solutions to its clients. With the company continuing to invest in AI and other technologies, Citi remains optimistic about the stock. The AI integration across the platforms can result in enhanced operational efficiency, improved user experiences, and new revenue streams. Using AI to enhance e-commerce platforms can result in improved ad-tech capabilities.
Nightview Capital, an investment management company that concentrates exclusively on publicly traded equity strategies, published its Q4 2024 investor letter. Here is what the fund said:
“Artificial intelligence is no longer just a promise—it’s becoming the defining force of the modern economy. From self-driving vehicles to humanoid robotics, intelligent systems are not only enhancing efficiency but unlocking entirely new markets. These systems process and learn from vast amounts of real-world data, iterating and improving at a scale no human could achieve.
In our view, this isn’t just innovation; it’s exponential evolution. Companies leading the AI revolution are building formidable data moats, making it nearly impossible for latecomers to compete. Every mile driven by an autonomous vehicle, every task completed by an industrial robot—these actions feed a cycle of continuous improvement.
Industries like transportation, healthcare, and logistics are on the brink of massive disruption, and we believe this is a pivotal moment.
Alibaba Group Holding Limited (NYSE:BABA): Core Opportunity” Alibaba’s focus on stabilizing its core businesses, coupled with growth of its cloud and AI divisions, positions the company for a breakout. With 25% of its market cap in cash, We believe Alibaba offers a highly compelling risk / reward opportunity from a valuation perspective.
Competitive Advantage: Core Business Recovery: Alibaba’s e-commerce platforms, including Taobao with 930 million monthly active users, remain instrumental in China’s retail landscape. Revenue grew 5% YoY in the latest quarter, reflecting strategic improvements in user experience and pricing…” (Click here to read the full text)
While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than BABA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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