Alibaba Group Holding (BABA) stock is scaling the price charts Wednesday after the Chinese e-commerce giant released a new version of its open-source artificial intelligence (AI) model, Qwen. BABA says this new version outperforms competitors, including the ultra-popular and industry-disrupting DeepSeek R1.
In a head-to-head comparison, Alibaba said Qwen 2.5-Max outperforms DeepSeek-V3, OpenAI's GPT-4o and Meta Platforms' (META) Llama 3.1 in major benchmarks, including Arena-Hard, LiveBench, LiveCodeBench and GPQA-Diamond. These criteria evaluate AI models for tasks such as reasoning, coding and general problem solving.
"The burst of DeepSeek V3 has attracted attention from the whole AI community to large-scale MoE models," Alibaba said in a post on X.
The company said its large-language model has been pretrained on "massive data" and "achieves competitive performance against the top-tier models."
Alibaba's updated version of Qwen comes just days after the release of DeepSeek R1, a cheap Chinese AI model, which quickly became the most-downloaded app on Apple's (AAPL) app store.
The release of DeepSeek R1 also caused several major U.S. tech stocks to sell off on Monday.
Is Alibaba stock a buy, sell or hold?
Alibaba shares rallied hard back in late September after the company released several AI models. More recently, the consumer discretionary stock has struggled and is down more than 13% since early October. But Wall Street remains overwhelmingly bullish on BABA.
According to S&P Global Market Intelligence, the average analyst target price for BABA stock is $120.94, representing implied upside of more than 20% to current levels. Additionally, the consensus recommendation is Buy.
However, not all of Wall Street is bullish on the large-cap stock. Financial services firm Argus Research, for example, has a Hold rating on Alibaba.
"BABA has underperformed in recent years due to increased competition, political pressures, and macroeconomic softness," wrote Argus Research analyst Jim Kelleher said in a November 18 note. This "combination of weak fundamentals and uncertain organizational strategy" is why Kelleher has a Hold rating on Alibaba.
