Alibaba Group Holding Limited (NYSE:BABA) Claims New AI Translation Tool Outperforms Google, DeepL, and ChatGPT, Revolutionizing Global E-Commerce
We recently compiled a list of the 15 AI News Investors Should Not Miss. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against the other AI news investors should not miss.
According to Ark Invest, an investment manager focused on disruptive technologies, artificial intelligence breakthroughs are expected to increase the share of the global equity market associated with disruptive innovation from 16% to 60% by 2030. With inflation transitioning to deflation in several sectors, the firm believes that five innovation platforms, namely robotics, energy storage, AI, blockchain, and multi-OMIC (biological analysis) sequencing will be profoundly impacting macroeconomic metrics over the next few years.
“Interest rates are likely to surprise on the low side of expectations, broadening the equity rally from a narrow subset of stocks and reinforcing the need for diversified AI investments.” -Catherine Wood, CEO and CIO
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
One of the firm's ETFs with the investment theme of next-generation internet outperformed broad-based global equity indices in the third quarter, benefiting from its holdings in companies involved in innovative technologies. The year-to-date performance of the fund is 16.81%, outperforming its category by 1.59 percentage points year-to-date.
In light of this trend, joining CNBC’s “The Exchange”, technology reporter Kate Rooney revealed how Wall Street is trying to cash in on the AI craze using AI itself. According to Rooney, the new world of generative AI is starting an “arms race for hedge funds”. Modern versions of AI today are better than human traders in ways more than one. They learn from mistakes and get smarter along the way, and they ultimately require minimal human intervention. Combining this with the rise of OpenAI and Anthropic, these “off-the-shelf” models tend to be cheaper.
Moreover, while human traders may be capable, they often succumb to emotions and tend to make mistakes. This is why Intelligent Alpha CEO Doug Clinton believes that a “lack of emotion” is actually the edge or “superpower” of AI. That said, the program revealed how hedge funds are now looking into AI to “get ahead of the markets”, where their use of AI will ultimately help them improve decision-making in the field. Companies like OpenAI and Anthropic, which have raised significant capital along the way, ultimately need enterprise clients to scale, and Wall Street is an ideal fit due to its reliance on data and analysis.
Intelligent Alpha has launched a first-of-its-kind ETF named after famed stock trader Jesse Livermore. The ETF uses OpenAI’s ChatGPT, Anthropic’s Claude, and Google’s Gemini to construct a global equity portfolio. As per Clinton, firms that get on board with AI could gain an edge with a price tag of millions of dollars.
“What it does is it adds some intelligence to indexes, which are just definitionally sort of a set of rules that can’t be smart. And they also take that emotion out of the active side where human beings are still making decisions, but we get caught up. You know, we make mistakes and sometimes those compound. And so I think by fixing those two issues, AI has the potential to really capture a lot of value in terms of assets flowing to these new AI-powered funds.” - Intelligent Alpha CEO
Read more about these developments by accessing 10 Unsexy AI Stocks According to Goldman Sachs and 10 Buzzing AI Stocks According to Goldman Sachs.
Methodology
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 91
Branded under the name Alibaba, Alibaba Group Holding Limited (NYSE:BABA) is a Chinese multinational technology company that initially began as an e-commerce operator but has slowly expanded into industries such as fintech, cloud computing, logistics, entertainment, and local services. The company leverages artificial intelligence in its business operations, including its virtual assistant AliMe and advanced AI algorithms, to analyze customer data and enhance personalization.
On Wednesday, Alibaba Group Holding Limited (NYSE:BABA) launched an updated version of its artificial intelligence-powered translation tool. According to the company, it is “better than products offered by Google, DeepL, and ChatGPT”. This is based on an assessment by Alibaba International’s new model, Marco MT, by translation benchmark framework Flores. The translation tool is based on Alibaba’s own model called Qwen, and supports 15 languages. The AI translation product by Alibaba’s fast-growing international unit was released a year ago and already has around 500,000 merchant users.
Speaking with Annabelle Droulers on "Bloomberg: the China Show", Alibaba International VP noted how translation is the bread and butter of their global e-commerce operations since one has to translate their product listing into different languages if they want to build a global operation.
“We just updated our translation infrastructure with large language model. Previously, it was based on the original generation or previous generation of machine learning algorithms, but now we have completely revamped it based on our own language model and we’re happy to report that we are actually achieving over performance”.
Alibaba’s international business, including platforms such as AliExpress and Lazada, reported sales growth of 32% in the quarter ended June. On Tuesday, October 15, Barclay’s analyst Jiong Shao maintained the stock at “Overweight” and raised the price target to $137 from $107. The firm expects Alibaba to deliver “broadly in-line” Q3 results.
Overall BABA ranks 6th on our list of AI news investors shouldn't miss. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BABA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.