Mega Alakazam uses the Trace Ability which copies the special Ability upon entering battle. In a double battle, it has an equal chance of copying either opponent's Ability.
Alakazam can Mega Evolve into Mega Alakazam if it is holding an Alakazite.
Mega Alakazam resides in the Overused (OU) tier of competitive battling. With a high 175 base Special Attack and a stellar 150 Speed that puts it well ahead of the majority of the unboosted metagame, Mega Alakazam is a legitimately scary threat that boasts a solid offensive niche in the OU tier, being able to act as a revenge killer and potential late-game sweeper. Its ability Trace can be incredible in specific situations, as it allows Mega Alakazam to take advantage of certain abilities, such as Swift Swim, and revenge kill weather sweepers like Kingdra and Mega Swampert. Mega Alakazam's inherent flaw lies in its frailty, which leaves it vulnerable to the priority and omnipresent attacks like Knock Off, Pursuit, and U-turn. Choice Scarf users also pose a problem to Mega Alakazam as they can outspeed it and heavily damage it with their attacks. It can struggle to break through certain bulkier Pokémon that can shrug off its attacks like Magearna, Celesteela, and Ferrothorn.
Related Threadsmega alakazam is dirt crap - last post by @ Jul 18, 2014
Mega Evolves Breakdown/Speculation *Spoiler Alert* - last post by @ Nov 6, 2013
Mega Evolution Wishlist - last post by @ Apr 26, 2015
Considering Alakazam for my mega.. - last post by @ Feb 11, 2014
Pokemon X and Y Hurt and Heal: Mega Edition! - last post by @ Dec 7, 2013