11 Most Promising Stocks According to Analysts

8. Alibaba Group Holding Ltd. (NYSE:BABA)

Number of Hedge Fund Holders: 107

Average Upside Potential as of April 23: 40.83%

Alibaba Group Holding Ltd. (NYSE:BABA) offers technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses engage with their users and customers. It has seven segments and also operates Taobao and Tmall, which are digital retail platforms. It also offers Alimama, which is a proprietary monetization platform.

On March 28, Mizuho analyst James Lee pointed out Alibaba’s strong AI strategy for enhanced internal productivity and product experiences. Alibaba has planned substantial AI infrastructure spending over the next 3 years. This is exemplified by the development of Qwen 2.5 Max, which is Alibaba’s most advanced LLM to date, with applications across various AI tasks. Qwen AI is the company’s family of LLMs, with over 90,000 derivative models.

Moreover, Barclays noted that the growth of Alibaba’s cloud business is accelerating. Alibaba Group Holding Ltd.’s (NYSE:BABA) cloud computing division improved by 13% year-over-year in FQ3 2025 due to rapid AI expansions. As the company continues to sell AI-related services to its customers, Barclays anticipates that the margins of Alibaba’s cloud unit will potentially improve going forward. The firm kept a $180 price target and an Outperform rating on the stock.

Patient Capital Opportunity Equity Strategy invested in Alibaba due to its discounted valuation and potential for Chinese stimulus. It stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q1 2025 investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) rebounded strongly in the first quarter following DeepSeek’s surprise AI product launch in early January that caught markets off guard. The development boosted expectations of improving competitiveness in a market largely considered “un-investable”. We’ve long appreciated Alibaba as it continued trading at a significant discount to its sum-of-the-parts valuation. With most investors writing off Chinese companies while our assessment of the odds of Chinese stimulus grew, we saw an opportunity to invest in a high-quality business at rock bottom prices. During this period, the company initiated both a dividend (1.0% Yield) and buyback program, repurchasing 7% of shares outstanding over the last twelve months. Unfortunately, much of the gains achieved in the first quarter have been reversed following escalating tariff tensions between the US and China. While the ultimate impact of tariffs remains uncertain, Alibaba has limited exposure to international markets with only 12% of revenue currently coming from outside of China. Though a tariff war broadly hurts economic activity and can create negative feedback loops into domestic demand, we believe Alibaba stands as one of the more insulated Chinese companies in this environment.”