Jim Cramer Speculates on Baidu's Potential After Alibaba's Success

Recently, the artificial intelligence (AI) sector has experienced some turbulence, prompting CNBC's Jim Cramer to speculate that Baidu Inc. (NASDAQ: BIDU) may be the next Chinese tech giant to capture market attention.

What Happened: Cramer shared his thoughts on X (formerly Twitter) on Thursday, stating, "First, it was DeepSeek, then it was BABA, and next, maybe Baidu?" His tweet reflects the rapidly evolving dynamics within the AI landscape.

His remarks coincided with a notable rise in shares of Alibaba Group Holding Ltd. (NYSE: BABA), which surged by 6.39%, closing at $102.91. This uptick is largely attributed to growing investor optimism surrounding Alibaba's Qwen 2.5-Max AI model. Reports indicate that this latest AI development has outperformed DeepSeek-V3 in several benchmarks, including Arena Hard, LiveBench, and GPQA-Diamond tests.

This market shift comes in the wake of a significant selloff triggered by DeepSeek's disruptive entry into the market. On Monday, shares of NVIDIA Corp. (NASDAQ: NVDA) suffered a loss of nearly $600 billion in market value, although the stock managed to recover by 8.82% the following day.

Important Insights: DeepSeek, sourced from the $8 billion quantitative hedge fund High-Flyer, has claimed to parallel OpenAI's performance while operating at much lower costs. Their R1 model was developed for just $5.6 million, leveraging lower-end Nvidia chips. However, doubts regarding the sustainability of DeepSeek's technology have begun to temper investment enthusiasm.

As the market recalibrates, it has caught the attention of significant financial figures. For example, Nassim Taleb, known for his book "Black Swan," cautioned investors regarding the vulnerability related to capital concentration in technological stocks. He remarked at the Miami Hedge Fund Week that possible market downturns may be "two or three times bigger" than the selloff seen earlier this week.

In a related development, reports suggest that OpenAI is in talks with SoftBank Group (OTCMKTS: SFTBY) for a potential funding round valued at $40 billion, signifying the fierce competition in the AI domain. OpenAI has also accused DeepSeek of improperly using its proprietary models, further complicating the current narrative.

Current Stock Movement: On Thursday, shares of Baidu closed at $94.77, experiencing a gain of 5.76% for the day. However, in after-hours trading, the stock saw a slight decline by 0.047%, according to market data.

Overall, as developments in AI technology continue to unfold, the markets are closely monitoring potential shifts in focus and opportunities, particularly regarding companies like Baidu.

Cramer, Baidu, Alibaba