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Why Alibaba (BABA) Stock Is Retreating Today

Alibaba (BABA) stock is falling 7% after the China-based tech conglomerate disclosed that it would spend at least 380 billion yuan or $52.44 billion on cloud computing and AI infrastructure in the next three years.

More About BABA’s Initiative

The amount that BABA plans to invest in cloud computing and AI infrastructure reportedly exceeds the total that it had spent on these areas over the last ten years.

A computer engineer seated in front of several connected consoles, illustrating the depth of cloud services offered by the company.

The initiative comes after BABA CEO Eddie Wu, on the firm’s last earnings call, referred to AI as a “once-in-a-generation” technology and called Artificial General Intelligence (AGI) the company’s primary target in the long term. Machines that achieve AGI can think, learn and act like humans.

Although BABA is currently benefiting financially from AI’s growth primarily through higher cloud-computing revenue, the company plans to also utilize the technology in its -commerce, enterprise services, and consumer applications.

BABA’s Achievements in AI

The sales of the conglomerate’s Cloud Intelligence Group jumped 11% last quarter versus the same period a year earlier, while the revenue generated by its AI-related products soared at least 100% year-over-year for the sixth straight quarter.

On Feb. 12, investment bank Jefferies raised its price target on BABA to $150 from $144, stating that its Qwen AI system powers a large percentage of the leading open-source large language models. Additionally, Qwen’s performance has surpassed expectations in a number of areas, according to Jefferies, which kept a Buy rating on the shares.

While we acknowledge the potential of BABA, our conviction lies in the belief that some 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.

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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