We recently compiled a list of the Top 9 Trending AI News Updates Investors Should Not Miss. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against the other AI stocks.
US tech giants appear unfazed by the success of China’s cheap alternative AI models like DeepSeek as they announced roadmaps to invest billions of dollars this year in AI.
On February 10th, US equity features rose, hinting at a rebound from steep losses on February 7th as markets absorbed Donald Trump’s intentions to impose 25% tariffs on all US steel and aluminum imports.
“Risky assets are getting a bit desensitized to Trump’s tariff announcement,” said Mohit Kumar at Jefferies. “Our view in tariffs remains that they will cause volatility, are a negotiating tool and will eventually be not as bad as feared. However, we do see scope for further volatility over the coming weeks, with Europe likely to be the next target.
The gains in US stock futures could signal several buyers seeking to return to the market after the 1% retreat in the S&P 500 late last week.
Elsewhere, TSMC, the biggest contract chipmaker globally, said today that its Q1 revenue could hover at the lower end of its guidance due to $161 million in losses induced by earthquakes in January. Before DeepSeek’s launch, the company stated that its CapEx could touch $42 billion in 2025 due to AI demand.
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).
![Alibaba (BABA): Strengthening AI Leadership with Top Scientist Steven Hoi](https://imonkey-blog.imgix.net/blog/wp-content/uploads/2023/09/19161003/BABA-insidermonkey-1695154200895.jpg?auto=fortmat&fit=clip&expires=1770681600&width=480&height=269)
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 an e-commerce giant heavily leveraging AI, NLP, and ML to improve customer services, text analysis, and translation. Furthermore, Alibaba Cloud’s full-stack offerings enable developers to use AI-ready infrastructure to create and optimize foundation models and GenAI applications and deploy them cost-efficiently at scale. On the first day of the Lunar New Year, Alibaba Group Holding Limited (NYSE:BABA) launched its Qwen 2.5 AI model soon after the DeepSeek-V3 rollout. The Qwen 2.5 is pre-training on large-scale multilingual and multimodal data to facilitate natural language processing, text generation, AI tool use, and chatbot role-play.
On February 10th, JPMorgan analyst Alex Yao highlighted sensing a growing positive sentiment on Alibaba Group Holding Limited (NYSE:BABA) shares, given the 13% stock price rally in the past five trading days. The brokerage maintained an “Overweight” rating on the stock with a $125 target price. The analyst noted that there are still mixed views and positions on the stock, implying “room for share price movement on both sides.” The brokerage believes investors are divided on the potential upside of Alibaba’s AI initiatives and cloud business. JPMorgan thinks showcasing a concrete plan for monetizing AI capabilities “could alleviate investor concerns about the sustainability of the current rally.”
Overall BABA ranks 1st on our list of the AI stocks investors should not miss. 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 timeframe. 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.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.