The excitement surrounding AI-related stocks has given Alibaba a fresh boost, helping it outperform rivals like Tencent, Baidu, and JD.com. A major catalyst? The emergence of Chinese AI startup DeepSeek, which recently unveiled cutting-edge technology that rattled Wall Street and ignited optimism in China’s tech sector. Investors for business have taken notice, and Alibaba is at the center of this AI-fueled resurgence.
Adding to the momentum, a report from The Information revealed that Apple is working with Alibaba to roll out AI features in China. This unexpected collaboration has further solidified Alibaba’s position as a leader in the AI space, sparking even more enthusiasm in the stock market index.
Alibaba’s comeback is no accident. It’s the result of a strategic shift led by two of Jack Ma’s closest allies: Chairman Joe Tsai and CEO Eddie Wu. Since taking over in 2023, they’ve refocused the company’s efforts on its core e-commerce business while aggressively expanding into AI.
With AI becoming a dominant force in the tech world, Alibaba has invested heavily in promising Chinese startups like Moonshot and Zhipu. It has also doubled down on its cloud business, slashing prices to win back customers who left during the company’s turbulent years. This move puts Alibaba in direct competition with Baidu, which had been leading China’s AI race until now.
In January 2025, Alibaba published benchmark scores that proved its AI capabilities are world-class. Its Qwen 2.5 Max model outperformed Meta’s Llama and DeepSeek’s V3 in various tests, cementing its position as a serious contender in the AI market. This performance boost is attracting new tech stock investors, many of whom see AI as a potential game-changer for Alibaba’s long-term growth.
However, challenges remain. While the global AI boom has driven strong demand, Chinese businesses and consumers have been slower to adopt and pay for AI services. This raises questions about how quickly Alibaba can monetise its AI investments.
Despite its recent rally, Alibaba’s stock remains undervalued compared to its U.S. tech counterparts. It’s currently trading at 12.2 times forward earnings, below its five-year average of 14.6 times. Some investors believe this presents a strong buying opportunity, especially given Alibaba’s plans to expand its international marketplaces and reduce its reliance on the domestic Chinese market.
Meanwhile, Alibaba’s upcoming financial results, scheduled for release next Thursday, will offer a closer look at its AI progress and cloud services outlook. If the company can continue to prove its AI capabilities while boosting revenue, it could reshape its position in the market and further drive investor confidence.
Alibaba’s resurgence is a story worth following for those keeping an eye on AI-related stocks. Combining a shifting strategy, major AI investments, and strong market momentum makes it one of the hottest stocks in the Chinese tech scene. Whether you’re tracking Bloomberg Businessweek headlines, following your Yahoo Finance portfolio, or keeping up with crypto market news, Alibaba’s transformation is a key narrative in the evolving tech landscape.
As AI continues to revolutionize industries, Alibaba’s bold bets could pay off big. For investors looking for the next big player in AI, this might be the stock to watch in 2025.
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