We recently published a list of the 10 Best Machine Learning Stocks to Buy Now. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against other machine-learning stocks.
Grand View Research reported that the global machine-learning market was valued at $36.73 billion in 2022. It’s now expected to grow at a 34.8% CAGR from 2023 to 2030. Machine learning helps machines and systems learn from experience instead of through explicit programming. It uses algorithms to improve and analyze vast amounts of complex data to make informed decisions. Machine learning is quickly progressing as AI is rapidly expanding and transforming how businesses and individuals operate. These technological advancements are revolutionizing consumer experiences, and enabling convenient creation of digital services, products, and optimized supply chains. With this, startups can focus on specific solutions while larger companies can deliver comprehensive AI platforms.
On April 10, Amazon CEO Andy Jassy joined CNBC’s ‘Squawk Box’ to discuss the cost of AI and what has to happen to bring it down. Jassy emphasized that the growth in data center demand is now so significant that there is no foreseen attenuation here, even with ongoing macroeconomic uncertainties under tariffs. While there’s a general belief that the emergence of DeepSeek could now reduce the need for extensive data centers, processing power, and energy consumption previously forecasted at different tech companies, Jassy thinks that DeepSeek’s introduction did not disrupt any of this. Despite cost reductions that occurred have already over time, AI deployment still requires significant investment. He thinks that the current AI operations are expensive due to chip costs and other factors, but big techs, including his own company, would welcome any reductions in AI costs for customers moving forward.
Jassy underscored the demand for data centers despite tariff impacts and reflected optimism regarding lowering costs, which would potentially drive innovation and expanded use of AI across industries. AI is still limited and requires substantial human oversight as of now but it has massive potential across various sectors.
Our Methodology
We sifted through ETFs and financial media reports to compile a list of the top ML stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 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: 107
Alibaba Group Holding Limited (NYSE:BABA) provides technology infrastructure and marketing reach. It helps vendors and customers connect internationally. It has 7 segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media & Entertainment, and Innovation Initiatives & Others. It uses machine learning to optimize e-commerce recommendations and enhance its cloud services and logistics operations.
The company is actively expanding its Cloud Intelligence Group, which develops and provides cloud computing and AI services. By FQ3 2025, this segment had experienced triple-digit percentage revenue growth year-over-year for 6 consecutive quarters. The overall revenue growth for the company in FQ3 was 11%. Qwen AI, which is the company’s family of LLMs, is becoming increasingly popular with over 90,000 derivative models. More than 290,000 companies are using its APIs.
On March 28, Mizuho analyst James Lee reported that the company’s AI strategy is rather solid and positions it for enhanced internal productivity and better product experiences. The company is headed toward AGI (artificial general intelligence), as well as offering easy-to-use AI tools and broader solutions for businesses. Alibaba Group Holding Ltd. (NYSE:BABA) is now developing Qwen 2.5 Max, which is the company’s most advanced LLM so far with applications across various AI tasks. This highlights its increased AI infrastructure spending planned over the next 3 years.
Overall, BABA ranks 8th on our list of the best machine learning stocks to buy now. While we acknowledge the growth potential of BABA, our conviction lies in the belief that AI stocks hold great promise for delivering high 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 an 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.