Alibaba or Amazon: Which Stock Stands to Win the AI and E-Commerce Race?

Artificial intelligence (AI) is fueling the next wave of growth in cloud computing and retail, and two global giants— Alibaba (BABA) and Amazon (AMZN)—are leading the charge. With Alibaba investing a massive $53 billion into AI and cloud infrastructure over the next three years and Amazon committing tens of billions to expand its data centers and generative AI services, both are doubling down on technology. But which stock offers more upside today? Let’s dive into the details.

Alibaba is a major Chinese e-commerce and cloud company that also operates in digital payments and logistics. The stock has surged about 36% year-to-date. Yet, even after this strong rally, Alibaba still looks reasonably priced, trading at a much lower earnings multiple (about 15x) than global tech and e-commerce giants like Amazon.

The company recently announced a $53 billion plan to boost its AI and cloud business over the next three years. Its earlier investments in these areas are already paying off, as seen in the strong cloud growth last quarter. In the Q4 FY25 earnings call, cloud revenue jumped 18% year-over-year to RMB30.1 billion, supported by robust growth in AI-related product sales. While the company didn’t specify its AI revenue, it said that AI-related product revenue saw triple-digit growth for the seventh consecutive quarter. Also, Alibaba’s core e-commerce platforms showed strength, with Taobao and Tmall Group (TTG) revenue increasing 9% year-over-year.

That said, some caution is still warranted, as U.S.-China trade tensions and regulatory pressures at home could limit Alibaba’s ability to expand as aggressively as it hopes. Still, with a relatively low valuation and rising strength in AI and global e-commerce, Alibaba stock looks attractive to many investors at current levels.

Amazon is a global leader in e-commerce, cloud computing, digital ads, and AI services. The stock has declined around 3% so far this year due to earlier pressure linked to tariffs and market volatility. While it trades at a higher valuation, about 35 times forward earnings, many investors still see value in its strong growth and market dominance.

One of Amazon’s biggest strengths is its cloud arm, Amazon Web Services (AWS), which brought in $29.3 billion in first-quarter revenue, up 17% from a year ago. The company is also making a major push in artificial intelligence, with plans to spend over $100 billion this year on data centers and custom AI chips. Alongside this, its advertising business grew 19% in Q1, and faster Prime deliveries boosted its e-commerce segment.

Still, there are some risks to consider. Rising spending could affect near-term profits, and AWS growth has slowed slightly in recent quarters. Soft guidance for Q2 also raised some concerns. In addition, trade issues and growing competition in tech remain a challenge. Even so, most analysts remain bullish, with about 98% rating the stock a Buy, thanks to Amazon’s size, scale, and continued investment in long-term growth.

Using TipRanks’ Stock Comparison Tool, we compared Alibaba and Amazon to see which e-commerce stock analysts favor. Currently, Alibaba stock holds a “Strong Buy” consensus rating from Wall Street, along with a “Perfect 10” Smart Score on TipRanks. It also offers a 46.27% upside potential, higher than Amazon’s. In comparison, Amazon stock also carries a “Strong Buy” consensus rating, with analysts projecting a 13.70% upside from current levels.