Alibaba (BABA) is bragging about its newest artificial intelligence (AI) model, claiming it outperforms Deep Seek. Qwen 2.5-Max is the latest update to Alibaba’s AI model and the Chinese e-commerce and tech company claims it’s even more powerful than domestic rival Deep Seek-V3.
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Alibaba claims its Qwen 2.5-Max AI model isn’t just more powerful than Deep Seek as it also beats rivals in the U.S. The company says the model surpasses Microsoft (MSFT)-backed OpenAI’s GPT-4o and Meta Platform’s (META) Llama-3.1-405B.
Investors are excited about the potential of Alibaba’s newest AI model, sending shares of BABA stock up 4.04% this morning. That builds on a 6.72% increase on Tuesday and its 35.64% growth over the last year. Investors will also note that BABA stock is up 13.26% year-to-date.
What’s Next in the AI Development Race?
Each of these companies will no doubt continue to develop and advance their AI models to challenge each other. What’s most important is how efficiently they can do this. That’s what set off the AI crash earlier this week as DeepSeek achieved its strong performance at a fraction of the cost of other AI model developers.
There’s also some controversy over how DeepSeek developed its model so cheaply. Microsoft is probing a group linked to DeepSeek that it believes may have improperly acquired OpenAI data. This would have allowed it to increase performance while keeping development costs low.
Is BABA Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus for Alibaba is Strong Buy based on 11 Buy and one Hold ratings over the last three months. With that comes an average price target of $121.33, a high of $144, and a low of $105. This represents a potential 26.35% upside for BABA shares.
