Will Alibaba’s AI Bet Pay Off Against Global Rivals?

Alibaba Group Holding Ltd. (NYSE:BABA) is one of the most profitable tech stocks to invest in now. On August 26, Bloomberg reported that Alibaba upgraded its open-source video AI model, Wan2.2-S2V, which can convert portrait photos into film-quality avatars capable of speech and performance. The announcement reflects Alibaba’s effort to accelerate AI innovation and keep pace with global rivals such as Google, Kuaishou, and emerging startups.

Will Alibaba’s AI Bet Pay Off Against Global Rivals?

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The company has increased its focus on AI in response to rising competition, though its near-term financial results have been mixed. In May, Alibaba Group Holding Ltd. (NYSE:BABA) reported 7% revenue growth, which was weighed down by weak domestic demand. Nonetheless, management has committed to long-term AI investments, pledging over ¥380 billion ($53 billion) toward infrastructure, including data centers, over the next three years.

Alibaba Group Holding Ltd. (NYSE:BABA) sees its AI and cloud network as a foundation for becoming a key partner to companies deploying real-world AI models, which require increasing computing power. The company’s stock has gained more than 46% year-to-date, with analysts broadly positive. Over 90% of analysts covering it have assigned a Buy or equivalent rating, and the consensus price target of $150 implies more than 20% upside from current levels.

Alibaba Group Holding Ltd. (NYSE:BABA) is one of China’s largest technology and e-commerce conglomerates. Beyond e-commerce, the company operates several businesses, including cloud services, digital payments, and logistics.

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.

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