Is Alibaba The Next AI Threat?

As a week of artificial intelligence (AI) news continues at pace, Alibaba Group Holding Limited (HKG: 9988) see's itself emerging as a formidable contender. Known for its significant contributions to e-commerce and cloud services, Alibaba today stated that it's Qwen 2.5 model surpasses that of the headline grabbing DeepSeek-V3 that has caused such market disruption on Monday.

With markets in HK closed for Chinese New Year, we can look to the US listed ADR where Alibaba's stock is trading up 3.03% through the pre-market session. The launch (on Alibaba Cloud Bailian platform) coming today is maybe an unusual move, but with all the news surrounding it's competitors, it is no surprise that Alibaba want to share some of the limelight.

The company claims that it's latest model outperforms OpenAI’s GPT-4o, DeepSeek-V3, and Meta’s Llama-3.1.

Qwen 2.5 is not the firm's first major move in the sector. Alibaba's AI-driven cloud services have also been its standout performer, boasting a compounded annual growth rate (CAGR) of approximately 120% over recent quarters. This impressive traction has not only bolstered investor confidence but also positioned Alibaba as a primary beneficiary of the burgeoning AI market. The company's focus on integrating AI into its core operations showcases its forward-looking approach in capturing market opportunities.

With AI continuing to captivate investor interest and drive market dynamics, figures like Alibaba are expected to play a pivotal role in shaping the landscape. The company’s strategic focus and ongoing investment in AI development could well secure its place as a key player in the future AI ecosystem.

Investor sentiment towards Alibaba remains bullish, attributed in part to the forecasted 33.40% upside in the company's market value. This optimism is further supported by substantial backing from hedge fund holders and positive projections by analysts, including an updated price target from BofA analyst Joyce Ju. Her recent analysis underscores the potential for significant growth, highlighting Alibaba in the AI domain.