Chinese tech giant Alibaba’s (BABA) Hong-Kong listed shares (HK:9988) jumped over 8% today, after the company launched its new open-source AI (artificial intelligence) model, which challenges DeepSeek’s R1 model. Alibaba’s AI unit, Qwen, unveiled its QwQ-32B model through an X post this morning. Qwen boasted that QwQ-32B model used only a fraction (5%) of the parameters that DeepSeek’s R1 model uses but gave a similar output.
Investors cheered the news, pushing its shares higher. BABA stock is also trending up 3.6% in pre-market trading on the NYSE, at the time of writing. Interestingly, stock prices of all major Chinese tech stocks soared yesterday, including Alibaba’s, after China strengthened its support for China’s AI, humanoid, and 6G telecom industries. Governments are also increasingly adopting AI models in their agencies to improve the efficiency.
Alibaba’s Qwen Launches R1 Rival
Alibaba’s new reasoning model has only 32 billion parameters, while the R1 model has 671 billion. AI models use parameters while training on the large quantity of datasets. These parameters determine the model’s behavior and its ability to generate accurate responses. Hence, the model’s name includes the figure 32B to refer to the small number of parameters. Despite having fewer parameters, the QwQ-32B model reportedly performs just as well as the rival R1 model.
The QwQ-32B model is available on Alibaba’s chatbot app called Qwen Chat. Users can select from a variety of models on this app, including its most advanced Qwen2.5-Max model. The QwQ-32B model showed notable performance in benchmark tests such as Math reasoning, coding, and general problem-solving. The company also added that QwQ-32B’s performance was comparable to some of the renowned models such as OpenAI’s o1 mini and DeepSeek’s R1.
Importantly, Alibaba remains one of the largest AI beneficiaries in China. The company has planned to invest $52 billion in AI infrastructure over the next three years, making it one of the largest AI investments in the nation.
Is BABA a Good Stock to Buy Now?
After undergoing tough regulatory crackdown for years, Alibaba is now free from the shackles. BABA stock has gained over 66% so far in 2025, as investors have started recognizing the great growth potential of this e-commerce behemoth. Analysts too remain highly optimistic about Alibaba’s stock trajectory.
On TipRanks, BABA stock commands a Strong Buy consensus rating based on 15 unanimous Buy ratings. The average Alibaba stock price target of $165.31 implies 17.2% upside potential from current levels.
