Why Alibaba Stock Trounced the Market Today

News of a fresh product release in a white-hot segment of the tech industry drew investors to Alibaba Group (NYSE: BABA) stock on Thursday. They ultimately ended up driving the Chinese tech giant's stock almost 3% higher in price, during a trading session that saw the benchmark S&P 500 (SNPINDEX: ^GSPC) close 0.3% lower.

An intelligent move

That day, Alibaba's Cloud unit launched the latest artificial intelligence (AI) model in its Qwen series. The somewhat awkwardly named Qwen2.5-Omni-7B is multimodal, meaning it can digest various types of inputs comprising text, video, images, audio, and others.

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Alibaba has made Qwen2.5 open-source. It is available on several platforms, including Alibaba Cloud's ModelScope open-source community, and GitHub. The company didn't hesitate to point out that this is habitual, as it has released more than 200 AI models as open-source offerings.

Qwen2.5's maker lavished praise on the new model. In Alibaba Cloud's announcement, the company wrote that it "delivers uncompromised performance and powerful multimodal capabilities."

"This unique combination makes it the perfect foundation for developing agile, cost-effective AI agents that deliver tangible value, especially intelligent voice applications," Alibaba added.

Fever pitch

AI development in China has been especially feverish since the January release of domestic start-up company DeepSeek's R1 model. According to many users, the output produced by R1 is comparable to those from some of the top AI developers around the world, leading to something of a scramble to build a better (and, crucially, more cost-effective) mousetrap.

Given that, investors should monitor the reaction from AI professionals about Qwen2.5's capabilities. If it works as hyped, it should keep Alibaba competitive in the Great AI Race.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.