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.
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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.
8. IonQ Inc. (NYSE:IONQ)
Number of Hedge Fund Holders: 17
IonQ Inc. (NYSE:IONQ) is a quantum computing firm that develops and manufactures quantum computers that use trapped ions as qubits to solve complex problems, including those in the fields of AI, finance, medicine, chemistry, and logistics. The company’s quantum computers are available through major cloud providers. IonQ Inc. (NYSE:IONQ) recently announced that it has successfully loaded classical data onto quantum states to enable efficient and robust quantum machine learning with high accuracy and faster speeds than classical computers.
On January 27th, Needham analyst N. Quinn Bolton increased IonQ Inc.’s (NYSE:IONQ) stock price target to $54 from $18 and maintained a “Buy” rating. Similar to D-Wave Quantum Inc. (NYSE:QBTS), the brokerage said pure-play quantum computing firms, including IonQ Inc. (NYSE:IONQ) are poised to benefit from the recent technical breakthrough, increasing dollar value of quantum awards and growing recognition of quantum computing as a potential way to disrupt the computing market in the coming decade.
7. Schrödinger Inc. (NASDAQ:SDGR)
Number of Hedge Fund Holders: 17
Schrödinger Inc. (NASDAQ:SDGR) utilizes quantum mechanics in medicine and material design to help biopharma companies as well as government labs in their research programs. Its drug discovery programs in various therapeutic areas lower drug development risks by identifying high-value targets backed by clinical validation. Declining computation costs, Schrödinger Inc.’s (NASDAQ:SDGR) protein structure forecasting technology and AI integration are collectively expanding its capabilities to speed up physics simulations and develop technologies like machine-learned force fields for precise molecular property prediction.
On January 24th, KeyBanc hiked Schrödinger Inc.’s (NASDAQ:SDGR) stock price target to $27 from $25 while reiterating an “Overweight” rating. The brokerage is of the view that the company deserves a more premium valuation multiple, given its recurring, high-margin revenue streams and massive internal pipeline of opportunities.
6. Bitdeer Technologies Group (NASDAQ:BTDR)
Number of Hedge Fund Holders: 19
Bitdeer Technologies Group (NASDAQ:BTDR) offers blockchain and high-performance computing solutions. Its crypto-mining solutions include data center design, equipment procurements, and hosting services. Meanwhile, Bitdeer AI, part of Bitdeer Technologies Group (NASDAQ:BTDR), is an AI cloud service provider of an advanced AI Training Platform.
Bitdeer AI enables developers to train, manage, and scale AI and HPC workloads through robust AI infrastructure supported by the NVIDIA DGX SuperPOD with H100 GPUs, DDN Storage, and InfiniBand Networks. On January 27th, Keefe Bruyette initiated coverage of Bitdeer Technologies Group (NASDAQ:BTDR) with an “Outperform” stock rating and a $26.50 price target per share.
5. Applied Digital Corp. (NASDAQ:APLD)
Number of Hedge Fund Holders: 26
Applied Digital Corporation (NASDAQ:APLD) designs, constructs, and operates data centers and offers cloud services for AI to help meet the rapidly growing demand for high-performance computing. The company also focuses on constructing data centers near renewable energy sources as part of its sustainability goals to lower the carbon footprint of high-power computing.
On January 28th, Compass Point analyst Joe Flynn initiated coverage of Applied Digital with a “Buy” rating and a $10 stock price target. The brokerage firm, which acknowledges that its target price implies a 50% upside following the 28% selloff in the stock yesterday related to the DeepSeek disruption, believes the risk-reward of signing a 100MW-400MW lease with a hyperscaler this year is more lucrative. Furthermore, the company’s Macquarie Asset Management Equity Partnership will also help secure a lease “over the finish line.” Following the selloff, analysts see “an interesting opportunity to again buy into the stock to play the HPC datacenter lease signing catalyst,” adding the upside opportunity “looks binary based on whether APLD can sign a 400MW lease in 2025 or not.” Compass Point noted that using a 60%/40% probability gets to an expected value above the current stock price with a “free option” on the pipeline beyond 400MW.
4. Teladoc Health Inc. (NYSE:TDOC)
Number of Hedge Fund Holders: 32
Teladoc Health Inc. (NYSE:TDOC) is a leading virtual healthcare company offering services like patient-clinician engagement via telephone and videoconferencing software to facilitate secure remote medical care. The company uses GenAI to enhance patient safety and care delivery for hospitals. It also uses AI to automate clinical documentation during virtual consultations, addressing workforce shortages while improving virtual nursing services.
On January 24th, RBC Capital raised Teladoc Health Inc.’s (NYSE:TDOC) stock target price to $12 from $11 while maintaining an “Outperform” rating ahead of its Q4 results. The brokerage stated that the firm’s BetterHelp revenue and trends remain in focus as its user base has dropped sequentially in the past five quarters. However, RBC’s analysis of app utilization revealed that a positive reversal in this trend could have occurred. Analysts highlighted that during Teladoc Health Inc.’s (NYSE:TDOC) recent management meeting, the company said it was witnessing better momentum on the international side of the BetterHelp business as it continues to speed up its investments there.
3. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 52
Aptiv PLC (NYSE:APTV) is an automotive parts company that leverages AI and ML to enhance vehicle safety and security while ensuring sustainability in its business operations. The company uses AI technology in its cost-effective advanced driver-assistance systems (ADAS), sensing and perception offerings, and vehicle connectivity solutions in accordance with its objective to offer the broadest possible operating performance. The company also uses AI to improve interior products and enhance supply chain visibility to extract actionable insights.
On January 27th, Baird upgraded the company’s stock rating to “Outperform” from “Neutral.” The brokerage also lifted its target price to $82 from $75 per share. The analysts said that a new sum-of-the-parts analysis showed that 15%-plus of new estimated value is unlocked by the Electrical Distribution Systems spin, which also “unlocks several facets of fundamental value,” as the new Aptiv PLC (NYSE:APTV) should be higher growth and more diversified. Baird added that with investors preliminarily seeking H2 2025 auto plays, Aptiv PLC (NYSE:APTV) should screen well, featuring cyclical and fundamental catalysts, with the spin “newly providing cover to be early.”
2. Autodesk Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 70
Autodesk Inc. (NASDAQ:ADSK) offers diverse software products and services, including 3D design tools for several industries, including engineering, construction, manufacturing, and entertainment. The company is integrating AI across its products and services to boost customer experience, improve workflows, automate documentation, and improve decision-making while reducing labor-intensive processes.
On January 28th, Mizuho analyst Siti Panigrahi upgraded Autodesk Inc. to “Outperform” from “Neutral” and raised its stock price target to $400 from $280. The brokerage said that with the “smooth rollout” of the new transaction model, Autodesk Inc. (NASDAQ:ADSK) could achieve $10 billion in revenue by FY29, pushing its five-year annual growth rate to 13% from 11% and delivering $15 in FCF per share alongside 400 bps of margin expansion, despite transition-related financial impacts. Analysts see an upside to consensus estimates due to positive channel checks and macro trends alongside signs of a recovery in industry data, further boosting the company’s fundamentals.
1. Intuitive Surgical Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 82
Intuitive Surgical Inc. (NASDAQ:ISRG) is a healthcare firm that designs, builds, and markets robotic-assisted surgical systems. The company is using AI to refine its robotic systems, like the popular da Vinci Surgical System, to help surgeons perform minimally invasive surgeries more effectively for better patient outcomes. Intuitive Surgical Inc. (NASDAQ:ISRG) is also using real-time AI to assist clinicians in predicting patients’ risk of having surgical complications.
On January 24th, Truist analyst Richard Newitter increased Intuitive Surgical Inc.’s (NASDAQ:ISRG) stock target price to $666 from $640 while retaining its “Buy“ rating. The brokerage stated that the company delivered a massive Q4 earnings beat, and its FY25 guidance could prove “conservative” as the launch of da Vinci 5 systems is “just getting going”. Analysts added that its expectations for 13% revenue growth and 9% EPS growth are starting points, which should leave room for more upside.
While we acknowledge the potential of Intuitive Surgical Inc. (NASDAQ:ISRG) as an investment, our conviction lies in the belief that 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 ISRG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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