Why is Alibaba Group Holding Limited (BABA) One of the Best E-Commerce Stocks to Buy Now

Alibaba Group Holding Limited (NYSE:BABA) is one of the best e-commerce stocks to buy now. On February 5, Alibaba Group Holding Limited (NYSE:BABA) received a rating update from Aletheia Capital, which reaffirmed a Buy rating on the stock. In a separate development, Reuters reported on February 2 that Alibaba Group Holding Limited (NYSE:BABA) announced plans to spend 3 billion yuan during the Lunar New Year holiday as a means to attract users to its Qwen AI app.

Alibaba (BABA) Soars 8% on US Chip Exports Ease to China

Reuters stated that the announcement fuels the race between the largest tech firms in China, as Alibaba Group Holding Limited’s (NYSE:BABA) plans triple the spending goals announced by rivals Tencent and Baidu earlier. The pledge is set to start on February 6, and includes incentives for drinks, dining, leisure, and entertainment, with “large red envelopes distributed continuously,” according to the company.

For additional perspective, Tencent and Baidu announced plans to spend 1 billion yuan and 500 million yuan on similar promotions for their AI chatbots, respectively. Reuters reported that China’s AI sector is seeing accelerated competition since the launch of DeepSeek’s R1 model in January last year, which shook global AI markets and prompted expedited adoption and increased rivalry among domestic players.

Alibaba Group Holding Limited (NYSE:BABA) manages and provides technology infrastructure and marketing platforms. It operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others segments.

While we acknowledge the potential of BABA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BABA and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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