We recently published a list of Top 10 AI Stocks That Are Being Monitored By Wall Street. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against other top AI stocks that are being monitored by Wall Street.
As the global tech sector was catching up to the disruption caused by DeepSeek’s r1 AI model, Chinese e-commerce giant Alibaba announced its brand new Qwen 2.5 AI model on the first day of the Lunar New Year. The Qwen 2.5 is pre-trained on large-scale multilingual and multimodal data and rivals DeepSeek’s AI model.
“Qwen 2.5-Max outperforms … almost across the board GPT-4o, DeepSeek-V3 and Llama-3.1-405B,” the group’s cloud unit on its official WeChat account.
The latest Chinese AI model release also sent US firms scrambling to innovate and stay ahead of the competition. OpenAI CEO Sam Altman recently teased several “exciting new features” coming to ChatGPT and a new ChatGPT Gov tool to bolster ties with the US government.
The rise of advanced, cost-effective Chinese AI models has introduced volatility in US stocks as analysts rampantly rerate companies and shift outlooks based on the rapidly evolving tech landscape.
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An e-commerce platform displaying a wide range of products to customers online.
Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Alibaba Group Holding Limited (NYSE:BABA) is a leading e-commerce giant that is heavily tapping into AI, NLP, and machine learning to enhance customer support, text analysis, and translation. Alibaba Cloud’s full-stack offerings allow developers to leverage AI-ready infrastructure to build and optimize foundation models and GenAI applications, customize them based on business preferences, and deploy them at scale cost-efficiently. On the first day of the Lunar New Year, the company launched its Qwen 2.5 AI model, rivaling the recently launched DeepSeek-V3. The Qwen 2.5 is pre-training on large-scale multilingual and multimodal data to support natural language processing, text generation, AI tool use, and chatbot role-play.
On January 28th, Goldman Sachs reiterated a “Buy” rating on Alibaba Group Holding Limited (NYSE:BABA) and maintained a $117 target price per share. The brokerage highlighted the launch of the Qwen2.5-VL open-source AI model and how agile Chinese models and improvements in computing cost efficiencies offer more room for the adoption/exploration of AI applications and enhance the global growth potential for Chinese players. Analysts added that Alibaba Group Holding Limited (NYSE:BABA) stock’s current market capitalization has already priced in the unfavorable e-commerce competition.
Overall, BABA ranks 2nd on our list of top AI stocks that are being monitored by Wall Street. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BABA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.