Chinese technology company Alibaba’s (BABA) stock has surged by over 80% so far in 2025. Meanwhile, its Hong Kong-listed shares (HK:9988) have gained over 75% in the same period. Overall, investors growing confidence in Alibaba’s AI strategy has fueled optimism around the stock. Looking ahead, Alibaba remains well-positioned to take advantage of China’s anticipated surge in AI demand, particularly following the launch of DeepSeek earlier this year. According to analysts, BABA stock has a Strong Buy rating.
Recently, Alibaba’s Hong Kong-listed stock also benefited from a broader rally in Chinese stocks, driven by expectations of increased stimulus from Beijing, particularly measures aimed at boosting consumer spending.
Alibaba Goes All-In on AI
According to a recent report by the Financial Times, Alibaba, under CEO Eddie Wu, is making a major shift toward AI. Wu has reportedly instructed all divisions that their 2025 performance will be assessed based on their ability to integrate AI for growth.
The report further stated that Alibaba is also exploring AI applications to enhance internal operations beyond its AI-driven consumer products, particularly within its key e-commerce platforms, Taobao and Tmall.
Notably, Alibaba is a key player in China’s AI industry and one of its biggest investors in the technology. In February, the company committed $53 billion over three years to enhance its cloud computing and AI capabilities.
Quark’s Success Boosts Alibaba’s AI Prospects
Alibaba’s newly launched AI assistant, Quark, is gaining traction on Chinese social media, with positive reviews boosting its potential as a breakthrough application in the AI agent space. Competing with AI tools like Butterfly Effect’s Manus and OpenAI’s Deep Research, Quark has been transformed into a comprehensive AI assistant. Powered by Alibaba’s Qwen reasoning model, the revamped Quark now caters to general users, moving beyond its previous role as a search and cloud-storage tool.
Notably, Alibaba’s Qwen, its suite of large language models, has emerged as a market leader in China. In a major endorsement, Apple (AAPL) has selected Qwen to power AI functions on iPhones sold in the country.
Additionally, Alibaba made headlines earlier this month with its new open-source AI model, QwQ-32B, directly challenging DeepSeek’s R1. Qwen claims QwQ-32B matches R1’s output using just 5% of the parameters, showcasing its efficiency and innovation.
What Is the Price Target for BABA?
On TipRanks, BABA stock has a Strong Buy consensus rating based on 16 unanimous Buys assigned in the last three months. At $165.61, the Alibaba share price target implies a growth rate of 12.2% on the current trading price.
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