The launch of China’s DeepSeek AI app is prompting investors to question top AI US companies about their high capital spending over the years and negligible returns to show for it. Founded by former hedge fund manager Liang Wenfeng, DeepSeek’s r1 AI model is emerging as an alternative to ChatGPT’s o1 and Anthropic’s Claude AI models.
Furthermore, the Chinese company developed the open-source r1 AI model at a fraction of the costs for ChatGPT. It is estimated that the DeepSeek r1 model is 20 to 50 times more affordable to use than OpenAI’s o1 model, depending on the task.
Despite the lack of the latest GPUs and massive investments due to US export controls, DeepSeek achieved a significant milestone through innovative resource optimisation and maximizing software potential.
“DeepSeek’s r1 is an impressive model, particularly around what they’re able to deliver for the price,” OpenAI CEO Sam Altman said on X.com. “But mostly we are excited to continue to execute on our research roadmap and believe more compute is more important now than ever before to succeed at our mission.”
As DeepSeek continues to disrupt the global tech sector, companies across industries continue to achieve transformative breakthroughs. This article details the latest analyst stock ratings and upgrades on trending AI companies involved in quantum computing, renewable energy, biotech, AI cloud, and automotive firms.
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 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).
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10. D-Wave Quantum Inc (NYSE:QBTS)
Number of Hedge Fund Holders: 6
D-Wave Quantum Inc. (NYSE:QBTS) is the parent company of D-Wave Systems and DPCM Capital, Inc. D-Wave Quantum Inc. (NYSE:QBTS) strives to advance quantum AI solutions to improve optimization capabilities of annealing quantum computing that help clients build energy-saving AI and ML workloads. The company is the first commercial supplier of quantum computers that assist in resolving real-world business problems across industries like logistics, AI, materials science, and drug discovery.
On January 27th, Needham hiked the firm’s target price target to $8.50 from $2.25 and maintained a “Buy” stock rating as part of a broader research note on quantum computing names. The analysts said that technical milestones, quantum contract awards of growing dollar value, and mentions of quantum computing by CEOs in recent months have increased awareness of the industry’s potential opportunity among investors. Needham added that reflecting this heightened awareness, the stock prices of pure-play quantum computing companies have risen several-fold since September 30, 2024. The growing valuations of these companies also reflect a strengthened belief that quantum computing could potentially disrupt a meaningful portion of the $1 trillion computing market over the next decade.
9. NextEra Energy Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 17
NextEra Energy Inc. (NYSE:NEE) is a leading renewable energy company boasting nearly 72GW of generating capacity and offers electricity to millions of Americans via its subsidiaries. The company announced partnering with GE Vernova (NYSE:GEV) to build natural gas-fired plants nationwide to power AI data centers. NextEra Energy Inc. (NYSE:NEE) is also planning to reopen its shuttered 600MW Duane Arnold nuclear plant to match the power demand for AI factories and modern data centers.
However, on January 27th, Argus analyst Marie Ferguson trimmed the firm’s price target to $86 from $90 while maintaining a “Buy” stock rating following the Q4 report. The brokerage stated that the lower target price reflects the correction following the 2024 sector momentum in response to interest rates. Overall, analysts maintain a positive outlook for NextEra’s prospects in Florida, given the US state’s growing economy and population growth.
