Alibaba Group Holdings (BABA) Stock: Slides 1.89% as Qwen 3.5 AI Model Claims Edge Over U.S. Rivals

TLDR

• Alibaba’s Qwen 3.5 boosts efficiency and cuts costs in AI.
• Qwen 3.5 upgrades AI with visual capabilities and better performance.
• Alibaba intensifies AI race against ByteDance’s Doubao and DeepSeek.
• Qwen 3.5 beats rivals like GPT-5.2 in AI performance benchmarks.
• Despite stock drop, Alibaba’s AI strategy drives market share defense

Alibaba Group Holding Limited (BABA) declined 1.89% to close at $155.73 on February 13, 2026. The drop came as the company introduced Qwen 3.5, its latest artificial intelligence model. The release signals a stronger push into advanced AI despite pressure on the stock.

Alibaba Group Holding Limited, BABA

Alibaba Expands AI Push With Qwen 3.5 Upgrade

Alibaba Group Holding Limited introduced Qwen 3.5 as an upgraded flagship artificial intelligence model. The company said the system executes complex multistep tasks independently and improves efficiency. It also reported major gains in cost and processing performance.

According to the company, Qwen 3.5 operates 60% cheaper than its predecessor. It processes heavy workloads eight times more efficiently. In addition, it supports visual agentic capabilities across mobile and desktop applications.

Alibaba released an open-source version alongside the primary model. This approach allows developers to modify the system for custom use cases. The strategy strengthens Alibaba’s position in China’s competitive AI market.

Competition Intensifies Against ByteDance and DeepSeek

Alibaba aims to expand the reach of its Qwen chatbot application in China. However, ByteDance currently dominates the domestic chatbot segment through Doubao. DeepSeek also remains a key competitor after gaining global recognition last year.

ByteDance recently launched Doubao 2.0, upgrading its chatbot platform. The application reportedly serves nearly 200 million users. The update positions Doubao for broader adoption in agent-based AI services.

DeepSeek triggered significant market volatility last year after its rapid expansion. Alibaba responded at that time with Qwen 2.5-Max to counter momentum. DeepSeek is now preparing a next-generation model expected within days.

Benchmark Claims and Global Positioning

Alibaba compared Qwen 3.5 against leading U.S. systems on performance benchmarks. The company stated that the model exceeded prior internal versions and major American rivals. Comparisons included GPT-5.2, Claude Opus 4.5, and Gemini 3 Pro.

The announcement followed half-day trading in Hong Kong due to Lunar New Year’s Eve. Shares slipped in Hong Kong and did not trade in the United States during Presidents Day. Meanwhile, software stocks have faced pressure from rapid advances in generative coding tools.

Geopolitical developments also influenced sentiment around Chinese technology firms. The Pentagon recently published and then withdrew an updated list referencing Chinese military-linked companies. Although Alibaba did not address the issue, U.S. adoption of Chinese AI remains limited.

Alibaba continues expanding artificial intelligence across commerce and enterprise platforms. Earlier this month, a coupon campaign inside the Qwen chatbot increased active users sevenfold. Despite technical issues, the promotion strengthened traffic and engagement.

The rollout of Qwen 3.5 reflects Alibaba’s broader technology strategy. The company integrates AI into cloud services and retail operations. As competition intensifies, Alibaba advances cost efficiency and enterprise-focused capabilities to defend market share.

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