We recently compiled a list of the 10 AI Stocks on Wall Street’s Radar Right Now. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against the other AI stocks.

The research preview of the latest GPT-4.5 model from ChatGPT creator OpenAI has been released. The preview, released for Pro users and developers worldwide, will also be expanded for access in the coming weeks. According to the company, it is their largest and best model for ChatGPT yet. It comes with an enhanced ability to recognize patterns, generate creative insights without reasoning, and also show greater emotional intelligence.

READ ALSO: 10 Buzzing AI Stocks Dominating Headlines and 10 AI Stocks Gaining Momentum Right Now

The company stated that early testing has shown that GPT-4.5 seems more natural. The model’s broader knowledge base, enhanced ability to follow user intent, and greater “EQ” allow it to be better at writing, programming, and solving practical problems. The company also expects it to hallucinate less than other models.

OpenAI is currently sharing the model as a research preview to better understand its strengths and limitations. CEO Sam Altman has deemed it "a giant, expensive model," revealing how the company ran out of GPU capacity to roll out to user tiers at the same time.

"We will add tens of thousands of GPUs next week ... this isn't how we want to operate, but it's hard to perfectly predict growth surges that lead to GPU shortages”.

-CEO Sam Altman

Tencent has also launched an AI model to compete in the AI race. According to Tencent, the model has the ability to answer queries faster than the famous DeepSeek's R1. Known as The Hunyuan Turbo S, the model can reply to queries within a second. This makes it unique from models such as the DeepSeek R1, Hunyuan T1, and other slow thinking models that need to 'think for a while before answering”.

Tests have further shown how Turbo S' capabilities have matched DeepSeek-V3 in fields like knowledge, math, and reasoning. The company has also highlighted the usage costs of the new model are many times cheaper than its previous iterations, signifying how DeepSeek's open-source and low-pricing strategy has led other leading companies to follow suit.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points  (see more details here).

An e-commerce platform displaying a wide range of products to customers online.

Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 107

Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally. On February 24, Citi analyst Alicia Yap maintained their bullish stance on the stock, giving a “Buy” rating. Several factors have led to the rating from Citi, particularly Alibaba Group Holding Limited (NYSE:BABA)’s strategic advancements in AI and the recent launch of the Qwen reasoning model, QwQ, on Qwen Chat.

This reasoning model not only highlights the company’s commitment to innovation in deep reasoning, but also underscores its announcement of a significant capital expenditure investment of RMB 380 bn over the next three years. This investment aims to capture AI opportunities more rapidly. Alibaba is further anticipated to maintain a competitive edge in the AI space through ongoing enhancements and future releases, which include the QwQ-Max version as well as smaller variants for local deployment.

Overall BABA ranks 5th on our list of AI stocks that are on Wall Street's radar right now. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BABA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.

 

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