Why Alibaba Group Holding Ltd. (BABA) Surged On Friday?

We recently published a list of Five Chinese Firms Dominate Friday’s Top 10 Gainers. In this article, we are going to take a look at where Alibaba Group Holding Ltd. (NYSE:BABA) stands against the other friday’s top gainers.

The stock market suffered a bloodbath on Friday, with major indices posting whopping declines, as investors sold off positions for saver havens amid concerns about a slowing economy and sticky inflation.

The Dow Jones fell by 1.69 percent, the S&P declined by 1.71 percent, while the tech-heavy Nasdaq nosedived by 2.20 percent.

Meanwhile, 10 stocks—predominantly Chinese firms—defied a broader market downturn, clocking in gains.

To come up with Friday’s best performers, we considered only the stocks with $2 billion in market capitalization and $5 million in daily trading volume.

An e-commerce platform displaying a wide range of products to customers online.

Alibaba Group Holding Ltd. (NYSE:BABA)

Alibaba rallied for a second day on Friday, adding 5.72 percent to finish at $143.75 apiece as investors cheered twin news that the e-commerce giant would expand heavily in Artificial Intelligence over the next three years, coupled with better earnings performance reports.

In a call with analysts, BABA CEO Eddie Wu said that the group would invest heavily in cloud and AI infrastructure, more than the amount it spent over the past decade. The announcement came at a time when companies and industries in China are slowly integrating DeepSeek into their operations to support growth.

Wu, however, declined to elaborate on the amount to allocate but emphasized that the primary objective was to pursue AI. Part of its plans would see the launch of a deep reasoning model as it seeks to compete with DeepSeek and OpenAI’s recent models that have reasoning capabilities for solving complex tasks.

During the fourth quarter of 2024, BABA saw net income attributable to shareholders increase by 239 percent to $48.9 billion from $14.4 billion in the same period last year, while revenues rose 8 percent to $280 billion from $260 billion.

Overall, BABA ranks 6th on our list of friday’s top gainers. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some 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 as promising as 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.