We recently published a list of 10 AI Stocks That Will Skyrocket. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against other AI stocks that will skyrocket.

AI (Artificial Intelligence) isn’t just a buzzword anymore—it’s becoming a part of our everyday lives, from the apps we use to how businesses operate. For investors, that means opportunity. As AI continues to grow, some companies are leading the charge and showing real potential for long-term gains. Whether you’re looking to diversify your portfolio or tap into the future of tech, this article will walk you through some of the best AI stocks worth watching right now. AI stocks saw incredible gains over the last couple of years, particularly in 2024, as AI applications burgeoned. The current weakness in AI stocks, caused by geopolitical tensions, may be a good opportunity to load up on AI stocks.

AI is Likely to Have a Myriad of Applications

In an interview with CNBC, the CEO and CIO of Ark Invest, Cathie Wood, underscored her bullishness on the AI sector despite the recent weakness in those stocks. According to Wood, AI has a massive runway. She compared the current AI position to the internet in the early to mid-90s. Wood is optimistic about robotaxis in the near term and the application of humanoid robots in the long term. However, the most under-appreciated application of AI, according to Wood, is healthcare, as AI will accelerate the curing of diseases. Within the medical application of AI, Cathie Wood is particularly bullish on sequencing technology, which is used to read DNA. AI is a great application in sequencing as it helps analyze, interpret, and act on that genetic data much quicker and more accurately than traditional methods.

A segment within AI that is hot right now is Generative AI. Generative AI creates customized answers for the user based on real underlying data. Gen AI has created a massive investment cycle of over $200 billion annually, led by the ‘magnificent 7’. The tech behemoths are competing intensely over leadership in Gen AI. Meanwhile, an upcoming AI theme centers on how large language models (LLMs). According to Morgan Stanley, leading companies behind the most advanced LLMs are prioritizing high-performance chips and top-tier software to deliver AI solutions that are becoming essential for both businesses and consumers. While initial LLM use cases primarily included content creation, summarization, and categorization, industry leaders believe that the greatest yet-to-be-realized opportunity lies in applying AI reasoning to enterprise data.

Our Methodology

To compile the list of AI stocks that will skyrocket, we reviewed AI ETFs to compile a preliminary list of stocks and then selected the ones with the highest upside potential based on Wall Street analysts’ average price targets. We have also mentioned the hedge fund sentiment around each stock, as of Q4 2024.

Note: All data was recorded on April 21, 2025.

At Insider Monkey, we are obsessed with 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)

Upside Potential: 52.54%

Number of Hedge Fund Holders: 107

Alibaba Group Holding Limited (NYSE:BABA) is an e-commerce and cloud giant that has deeply integrated AI across most of its business. It’s not just selling stuff online, it’s using AI to power how it does that at scale. Like Amazon, Alibaba uses AI to analyze user behavior and recommend products in real time. The Chinese company uses AI  heavily in logistics. The company’s smart warehouses use robotics and computer vision to sort and move packages. Alibaba’s cloud offers AI services like image recognition, speech recognition, natural language processing (NLP), and machine learning platforms. Alibaba also has its own LLMs like Tongyi Qianwen.

Alibaba Group Holding Limited (NYSE:BABA) has committed over $52 billion to AI and cloud computing infrastructure over the next three years. This move highlights the company’s ambition to lead in AI development.​Alibaba’s Qwen AI model is gaining major traction, with over 90,000 spin-off models created and 290,000+ users accessing its APIs via Alibaba Cloud. This has helped drive six straight quarters of triple-digit growth in AI-related revenue. Its AI tools are already seeing real-world success: the Accio B2B search engine hit 1 million users in five months, offering features like automated market analysis and advanced product sourcing, which support global business needs. Meanwhile, Ant Group, an Alibaba affiliate, is reducing AI training costs by mixing U.S. and Chinese chips — cutting computing costs by 20%.

Overall, BABA ranks 6th on our list of AI stocks that will skyrocket. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

 

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