Nvidia may have been the AI darling in recent years, but Alibaba Group Holding Ltd (NYSE: BABA) is currently a better pick to bet on a continued momentum in artificial intelligence, says EMJ Capital founder Eric Jackson.
Jackson’s remarks arrive as BABA warms up to launching “Qwen 3” by the end of April, as per sources that spoke with Bloomberg on the condition of anonymity.
Qwen is the series of Alibaba’s flagship AI models.
Alibaba stock may still be undervalued
Alibaba stock has rallied more than 60% since the start of 2025. Still, EMJ’s founder Eric Jackson remains positive on BABA as he continues to see it as “very undervalued”.
He recently sold NVDA to load up on Alibaba stock since it could “surprise people with a DeepSeek, Alipay, or Ant Financial kind of an announcement” this year, the market veteran told CNBC today.
Jackson likes the Chinese e-commerce and tech behemoth also for the strength of its financials. In February, BABA reported earnings for its third quarter that handily topped Street estimates.
More importantly, the AI stock currently pays a dividend yield of 1.51%, which makes it all the more exciting to own ahead of a potential recession.
BABA shares are insulated from Trump’s tariffs
Investors should be pounding the table on Alibaba stock at writing because, on top of an incredible AI play, it’s a “great way to avoid the tariff tantrum” as well, according to Quint Tatro of Joule Financial.
BABA is minimally exposed to tariffs as it generates as much as 90% of its revenue from China.
The US makes up less than 5% of its sales annually, Tatro said in a recent CNBC interview, adding, “they’ll really be isolated from any tariff talk.”
The Chinese giant plans on spending more than $50 billion on AI over the next three years, which may help unlock significant further upside in its share price, he added.
Versus their 52-week low, Alibaba shares are up some 85% at the time of writing.
How fast is Alibaba’s AI revenue growing?
Alibaba has seen triple-digit growth in its AI revenue over the past six quarters.
In its latest earnings release, Eddie Wu, the company’s chief executive, told investors:
This quarter’s results demonstrated substantial progress in our user first, AI-driven strategies and the reaccelerated growth of our core businesses.
At the time, BABA also said AI would further accelerate revenue growth at its Cloud Intelligence Group through the remainder of 2025.
Following the news of an upgraded AI model coming soon, analysts at Mizuho also raised their price target on Alibaba shares to $170 this week, which translates to about a 35% upside from current levels.
All in all, while BABA stock has rallied hard in recent months, experts seem to be keeping bullish, calling for further upside in it as we advance through this year.
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