A stock really has made it when it breaks the $200 billion market cap threshold. Of the thousands of stocks, only 44 boast megacap valuations.

It probably won't come as a surprise that Wall Street likes most of the megacap stocks. In fact, there's a consensus analyst rating of buy or strong buy for 41 of the 44. But which mega-cap monster stock is Wall Street most bullish about right now?  

Not who you might think

Let's scratch a couple of names off the list right out of the gate. Nvidia (NVDA 0.03%) stands out as an obvious candidate for Wall Street's favorite megacap stock. After all, the company recently delivered stunning growth on surging demand for its graphics processing units (GPUs). Nvidia's share price has more than tripled this year.

Many analysts do hold Nvidia in high regard. The average 12-month price target for the stock reflects an upside potential of 22%. One especially optimistic analyst thinks that Nvidia can soar more than 120% over the next 12 months.

However, there's definitely no consensus on Wall Street about Nvidia. Quite a few analysts don't recommend buying the stock, largely because of valuation concerns.

Amazon (AMZN 0.75%) is another Wall Street darling we can eliminate. The stock is up more than 50% year to date. Amazon's profits are growing. Generative AI should provide a nice long-term tailwind for its cloud services business. But while most analysts rate Amazon as a buy or strong buy, the average price target is only around 19% above the current share price.

Wall Street's favorite megacap monster

So which stock is Wall Street's favorite megacap monster? It's (drumroll, please)... Alibaba Group (BABA 1.14%). 

The Chinese technology giant might be a surprise for some investors. Alibaba's share price is barely above where it began 2023. The company's year-over-year revenue growth of 14% in its latest quarter pales in comparison to Nvidia's 101% revenue growth.

But of the 48 analysts surveyed by Refinitiv in August, all but one recommended the stock as a buy or strong buy. (The one exception rated the stock as a hold.) The average price target for Alibaba is more than 60% above its current share price. Even the most bearish analyst believes the stock will move higher in the coming months.

One key draw for Alibaba is its dirt cheap valuation. The stock currently trades at a forward earnings multiple of only 9.3x. You won't find many tech stocks that are priced at such a bargain.

Many on Wall Street also like Alibaba's planned spin-offs of several businesses, including its cloud unit. Growth has been sluggish for Alibaba Cloud recently. However, AI should provide a major catalyst over the long run. Alibaba CEO Daniel Zhang said in the company's quarterly update earlier this month, "We believe that the technology evolution brought by AI is not a short-term opportunity but the beginning of a new era." 

Alibaba showed off its AI chops last week. The company launched a new AI model on Friday that can understand images and conduct more involved conversations than its previous technology. Alibaba is making its latest AI model available via open source. Although it won't receive licensing revenue, the move could drive more customers to its cloud platform. 

Are analysts right?

Like any of us, Wall Street analysts can be wrong. In this case, though, I suspect they have identified a winner. Alibaba's long-term prospects should be much stronger than its current valuation indicates.

The biggest concern with buying the stock, in my opinion, is that it's based in China. There's always the possibility that the Chinese government could interfere with Alibaba's business in a negative way. 

Investors should keep this key risk in mind. However, if you're looking for a way to profit from the AI boom that isn't ridiculously expensive and that has a lot of cheerleaders on Wall Street, Alibaba is arguably the best choice right now.