The Biden Administration is preparing to leave office but is planning to launch an aggressive chips campaign before it goes. South China Morning Post reported that the US government may be revealing new restrictions targeting China’s black-market trade in advanced chips during Biden’s last week in the White House. The so-called “global artificial intelligence (AI) diffusion rule” will aim to limit Chinese companies’ sourcing of advanced artificial intelligence (AI) chips from unrestricted third-party countries. These changes aim to close any existing regulatory loopholes that may allow China to get its hands on powerful graphics processing units (GPUs) essential for training AI models.
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In response, Reuters reported on Tuesday, January 7th, that a technology industry group in the US has urged President Joe Biden’s administration to refrain from issuing a last-minute rule related to the control of global access to AI chips. They warn that these restrictions would harm US leadership in artificial intelligence instead. The Information Technology Industry Council, which represents companies like Amazon and Microsoft, said the rule could come out as soon as Friday. It also said that the rule could place arbitrary constraints on U.S. companies’ ability to sell computing systems out of the country, as well as abandon the global market to competitors.
While a major objective of these controls is to keep artificial intelligence from boosting China’s military capabilities, the technology group believes that it is going to do more harm than good. Previously, the South China Morning Post reported that Washington planned to issue the rule by the end of December 2024. However, the Biden administration had decidedly postponed the release due to delays in expert reviews which were a result of US government “budgetary issues”. Nevertheless, the new controls are anticipated to be released before Biden leaves office.
ITI CEO Jason Oxman has also criticized the administration’s “insistence” on issuing the rule in the final days of Joe Biden’s presidency. Here is what he said:
“Rushing a consequential and complex rule to completion could have significant adverse consequences”.
-Oxman said in the Jan. 7 letter, a copy of which was obtained by Reuters.
ITI also said that even though such rules are commendable, the letter said that “the potential risks to U.S. global leadership in AI are real and should be taken seriously”.
Ken Glueck, executive vice president at Oracle also said in a blog post that the rule “drops the Mother of All Regulations on the commercial cloud industry, regulating… nearly all commercial cloud computing globally for the first time in history.” He said that the controls “will go down as one of the most destructive to ever hit the U.S. technology industry”.
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A close up of a circuit board, its microchips creating a powerful computing system.
10. Penguin Solutions, Inc. (NASDAQ:PENG)
Penguin Solutions, Inc. (NASDAQ:PENG) is a leading AI infrastructure provider for organizations looking to build and operate state-of-the-art generative AI facilities. On January 6th, Loop Capital initiated coverage of Penguin Solutions (PENG) with a “Buy” rating and a $30 price target.
“We’re Initiating on PENG with a Buy and $30 PT. … We believe PENG is an on-the-come Gen AI related company with teeth in important areas of critical next generation technology.”
The company is set to report its first-quarter results on Wednesday, January 8th. According to analyst Ananda Baruah, the company has multiple catalysts in the next one to two years, both fundamental and a “special situation” via SK Telecom that make its story “very intriguing”. Penguin recently closed a $200M strategic investment from South Korean company SK Telecom. The relationship between the two could turn into a catalyst if Penguin ends up building Gen AI data centers for the Korean company. Another catalyst is Penguin’s strong management team, noted the analyst.
“This serves as a ‘top of funnel sales’ relationship for PENG…while allowing SK Telecom to help offset the cost of Data Center construction as their 10% stake in PENG goes up in value”.
-Analyst Ananda Baruah.
9. Soluna Holdings, Inc. (NASDAQ:SLNH)
Number of Hedge Fund Holders: 3
Soluna Holdings, Inc. (NASDAQ:SLNH) develops green data centers for intensive computing applications including Bitcoin mining and AI. On January 6th, Soluna Holdings announced that it has entered into a new agreement with Atlas Cloud (“Atlas”), a company that offers cutting-edge cloud solutions and IT services. Atlas Cloud is the second customer secured through Soluna’s collaboration with Hewlett Packard Enterprise (HPE) GreenLake, a partnership that enables them to bring scalable, sustainable AI cloud solutions to the market. The agreement also strengthens Soluna’s presence in sustainable, high-performance AI computing.
The one-year agreement requires Soluna to provide Atlas with 64 Nvidia H100 GPUs and possibly scale to more. The cluster will enable the support of advanced AI video processing workloads for Atlas and its customers. The deal marks Soluna’s sale of one-third of its initial Cluster from HPE Greenlake, exemplifying success in meeting the demand for energy-efficient AI solutions.
“Our work with Atlas Cloud exemplifies Soluna’s ability to deliver sustainable, high-performance AI cloud services across a range of industries. Building on our first AI customer, this second engagement demonstrates the strength of our collaboration with HPE GreenLake. We’re proud to be powering Atlas’s advanced video processing workloads and expanding our reach in the AI ecosystem”.
– John Belizaire, CEO of Soluna.
8. Perfect Corp. (NYSE:PERF)
Number of Hedge Fund Holders: 9
Perfect Corp. (NYSE:PERF) is a leader in AI and AR-powered beauty technology solutions. On January 7th, the company announced that it is collaborating with MAISON DELAROM, a natural skincare and wellness brand. Together, the two will be bringing radical AI skin analysis technology to the forefront of the luxury skincare market. MAISON DELAROM has taken this initiative as part of its premium repositioning strategy and will be unveiling Perfect Corp.’s Skincare Pro for iPad, which is an AI-powered solution that can analyze up to 14 skin concerns. The technology will be available at the Maison & Objet trade show, Booth G11 in Hall 2 (Well-Being & Beauty section), from January 16 to 20, 2025. Meanwhile, the solution will become available at MAISON DELAROM’s flagship showroom in Paris starting February 1, 2025.
“Skincare Pro embodies the future of personalized beauty, allowing brands to deliver data-driven, tailored solutions to their customers. We are excited to partner with MAISON DELAROM, a house that beautifully blends nature and innovation to redefine luxury skincare”.
-Alice Chang, Founder and CEO of Perfect Corp.
7. Alpha and Omega Semiconductor Limited (NASDAQ:AOSL)
Number of Hedge Fund Holders: 13
Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) designs, develops, and supplies power semiconductor products. On January 7th, the company announced the launch of its AOZ73016QI, a 16-phase, 2-rail controller specifically designed to the latest specifications from NVIDIA. The controller designed to Nvidia’s specifications ensures compatibility with Nvidia-based systems. The 16-phase controller will support AI servers and graphic cards, offering a highly efficient, flexible power solution with benefits such as efficient current monitoring, power management, and the ability to handle extremely high power demands. The controller is also ideal for graphics cards and gaming laptops, offering programmability, advanced power saving, and customization.
“AOS has a long history of developing leading-edge personal computing, server and datacenter solutions. The launch of our successful AOZ73016QI 16-phase controller for OVR16-based designs is the culmination of several years of R&D investment in multiphase controllers. Developed in close collaboration with our customers’ system architects, the AOZ73016QI is a robust, reliable power solution for more advanced AI servers. Plus, the design flexibility afforded by the AOZ73016QI helps lower TCO for next generation AI servers”.
-Ralph Monteiro, Sr. VP, Power IC and Discrete Product lines at AOS.
6. SES AI Corporation (NYSE:SES)
Number of Hedge Fund Holders: 14
SES AI Corporation (NYSE:SES) is a battery company that produces AI-enhanced high-performance Li-Metal and Li-ion batteries. On January 7th, the company revealed an entirely new AI-enhanced 2170 cylindrical cell for emerging humanoid robotics applications. The cell was presented at the 2025 CES Show held at the Las Vegas Convention Center in Las Vegas, Nevada. The cylindrical cell by SES AI uses an electrolyte discovered by SES AI’s Molecular Universe effort which maps the physical and chemical properties of billions of potential molecules. These advancements in GPU and computing software stem from the collaboration between SES AI and NVIDIA, Supermicro and Crusoe announced in September 2024. They have allowed the mapping time to reduce from 8,000 years to just 2 months. The AI-enhanced 2170 cell offers enhanced low temperature, high-rate performance, high-capacity cycling stability, and reduced gassing and thermal risks, opening up opportunities for customers in humanoid robots, drones, and other applications.
“We were asked by several OEMs to find an electrolyte that would solve the gassing and poor low temperature cycling and rate performance issues they were experiencing with traditional Li-ion 2170 cells used in high-energy applications. We believe the new electrolyte we have discovered through our AI solves this issue and opens a new market for us in Li-ion 2170 cells, which are predominantly used in robotics and drone applications. The worldwide market for Li-ion cylindrical cells alone is currently estimated at $10bn in 2023 and expected to grow to $50bn by 2033 according to Allied Market Research. Using this electrolyte in our new cells as well as Li-Metal applications creates additional revenue potential we had not previously anticipated”.
– Founder and CEO Qichao Hu.
5. Rubrik, Inc. (NYSE:RBRK)
Number of Hedge Fund Holders: 23
Rubrik, Inc. (NYSE:RBRK) provides data security solutions to individuals and businesses worldwide. On January 6th, Barclays’ analyst Saket Kalia raised the firm’s price target on Rubrik (RBRK) to $78 from $70 and kept an “Overweight” rating on the shares. The rating was issued as part of a 2025 outlook for the Security, Design, and Vertical-specific software spaces. The analyst told investors in a research note that names in this space could experience an improving backdrop, opportunities in artificial intelligence, and/or even margin improvements.
4. Klaviyo, Inc. (NYSE:KVYO)
Number of Hedge Fund Holders: 24
Klaviyo, Inc. (NYSE:KVYO) is a global technology company that offers e-marketing solutions. Its marketing platform heavily utilizes machine learning and AI capabilities. On January 6th, Klaviyo Inc. announced several AI-powered capabilities that will enable B2C marketers to leverage data-driven decisions to personalize at scale, optimize performance, and achieve better outcomes. The advancements will allow marketers to transform raw customer data into actionable insights, empowering personalized experiences, smoother decision-making, and quantifiable cost savings and revenue growth. Customers can leverage Klaviyo’s advanced analytics for unlimited first-party data with no caps on storage or retention, use Klaviyo’s AI to optimize campaigns, personalize them, predict customer behavior, as well as measure ROI effortlessly and adapt strategies for growth.
“With our expanded analytics capabilities, Klaviyo eliminates these challenges by unifying data, simplifying analysis, and delivering AI-driven insights that power smarter, faster decisions. Marketers can now focus on building deeper relationships with customers, driving brand loyalty, and achieving outsized growth—all without guesswork”.
-Adil Wali, Chief Product Officer at Klaviyo.
3. Juniper Networks, Inc. (NYSE:JNPR)
Number of Hedge Fund Holders: 47
Juniper Networks, Inc. (NYSE:JNPR) is a global networking company that designs, develops, and sells network products and services. On January 7th, the company announced that it had been selected by AI pioneer ionstream.ai. Juniper will be providing data center switching and automated operations for ionstream.ai’s AI-managed services. The Juniper AI data center solution, a key element of Juniper’s AI-Native Networking Platform, is fundamental to ionstream.ai’s AI service offerings owing to its ability to maximize network utilization, enhance GPU performance, and secure environments for multi-tenant environments. Juniper’s full Networking for AI solution offers various benefits for customers and partners, which include lower AI training Job Completion Times (JCTs), reduced latency during inferencing, and increased GPU utilization. Deployment times are decreased by up to 85 percent and operations costs are reduced by up to 90 percent in some instances.
“ionstream.ai understands that organizations require high-performance, economical AI infrastructure, but that they also need flexible consumption models. This is the ideal time for an enterprise to use high-performance data center solutions to execute new AI projects and reap the benefits of this technology without the need for in-house expertise or resources. Having been the first vendor to ship 800G switches, Juniper is excited to announce that we have already shipped over one hundred thousand 800GbE ports globally. This underlines how well our three key tenets for the solution, automation, performance and open flexibility, is resonating in the industry.”
– Praveen Jain, Senior Vice President & General Manager, Data Center & AI, Juniper Networks
2. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 49
MongoDB, Inc. (NASDAQ:MDB) provides a general-purpose database platform worldwide. It securely amalgamates operational, unstructured, and AI-related data to streamline building AI-enriched applications. On January 6th, Guggenheim analyst Howard Ma upgraded MongoDB (MDB) to “Buy” from Neutral with a $300 price target. Once a star AI stock, MongoDB has suffered a rough 2024 which makes it “seems more like the ugly duckling in infrastructure software as of late than the soaring eagle it’s long been”. Nevertheless, Ma is optimistic about the database software company even after shares were down 30% since fiscal Q3 earnings on December 9.
This is because a recent channel check from the firm indicates that Q4 consumption augmented from Q3 and “assuming stable consumption in fiscal year 26, we see Atlas accelerating to 29% growth vs. more than 27% in FY25”. While the analyst doesn’t expect MongoDB to soar like an eagle once again, he does expect the company to offer investors a balanced growth and expanding margin. Ma also noted that MongoDB is focusing on its Enterprise Advanced offering as well as adopting a “run anywhere” approach that can “meet the demand for running both core business apps and new AI workloads in hybrid environments”.
1. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 60
Accenture plc (NYSE:ACN) offers strategy and consulting services. On January 6th, Accenture announced that it has launched AI Refinery™ for Industry. The AI Refinery for Industry is a collection of 12 industry agent solutions that will enable organizations to accelerate the development and deployment of AI agents. These agents will allow speeding up the placement of specialized, multi-agent networks that are in turn ready to be customized with an organization’s data. Using Nvidia’s AI technology, the industry solutions will speed up the time to build and gain value from agents from months and weeks to days. Accenture plc (NYSE:ACN) plans to add more than 100 AI Refinery for Industry agent solutions by the end of the year.
“The launch of AI Refinery for Industry represents an expansion of the platform and our collaboration with NVIDIA—which helps clients convert raw AI technologies and tools into scaled enterprise AI systems—providing a foundation to accelerate agentic functionality and reimagine functions and industry processes. Our new industry agent solutions will empower organizations to conceptualize agents and quickly prove their value, hitting the ground running on day one as a network of digital teammates”.
-Lan Guan, chief AI officer, Accenture.
While we acknowledge the potential of ACN 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 ACN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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