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March 6 - Alibaba (BABA, Financial) shares soared after the Chinese tech giant unveiled its new AI reasoning model QwQ-32B, which it claims rivals DeepSeek-R1. Hong Kong-listed shares ended the session up about 8.4%, hitting a new 52-week high, while New York-trading stock rose roughly 2.5% in pre-market deals.
The model operates with 32 billion parameters compared to DeepSeek's 671 billion, with only 37 billion actively engaged during inference, a design aimed at achieving higher efficiency amid rising demand for optimized AI performance. Alibaba said QwQ-32B delivered impressive results, especially in math and coding tasks.
This announcement comes as Chinese tech firms intensify AI investments following DeepSeek's earlier breakthrough. Alibaba's Cloud Intelligence unit, which significantly boosted profits in the December quarter, is expected to drive further revenue growth, CEO Eddie Wu noted.
Bernstein analysts forecast that the optimism surrounding AI could set Alibaba's earnings on a more upwardly-pointing trajectory. The company's strategic conversion to a dual primary listing on the Hong Kong and New York Stock Exchanges has already contributed to a nearly 71% year-to-date gain in Hong Kong.
This article first appeared on GuruFocus.