Alibaba Stock Pops on AI Model Performance Claims

Big Tech sold off on Monday after reports that Chinese startup DeepSeek created an artificial intelligence (AI) model that outperformed OpenAI's at a substantially lower cost. Now, Alibaba Group Holding Ltd (NYSE:BABA) is joining the race, claiming its own AI model Qwen 2.5 surpassed DeepSeek-V3.

Options traders are blasting the security in response, with 740,000 calls and 150,000 puts exchanged so far -- five times the overall volume typically seen at this point. Most popular is the weekly 1/31 100-strike call, where new positions are being opened.

Options bulls were targeting the stock before today, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BABA's 50-day call/put volume ratio of 8.66 ranks in the 99th annual percentile. This suggests that calls have been much more popular than usual of late.

BABA was last seen up 2.2% at $98.10 at last glance -- its highest level since October. The security is on track for its seventh win in the last eight days and fourth-straight pop, after yesterday securing its best daily percentage gain since Dec. 9. Plus, BABA sports a 36.2% year-over-year lead.