Alibaba (BABA), the Chinese technology giant, saw its Hong Kong-listed shares (HK:9988) surge over 8% today. The jump followed the announcement of the company’s new open-source artificial intelligence (AI) model, Qwen-32B, designed to compete with DeepSeek’s R1 model.
Alibaba’s AI unit, Qwen, revealed the QwQ-32B model in an X post earlier today. The company touted that the model used only 5% of the parameters of DeepSeek’s R1 model while delivering comparable performance. Investors responded positively, driving the share price up. At the time of writing, BABA stock was also up 3.6% in pre-market trading on the NYSE.
This news comes on the heels of a rally in major Chinese tech stocks yesterday, including Alibaba’s, spurred by China’s increased support for its AI, humanoid, and 6G telecom industries. The shift in the government’s embrace of AI is having a considerable impact on the tech sector. Governments are increasingly adopting AI models within their agencies to enhance operational efficiency.
Qwen-32B: A Leaner, More Efficient AI Model
Alibaba’s new model, Qwen-32B, utilizes only 32 billion parameters, a dramatic difference compared to the 671 billion parameters of the R1 model. AI models use parameters during the training phase to process vast datasets. These parameters significantly influence a model’s behavior and its capability to generate accurate responses.
Despite using far fewer parameters, the QwQ-32B model reportedly delivers performance on par with the R1 model. The new model is accessible on Alibaba’s Qwen Chat application, where users can select from various models, including the advanced Qwen2.5-Max model. The QwQ-32B model demonstrated strong performance in benchmark tests, including math reasoning, coding, and general problem-solving.
Alibaba also stated that QwQ-32B’s performance was comparable to well-known models like OpenAI’s o1 mini and DeepSeek’s R1. The company’s aggressive investment strategy indicates its commitment to becoming a leader in this rapidly evolving field. Alibaba is positioned as one of the foremost beneficiaries of AI advancements in China. The company plans to invest $52 billion in AI infrastructure over the next three years, representing one of the largest investments in the nation.
Is BABA a Good Stock to Buy Now?
Alibaba has emerged from a period of tough regulatory scrutiny. Having overcome those challenges BABA stock has increased over 66% so far in 2025, as investors recognize the significant growth potential of this e-commerce giant. Analysts are highly optimistic about Alibaba’s stock trajectory as well.
According to TipRanks, BABA stock has a Strong Buy consensus rating based on 15 unanimous Buy ratings. The average Alibaba stock price target is $165.31, implying a 17.2% upside potential from current levels.
