In this article, we discuss the 10 AI news and ratings investors should not miss.
News agency Reuters recently reported that the rise of artificial intelligence is reshaping investment strategies, driving massive capital demands that challenge traditional tech-sector dynamics. Unlike previous tech booms focused on software, the current AI wave is heavily centered on hardware, which is significantly more capital-intensive. Per the report, big tech companies are projected to spend over $200 billion on capital expenditures in 2025 nearly double the levels of 2021. These investments primarily target AI infrastructure, from data centers to advanced chips.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
The report contends that the shift to hardware-oriented AI development introduces long-term financial risks. AI infrastructure projects often have extended timelines before profitability, making them vulnerable to economic slowdowns, inflation, and geopolitical factors. AI startups, too, face challenges. Their capital-intensive models rely on large funding rounds, with 2024 seeing nearly half of US venture capital allocated to AI. However, per Reuters, economic downturns or high capital costs could restrict funding availability, slowing innovation and reducing demand for AI hardware. Additionally, hardware businesses face cyclical risks, including inventory fluctuations and delayed scalability.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A trader in a financial institution using fundamentals analysis to select stocks for a portfolio.
AI News and Ratings Investors Should Not Miss
10. Laser Photonics Corporation (NASDAQ:LASE)
Number of Hedge Fund Holders: 2
Laser Photonics Corporation (NASDAQ:LASE) provides integrated laser blasting solutions for corrosion control, rust removal, de-coating, pre- and post-welding, laser cleaning, and surface conditioning. The firm recently announced that it would attend the International Electron Devices Meeting 2024 to present advanced laser solutions for the semiconductor industry. Wayne Tupuola, the CEO of the firm, said his company was excited to relay how quickly and accurately laser technology can process brittle crystalline materials used in semiconductors, solar panels, and related products. Businesses are considering a shift to photonics for AI data center networks as speed and efficiency become central concerns in AI development.
9. POET Technologies Inc. (NASDAQ:POET)
Number of Hedge Fund Holders: 5
POET Technologies Inc. (NASDAQ:POET) designs, develops, manufactures, and sells discrete and integrated optoelectronic solutions in Canada, the United States, Singapore, and China. The optoelectronic products marketed by the firm can help convert data from electric signals to light signals to be transmitted through optical wires. This allows for higher data transfer bandwidths, lower loss, and simpler cooling needs, especially within AI data centers. On November 22, Craig-Hallum raised the price target on the stock to $5.50 from $3.50 and kept a Buy rating on the shares. Poet Technologies has increased its engagement with key datacom xcvr, largely through its partnership with Mitsubishi, a leading datacom laser supplier, the advisory told investors in a research note.
8. Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 47
Elastic N.V. (NYSE:ESTC) is a search artificial intelligence company that delivers hosted and managed solutions designed to run in hybrid, public or private clouds, and multi-cloud environments. On November 22, Truist analyst Joel Fishbein raised the price target on the stock to $135 from $105 and kept a Buy rating on the shares. The company’s Q2 results exceeded the advisory’s reduced expectations after its lowered revenue guidance last quarter, and the management continues to see strong demand from search and GenAI use cases, along with stronger consumption than expected from larger customers, Trusit told investors in a research note.
7. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix, Inc. (NASDAQ:EQIX) is a California-based real estate trust that operates data centers and other technology assets. The firm helps AI businesses host AI infrastructure for AI model development and offers network-rich interconnected locations for AI inference. On November 22, Light Reading, a digital media platform focusing on the global networking and services industry, reported that Equinix recently laid off 3% of its global workforce amid a broader effort to reallocate resources and prioritize initiatives that accelerate new growth strategies. The move came after the company unveiled plans to invest up to $15 billion in new infrastructure designed to support AI operations.
6. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 68
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. The firm recently commissioned a study in which 6,000 people aged 18 and over across Germany, the UK, and France were asked about their computer usage habits and awareness of AI PCs. The report claims that AI PCs can save people hours weekly through built-in artificial intelligence with features like accelerated task processing, enhanced privacy, and adaptive learning. Per the findings of Intel, the productivity gain of using AI PCs is said to be more than 240 minutes saved weekly on routine tasks.
5. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) provides cloud-delivered protection across endpoints and cloud workloads, identity, and data. The firm is harnessing artificial intelligence to streamline and strengthen cyber protection. On November 22, Baird raised the price target on the stock to $375 from $315 and kept an Outperform rating on the shares. The advisory said they are facing easier 2H ARR/revenue comps. It added that despite overhangs from the July incident and near-term headwinds, channel feedback is ticking up on minimal gross-churn and early renewal success with key strategic initiatives.
4. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. The AI-capable chips of QUALCOMM are now making their way into cars and IoT devices, after powering smartphones globally. Indian news outlets are reporting that a senior executive of Reliance Jio, a telecom firm with close to 500 million customers, has said that his firm is working with QUALCOMM to offer value propositions on fifth-generation or 5G-enabled smartphones. These phones now come loaded with AI features and need access to high-speed internet for smooth processing of AI tasks.
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. Cybersecurity news platform SC World recently reported that OSS-Fuzz, a tool developed by Google that just got AI capabilities, has discovered 26 new vulnerabilities in open-source projects, including a long-overlooked flaw in the vital OpenSSL library. The report claims that over the past few months, Google has improved its AI-powered fuzzing framework for OSS-Fuzz to add additional capabilities, including the ability to automatically fix compilation issues and other errors in fuzz targets.
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On November 21, Wedbush analyst Matt Bryson raised the price target on the stock to $175 from $160 and kept an Outperform rating on the shares following quarterly results. The advisory notes Nvidia again delivered to heightened investor expectations as Q3 met investor expectations, Q4 forecasts suggest a path to modeled buyside revenues, and the company favorably addressed perceived potential risks.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. Hitachi Vantara, an IT service management firm, recently announced that it would be building on a collaboration with Microsoft announced last year to create an AI-ready full stack platform leveraging Azure for delivering a hybrid cloud solution. According to a report by tech news platform SiliconAngle, the agreement between the two companies launched Hitachi Unified Compute Platform for Azure Stack HCI, delivering enhanced cloud management across multiple environments encompassing data centers and the edge.
While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Microsoft Corporation (NASDAQ:MSFT) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
