AlibabaBABA has unveiled Qwen3.8-Max, its latest flagship Large Language Model, intensifying the AI race between Chinese and U.S. peers including OpenAI, AlphabetGOOGL, Meta PlatformsMETA and Anthropic. Per Bloomberg, which cited Jing Daily, Alibaba claims that the 2.4-trillion-parameter mixture-of-experts (MoE) model outperforms several leading Chinese rivals (like Moonshot AI’s Kimi K3) and delivers performance approaching top-tier U.S. models from Anthropic and OpenAI on multiple coding, reasoning and multimodal benchmarks.
Alibaba’s launch of Qwen3.8-Max strengthens its AI footprint. The company has emphasized that AI has moved beyond the investment phase into large-scale commercialization, with Qwen serving as the core proprietary model powering Alibaba’s rapidly expanding AI ecosystem. The company stated that most of its Model-as-a-Service (MaaS) revenue is generated by proprietary models, including Qwen, highlighting the model family’s central role in monetizing AI through enterprise APIs and cloud services.
Qwen3.8-Max is expected to enhance Alibaba’s modeling capabilities and will enable the company to support increasingly complex enterprise workloads. Qwen3.8-Max supports long-context processing, multimodal inputs, structured outputs and agentic workflows, making it suitable for software development, research automation and enterprise productivity. BABA has acknowledged that customers are shifting from conversational chatbots to AI agents capable of solving sophisticated tasks, resulting in rapid growth in training, inference and agent orchestration workloads.
Alibaba also plans to release the model as open weights, allowing developers to download and customize it. Open-weight frontier models reduce barriers for enterprises and startups, enabling them to build advanced AI applications without relying solely on proprietary U.S. APIs. This is expected to accelerate innovation globally while putting pricing pressure on commercial AI services offered by OpenAI, Anthropic and Alphabet’s Google.
The new flagship model also reinforces Alibaba Cloud’s competitive position. The company expects AI-related products to become the primary growth engine for Cloud Intelligence Group, with AI revenue already accounting for 30% of external cloud revenue and expected to exceed 50% roughly within a year. A higher-performing Qwen3.8-Max should attract more developers and enterprises to Alibaba’s cloud ecosystem, driving greater utilization of its MaaS platform, expanding annual recurring revenue and supporting higher-margin AI services.
BABA Faces Stiff Competition in AI Space
Alibaba is facing stiff competition from the likes of Meta and Alphabet in the AI space.
Meta is aggressively investing across foundation models, AI infrastructure, consumer applications and enterprise AI services. Meta has highlighted that AI is already improving engagement across Facebook, Instagram and WhatsApp, enhancing ad targeting and opening new revenue streams through personal agents, business agents and enterprise APIs. The company has also rolled out Muse Spark models, AI-powered creative tools, Meta One subscriptions and AI Glasses while expanding business agents to more than one million businesses. These initiatives, combined with massive investments in data centers and compute infrastructure, strengthen Meta’s AI ecosystem and intensify competition with Alibaba's Qwen models, Cloud Intelligence and enterprise AI offerings.
Alphabet challenges Alibaba through its rapidly expanding Gemini AI ecosystem and leadership in cloud AI. AI is driving growth across Search, YouTube and Google Cloud, with Gemini models processing approximately 22 billion API tokens per minute, nearly 90% of Fortune 100 companies using Gemini Enterprise and Google Cloud revenue surging 82% year over year in the second quarter of 2026. Alphabet continues to strengthen its competitive position with AI Overviews, AI Mode, Gemini Enterprise, agentic AI platform Antigravity, cybersecurity offerings and industry-leading AI infrastructure spanning TPUs, GPUs and cloud services. Google Cloud’s huge AI backlog of $514 billion and strong enterprise adoption across multiple industries is a key catalyst for Alphabet.
BABA shares have plunged 16.6% in the year-to-date period, underperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s appreciation of 9% and 5.9%, respectively.
BABA’s YTD Price Performance
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Image Source: Zacks Investment Research
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BABA has a Value Score of C, which suggests stretched valuation.Â
However, BABA stock is currently trading at a forward 12-month Price/Earnings of 15.61X compared with Meta’s 16.49X and Alphabet’s 20.82X.
Valuation: BABA vs. META
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Image Source: Zacks Investment Research
Valuation: BABA vs. GOOGL
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Image Source: Zacks Investment Research
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The Zacks Consensus Estimate for fiscal 2027 earnings is pegged at $6.91 per share, down 4.8% over the past 30 days, indicating a 77.63% jump over the figure reported in fiscal 2026.
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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