BABA Releases AI Model: Should you Buy the Stock?

Core Viewpoint - The emergence of DeepSeek, a Chinese AI startup, has significantly impacted the AI landscape, leading to a sell-off in AI-related stocks on Wall Street, particularly affecting major players like Nvidia [1] Group 1: DeepSeek's Impact - DeepSeek claims to have developed a large language model on a budget of approximately $6 million, which has led to skepticism about its validity [1] - The company's model has gained recognition, reaching number one on the Apple app store, showcasing its potential despite doubts [1] - Nvidia experienced a historic market cap loss of$560 billion in a single day, attributed to the market's reaction to DeepSeek's claims [1] Group 2: Alibaba's New AI Model - Alibaba has introduced a new large language model, Qwen2.5-Max, which claims to outperform DeepSeek, ChatGPT, and Meta's Lama across various metrics [2] - The rapid advancements in AI technology are exemplified by the competition between DeepSeek and Alibaba [2] Group 3: Investment Thesis for Alibaba - Alibaba's current valuation is at a historically low level, with a P/E ratio of 12.94x compared to Amazon's 50x, making it an attractive investment opportunity [3] - The company is expected to see a rebound in earnings from 2024, driven by a recovering Chinese economy, new AI innovations, and fiscal stimulus [4] - Alibaba is expanding its market reach beyond China, targeting global markets such as Spain and Southeast Asia, which could enhance its growth prospects [4] Group 4: Technical Analysis of Alibaba - Alibaba shares are showing bullish technical patterns, with increased volume turnover indicating strong demand for its stock [6] - If the results of Qwen hold up, Alibaba could establish itself as a leading player in the AI sector [8]