Elon Musk recently said that Grok 5, the next version of his chatbot, will be the closest thing yet to artificial general intelligence (AGI). His words highlight the way many in the U.S. still see the future of AI. They believe the next step is not just better tools, but machines that can think at a human level. The race to build this kind of AI is fierce, with firms like OpenAI, Alphabet GOOG +0.55% ▲ , Meta Platforms META -1.65% ▼ , and others spending at a record pace. Analysts estimate that the big tech companies will spend between $344 billion and $400 billion in 2025 on data centers, talent, and research.

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However, according to The Wall Street Journal, China is running a different race.

America Bets on AGI

In the U.S., AGI has become the main prize. Supporters say it could bring military advantages, open new ways to treat disease, and even help tackle climate change. Some researchers think superintelligent systems may arrive as soon as 2027. The sums of money being spent show how high the stakes have become. A congressional panel has even raised the idea of a “Manhattan Project” for AI to ensure the U.S. stays ahead.

Still, risks are mounting. The release of GPT-5 by OpenAI last month was meant to be a big step toward AGI. Instead, it left many users underwhelmed. Chief executive Sam Altman admitted the rollout was rough and has tried to cool down expectations. Other tech leaders have also started to pull back from bold forecasts. As more money pours into the sector, some investors are asking if the chase for AGI is becoming a bubble.

China favors applications

China, by contrast, is pushing AI that works in the here and now. President Xi Jinping has urged the industry to build tools that can improve efficiency and be put to use right away. To accelerate progress, the Chinese central government set up an $8.4 billion fund in January, while local authorities and banks rolled out their own programs. Cities have also published development plans under the “AI+” banner, meant to weave AI into daily life and industry.

This pragmatic drive is already visible. State media say Chinese AI models are grading school exams, advising farmers on crops, and helping police respond to cases. Tsinghua University is building an AI-assisted hospital where doctors will work with virtual colleagues. Factories are using intelligent robots to inspect textiles and assemble cars. The city of Xiong’an has even introduced a local AI model to help farmers with pest control and to improve weather reports.

For China, part of this path is shaped by limits. U.S. export rules make it hard to get the top semiconductors needed to train extensive models. As a result, China has placed a greater emphasis on smaller data centers and open-source tools. The strategy is to spread AI broadly and make it cheaper to adopt, even beyond its borders. One important note is that despite China’s focus on practical uses of AI, Alibaba BABA +12.90% ▲ , the giant e-commerce company, has stated it will eventually pursue AGI.

Which path wins?

The United States and China are placing very different bets. The U.S. is focused on a long-term vision of machines that could one day match human thought. China is concentrating on near-term tools that raise efficiency and support entire industries. The U.S. risks pouring vast sums into a goal that may take far longer than expected. China risks being left behind if a breakthrough in general intelligence does arrive. At this stage, both strategies carry weight, and only time will show which path delivers the greater payoff.

By using TipRanks’ Comparison Tool, we’ve stacked some of the larger AI companies, both American and Chinese, side by side to gain a broader view of each stock.

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E-commerce giant Alibaba’s BABA +12.90% ▲ latest Q1 FY26 earnings report reignited optimism in China’s tech sector. The company’s strong AI progress and better-than-expected cloud results sent the stock up nearly 19%, adding over $50 billion in market value. The rally lifted peers like Baidu BIDU +4.76% ▲ and Tencent TCEHY +0.90% ▲ as investors returned to Chinese AI names.

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What Drove Alibaba’s Rally?

Alibaba posted triple-digit growth in AI-related product revenue and a 26% jump in cloud sales, the segment most closely tied to AI demand. These gains helped offset concerns about slowing growth in e-commerce and rising competition in food delivery.

The results showed that Alibaba is moving beyond retail and is now a core player in China’s AI and cloud race.

The stock’s nearly 19% rise marked its biggest one-day rally since November 2022, with turnover hitting record highs in Hong Kong. The surge gave a much-needed boost to investor sentiment across the broader sector, with Baidu and Tencent also posting solid gains.

Can AI Momentum Last?

Analysts welcomed the results, with Morgan Stanley calling Alibaba “China’s best AI enabler thesis.” The firm highlighted Alibaba’s strong cloud business and AI push as key drivers for future growth.

Still, investors will be watching to see if demand stays strong and if BABA can turn its AI investments into steady profits. The push into quick commerce also continues to weigh on margins, leaving some investors cautious about near-term earnings.

Nevertheless, for now, Alibaba’s strong AI and cloud growth has overshadowed those worries.

Is Alibaba Stock a Good Buy Right Now? 

Analysts remain bullish about Alibaba’s stock trajectory. With 12 Buy ratings and one Hold rating, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $152.63 implies about 13.06% upside potential from current levels.

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Alibaba’s (NYSE:BABA) June quarter results might have missed the estimates but that mattered little to investors who sent shares surging by 13% last Friday.

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In its fiscal first quarter, the Chinese tech giant reported revenue of $34.57 billion, up 2% year-over-year, falling short expectations by $910 million. That said, on a like-for-like basis – excluding Sun Art and Intime, which were sold – revenue would have grown by 10%. At the other end of the spectrum, adj. EPADS came in at $2.06, missing the forecast by $0.10. Pressure on adj. profit in Alibaba’s core e-commerce segment came as a result of heavy investment in China’s “quick commerce” market.

Meanwhile, the cloud business saw faster growth; Alicloud revenue rose by 25.8% in Q1, up from 17.7% in Q4, and for the first time, Alibaba said that AI-driven revenue made up more than 20% of external Cloud revenue.

Strong cloud growth aside, on the face of it, the quarter’s performance appears somewhat lackluster. Indeed, Bernstein analyst Robin Zhu says the quarter was “mediocre.” However, it is well-known the stock market is a forward-looking beast, and with this in mind, Zhu thinks the quarter has “already been consigned to irrelevance, on the back of a game-changing analyst call.”

“For a company not always known for guiding concisely, this quarter felt like directional change,” Zhu went on to say. “The plan going forward is clear: leverage food delivery, quick commerce, and AI to drive engagement across the company’s vast ecosystem.”

Although July and August involved significant spending on acquiring users and riders, an outlook that stated losses in the food delivery unit could be cut in half by October was “far more constructive” than Zhu expected, suggesting Q2 will likely mark the peak in losses – even though they will have doubled compared with Q1. Alibaba’s ambition to become China’s top player in food delivery and quick commerce is a clear challenge to Meituan, especially coming just two days after Meituan struggled to outline how it intends to deal with the threat. Recent trends indicate that Alibaba has been able to gain substantial food delivery and quick commerce share while only modestly increasing spending relative to Meituan.

On the AI front, management highlighted the RMB38.7 billion ($5.42 billion) in capex this quarter as a sign of robust demand for both inference and training, and indicated they expect revenue growth to continue accelerating in the coming quarters. “Looking back,” Zhu explained, “our upgrade of Alibaba’s shares earlier this year during peak DeepSeek excitement was poorly timed. But our belief at the time – that AI investments would help steer Alibaba towards more gainful capital allocation – now appears to be taking shape.”

Bottom line, Zhu maintained an Outperform (i.e., Buy) rating on BABA shares and raised his price target from $145 to $160, implying the stock will gain 18.5% in the months ahead. (To watch Zhu’s track record, click here)

There’s strong support elsewhere on the Street for BABA; based on a mix of 12 Buys vs. 1 Hold, the stock claims a Strong Buy consensus rating. At $152.63, the average target factors in a one-year gain of 13%. (See Alibaba stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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Alibaba stock BABA +12.90% ▲ , the Chinese e-commerce giant, surged today, and investors are pretty stoked. The jump was not about one single headline but a mix of strong results, big moves in artificial intelligence, new backing from Wall Street, and heavy institutional buying. Together, these factors pushed BABA shares sharply higher.

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Alibaba Surprises on AI and Cloud Growth

Alibaba’s latest results showed how much its business is changing. Revenue from artificial intelligence surged, and its cloud division grew 26% compared with a year ago. This beat expectations and gave investors confidence that Alibaba is no longer just an e-commerce company.

For years, Alibaba was seen mainly as an online retail giant. Now the company is proving that its shift into AI and cloud computing has real momentum. This helped send its Hong Kong shares up nearly 19%, one of the biggest one-day gains in its history. U.S.-listed shares followed, rising about 13% to trade around $135.

Alibaba Develops Its Own AI Chip

The company also announced it has developed its own advanced AI chip. This was a big deal because it reduces Alibaba’s dependence on U.S. suppliers like Nvidia NVDA -3.32% ▼ , especially at a time when trade restrictions remain tense.

By building its own chips, Alibaba shows it is serious about controlling its future in AI. Investors saw this as proof that the company is committed to staying competitive in the global tech race. It also strengthens Alibaba’s position inside China, where demand for AI infrastructure is exploding.

JPMorgan Raises Its Target

The positive news caught the attention of Wall Street analysts. JPMorgan’s Alex Yao raised his price target on Alibaba stock from $140 to $170 and kept its “Overweight” rating. This type of upgrade often signals to big investors that there is still room for shares to run.

Analysts pointed to growth in both cloud and AI as the main drivers. They believe the momentum could keep pushing Alibaba stock higher, especially if more global funds start rotating back into Chinese tech.

Big Investors Add More Shares

Institutional buying gave the rally even more fuel. Reports show that major firms like Goldman Sachs GS -0.26% ▼ , Mirae Asset, and Ieq Capital all raised their positions in Alibaba. When large funds increase exposure, it often boosts confidence across the market.

The steady inflow of institutional money suggests that investors with long time horizons see value in the stock, even after its big moves. That kind of support can help keep a rally going.

The move shows how quickly sentiment can shift when a company proves it is executing on growth stories that matter. For Alibaba, this means convincing the market that it is just as much a tech innovator as it is a retail powerhouse.

Is Alibaba Stock a Good Buy?

Turning to TipRanks, Wall Street is lining up behind Alibaba stock. Out of 13 analysts who rated the company in the past three months, 12 call it a Buy and just one calls it a Hold. None recommend selling.

The average 12-month BABA price target sits at $152.63, which is about 13% higher than the latest share price of $135.

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European food giant Nestlé NSRGY +0.90% ▲ has fired CEO Laurent Freixe after a code of conduct breach and named Philipp Navratil as his successor.

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Nestlé said Freixe’s departure follows an investigation overseen by Board Chair Paul Bulcke into an undisclosed romantic relationship with a subordinate of Freixe. The company said the relationship violated its established code of business conduct.

“This was a necessary decision,” said Nestlé in a written statement, adding “Nestlé’s values and governance are strong foundations of our company.” Navratil becomes the third CEO of Nestlé in a year. Freixe, who was a longtime company insider, took over the CEO role in September 2024 after Nestlé ousted his predecessor Mark Schneider.

Headwinds

Navratil began his career with Nestlé in 2001 as an auditor. After holding various roles in Central America, he was appointed country manager for Nestlé Honduras in 2009. Navratil assumed leadership of the coffee and beverage business in Mexico in 2013, and transitioned to Nestlé’s strategic coffee business unit in 2020.

Navratil later moved to Nestlé’s Nespresso unit in July 2024 and joined the Nestlé executive board at the start of this year. Based in Switzerland, Nestlé faces numerous issues, including U.S. import tariffs, record high prices for coffee and cocoa beans, and a slowdown in consumer spending. Nestlé products include everything from KitKat chocolate bars to Gerber baby food and Purina dog food.

Is NSRGY Stock a Buy?

Currently, only one U.S. analyst follows Nestlé’s stock. So instead, we’ll look at its three-month share price performance. As one can see in the chart below, NSRGY stock has declined 11.73% in the last 12 weeks.

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