Alibaba ( BABA 3.30%) stock jumped more than 7% in early trading on the NYSE Friday, before turning tail and giving back nearly half its gains. As of 11:05 a.m. ET, shares of the Chinese e-commerce and technology giant are still up 4.1%. The question now is:

Alibaba stock is higher Wednesday after the Chinese conglomerate said its updated AI model outperforms DeepSeek and other competitors. Here's what to know.

Shares of Alibaba Group ( BABA 3.12%) rose 16.6% in January 2025, according to data from S&P Global Market Intelligence. The China-based e-commerce and cloud computing giant soared on the same news that drove Nvidia ( NVDA 0.90%) shares nearly 11% lower last month: the introduction of a new artificial intelligence (AI) system called DeepSeek.