We recently published a list of Top 10 Stocks Everyone Is Talking About These Days. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against other top stocks everyone is talking about these days.
Major AI stocks are wavering as investors assess the impact of decreasing hardware costs and their effects on technology spending. T. Rowe Price’s Tony Wang said in a latest program on CNBC that while Mag. 7 companies are still strong, there are opportunities to look elsewhere as the technology-related gains broaden out.
“You saw the Mag. 7 really dominate the last two years, and I think going into this year, I think that there’s a lot of concern over the capex that’s being spent. I mean, they’re kind of becoming fundamentally different businesses in some respect in terms of the capital intensity. And then on top of that, you had kind of more inline reports, and so when you’re spending a lot of capex and you’re coming in line, I think that tends to set up for a tougher stock reaction. And so, you know, I think there’s other areas in tech that naturally things will broaden out to, like things that have more bottoming fundamentals and can have a little bit easier setup. So I think that, you know, we’re looking for more broadening, and I think that these are still very good companies and still like a core part of tech portfolios, but I think there’s opportunity elsewhere as well.”
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For this article, we picked 10 stocks currently trending on latest news and analyst ratings. With each stock we have mentioned the number of hedge fund investors. 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 Funds Investors: 115
Benchmark recently added Alibaba to its Best Ideas list. The firm expects Alibaba Group Holding Limited (NYSE:BABA) shares to see a structural rerating in 2025 as its core businesses strengthen. They see e-commerce growth picking up, helped by better take rates, and anticipate AIDC reaching profitability in FY26.
Benchmark believes Alibaba Group Holding (NYSE:BABA) will benefit from the broader AI adoption in China, driven by DeepSeek’s rise.
“We see BABA as a leading China AI play and recommend it as a top pick for 2025,” Benchmark said. “We firmly believe that full-stack service providers with robust infrastructure capabilities will be the primary beneficiaries of China’s growing AI adoption. BABA stands out due to its competitive advantages in cloud infrastructure, proprietary models, application versatility across various use cases, and flexible edge device capabilities.”
“As China’s largest cloud service provider, AliCloud offers extensive support in computing resources and technical collaboration, along with its unmatched consumer behavior data (such as transaction and payment information), making it highly attractive to large-scale edge device OEMs. Apple’s partnership with BABA could provide a significant boost, enabling BABA to leap ahead in the AI cloud competition,” they added.
The firm set a $160 price target on Alibaba Group Holding (NYSE:BABA).
Baron Emerging Markets Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q4 2024 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) is the largest retailer and e-commerce company in China. Alibaba operates shopping platforms Taobao and Tmall as well as businesses in logistics, local services, digital media, and cloud. Shares fell on continued weakness in core domestic commerce growth. Quarterly results were roughly in line with expectations, with relative strength in profitability, but the timing for acceleration in core gross merchandise value is still unclear. We retain conviction that Alibaba is well positioned to benefit from China’s ongoing growth in online commerce and cloud in China, though competitive market concerns remain.”
Overall, BABA ranks 6th on our list of top stocks everyone is talking about these days. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that under the radar 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.
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