12 Cheap AI Stocks to Buy in 2025

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3. Alibaba Group Holding Limited (NYSE:BABA)

Analyst Upside (as of January 27): 33.40%

No. of Hedge Fund Holders: 115

Alibaba Group Holding Limited (NYSE:BABA) is the largest Chinese online retailer that uses AI in its e-commerce business. Alibaba is also expanding its presence in the cloud business. On January 21, the South China Morning Post reported that BABA’s cloud business and AI arm, Alibaba Cloud, has introduced an expanded suite of its proprietary LLMs under its Qwen family.

During the second quarter of FY2025, Alibaba Group Holding Limited’s (NYSE:BABA) cloud business posted a year-over-year increase of 7%, driven by double-digit growth in public cloud services. The company’s AI products within the cloud segment showed notable performance, maintaining a triple-digit growth for five consecutive quarters.

On January 21, BofA analyst Joyce Ju kept a Buy rating on BABA shares and increased the price target to $117 per share from a previous target of $112. The analyst expects the company to post a 9% year-over-year increase in revenue during Q3 FY2025 and surpass Wall Street estimates by 2%. Considering the sudden rise of Chinese AI startup DeepSeek, Chinese AI stocks hold a lot of promise in 2025.

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