In this article, we discuss the 10 AI news that broke the internet.
Key AI Trends Shaping Business in 2025
As AI continues to evolve, its influence on business will be undeniable, reshaping industries with smarter, more efficient solutions. Companies that embrace these trends will be better equipped to innovate, compete, and thrive in an increasingly AI-driven world. According to Oliver Parker Vice President, Global Generative AI Go-To-Market, Google Cloud, artificial intelligence is set to significantly impact businesses in 2025, driving innovation and transforming operations.
Key trends include multimodal AI, which combines text, audio, and visual data for more accurate and contextual analysis; AI agents that simplify complex workflows and support employees; improved enterprise search capabilities allowing users to access data through various media; improved customer experiences with personalized and predictive AI solutions; and stronger security systems powered by AI to detect threats and strengthen defenses. However, this progress also introduces challenges, especially in the realm of AI-driven security threats.
READ ALSO: 10 Companies Hoarding Bitcoin Like There’s No Tomorrow and 9 Trending AI Stocks on Latest News and Ratings.
AI Innovation Moves Towards Efficiency and Applications
The AI landscape is undergoing a significant shift, with a growing focus on algorithmic innovations and software applications rather than just scaling hardware. As generative AI models mature, startups and smaller companies are emerging as key players, driving efficiency and new use cases in the field.
In the discussion on CNBC, Chetan Puttagunta from Benchmark and Deirdre Bosa of CNBC focused on the evolving AI landscape. Chetan highlighted that AI innovation is shifting from large-scale hardware investments to algorithmic advancements, especially at the model layer, with entrepreneurs pushing the frontier in inference and AI applications. He mentioned that recent investment trends are moving toward smaller startups focused on algorithmic breakthroughs, as opposed to just scaling hardware.
Deirdre added that AI’s generative phase is transitioning from pre-training large models to leveraging existing models for real-world applications. This phase is characterized by a focus on software, with smaller companies gaining traction, especially with the rise of open-source models like Llama, allowing new startups to challenge established players. Chetan gives examples like Sierra, which is revolutionizing customer service by automating tasks and improving customer experiences. Both see a significant opportunity for new AI-first startups to disrupt traditional software companies.
For this article, we selected AI stocks by going through 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).
10 AI News That Broke the Internet
10. Tevogen Bio Holdings Inc. (NASDAQ:TVGN)
Number of Hedge Fund Holders: 10
Tevogen Bio Holdings Inc. (NASDAQ:TVGN) is a clinical-stage immunotherapy company developing precision T-cell therapies, including those enhanced by artificial intelligence, to address unmet medical needs. Its intellectual property portfolio includes patents and pending applications related to AI, all fully owned without third-party licensing.
On December 19, Tevogen Bio (NASDAQ:TVGN) filed a new patent titled “Systems And Methods For Predicting Immunologically Active Peptides With Machine Learning Models.” This builds on its AI-driven initiatives to improve drug discovery, development, manufacturing, and accessibility, which began with the launch of Tevogen.AI in October 2023 to strengthen drug discovery and access. The company also has partnerships with Microsoft through the Microsoft for Startups program as of May 2024, leveraging AI expertise to boost its efforts. In November 2024, machine learning was applied to identify targets for HPV treatment, marking the launch of its oncology pipeline. The company CEO Dr. Ryan Saadi said:
“When combining our expertise across biopharma and artificial intelligence, we anticipate becoming a leader in the field with breakthroughs to follow… We will provide additional updates about the company, including our AI effort, at the J.P. Morgan Healthcare Conference in January 2025.”
9. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 26
Lumen Technologies, Inc. (NYSE:LUMN) offers technology and communications solutions, including AI-powered services like edge cloud, secure networking, and IT solutions for businesses and individuals.
On December 17, Prometheus Hyperscale and Lumen Technologies (NYSE:LUMN) partnered to support Prometheus’ energy-efficient data centers, designed to meet the increasing demands of AI, big data, and cloud computing. Lumen’s network services, including Private Connectivity Fabric and DDoS protection, will provide the high-performance, low-latency infrastructure necessary for AI workloads. Prometheus, focused on sustainability, aims to integrate renewable energy and AI-driven energy optimization at its data centers. The collaboration will help Prometheus expand its facilities in Wyoming and other western U.S. locations, with a commitment to renewable energy and carbon neutrality. Ashley Haynes-Gaspar, Lumen EVP and chief revenue officer commented:
“We’re proud to partner with Prometheus Hyperscale in supporting the next generation of sustainable AI infrastructure. Our Private Connectivity Fabric solution was designed with scalability and security to drive AI innovation while aligning with Prometheus’ ambitious sustainability goals.”
8. Zoom Communications Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 39
Zoom Communications Inc. (NASDAQ:ZM) supports industries worldwide with advanced, AI-driven communication capabilities.
Jefferies upgraded Zoom Communications (NASDAQ:ZM) to Buy from Neutral, raising the price target to $100 from $85. The firm expects Zoom’s focus on monetizing artificial intelligence to boost revenue growth in 2025. Additionally, the company is expanding its presence in enterprise workflows beyond traditional communications, with fiscal 2026 projections considered “reasonable”. Jefferies suggests that any of these factors could lead to a reassessment of the stock’s value. The analyst noted that Zoom trades at a lower EV/FCF multiple (11x for FY27) compared to the communications average (13x) and the IGV index (31x). The new price target is based on a 14x EV/2027 FCF valuation.
7. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 44
Cloudflare, Inc.’s (NYSE:NET) provides cloud-based solutions integrating AI for enhanced security, performance, and zero-trust services across various platforms, including IoT and SaaS applications.
Jefferies raised its price target on Cloudflare Cloudflare, Inc. (NYSE:NET) to $125 from $100 while maintaining a Hold rating. The firm anticipates a slow start for software stocks in 2025 as investors adjust to changes under the new administration. Although material AI benefits are expected late in the year. Jefferies sees cybersecurity, including Cloudflare, as more resilient in the first half of 2025 due to strong fundamentals, though it will trail any broader AI-driven market recovery. More recently, Citi analyst Fatima Boolani also maintained a Hold rating on the company and raised the price target to $95 from $90.
6. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 68
Intel Corporation’s (NASDAQ:INTC) AI-driven technologies enhance performance, automation, and data integrity for global digital transformation.
According to Bloomberg, Intel (NASDAQ:INTC) has shortlisted several buyout firms for the next round of bidding for its Altera unit, with private equity firms such as Francisco Partners, Silver Lake Management, and Lattice Semiconductor competing alongside Apollo Global Management and Bain Capital. Intel is seeking offers by the end of January, with potential deals ranging from partial to full control of Altera, valued between $9 billion and $12 billion. Despite Lattice’s smaller market value, it could partner with a financial firm to increase its chances. This move is part of Intel’s ongoing efforts to advance plans initiated by former CEO Pat Gelsinger, even amid criticism of the company’s progress on other projects.
Intel Corporation (NASDAQ:INTC) launched Altera as a standalone Field-Programmable Gate Array (FPGA) company in February this year. The company aims to lead a $55 billion market opportunity with a focus on AI-integrated FPGAs. The company is leveraging AI technologies, including FPGA AI Suite and OpenVINO, to provide optimized solutions for AI inferencing.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) integrates AI into its wireless technologies, supporting applications in mobile devices, automotive systems, IoT, and edge networking. It also invests in early-stage AI innovations, advancing connectivity and intelligent computing across industries.
As reported by Reuters on December 18, Qualcomm estimated potential annual savings of $1.4 billion in royalties to Arm by acquiring Nuvia, a startup purchased for $1.4 billion in 2021, as revealed during a Delaware federal court trial. CEO Cristiano Amon testified that the acquisition was justified by these projected savings and Nuvia’s critical role in Qualcomm’s strategy to strengthen its chip designs for PCs and smartphones, aiming to compete with Apple and Intel. Qualcomm acquired Nuvia after attempts to partner with the startup failed, leveraging its expertise despite Nuvia’s lack of a finished product and initial focus on servers. The trial involves Arm’s claim that Qualcomm used Nuvia’s technology without proper licensing consent.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) integrates AI into its semiconductor solutions, including processors, GPUs, and adaptive SoCs, to support data processing, gaming, and embedded systems.
AMD’s ventures arm co-led a $3.5 billion growth financing round for Vultr, a major provider of cloud infrastructure and AI solutions. On December 18, the cloud infrastructure provider announced that it raised $333 million in funding, led by AMD’s venture arm and LuminArx Capital Management. Vultr, which uses AMD Instinct accelerators, plans to utilize the funding to expand its global presence and AI infrastructure capabilities. AMD highlighted Vultr’s expertise in delivering scalable and secure cloud solutions, emphasizing their shared mission to support enterprises and AI innovators with high-performance computing for AI development and deployment. J.J. Kardwell, CEO of Vultr said:
“As we continue our global expansion, LuminArx’s collaborative, innovative approach and AMD’s strategic impact enable Vultr to further accelerate growth in AI infrastructure and cloud computing, creating the category-defining independent cloud infrastructure company.”
3. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Alibaba Group Holding Limited (NYSE:BABA) AI across several applications, including chatbots for customer service, NLP and machine learning for text analysis and model development, and advanced tools like AI translation and text-to-video creation.
South China Morning Post reported that Alibaba Group has restructured its AI teams by separating the development of its chatbot, Tongyi Qianwen, from its large language model (LLM) research. The AI chatbot team will now operate under the Intelligent Information Platform, which focuses on consumer-facing products like the UC Browser and Quark search engine. Meanwhile, the LLM research division, Tongyi Lab, will remain part of Alibaba Cloud, dedicated to fundamental research and supporting specific products. This move reflects Alibaba’s efforts to boost consumer AI products and keep pace with the competitive AI market in China.
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) drives AI innovation with solutions for gaming, data centers, and autonomous systems.
The Information reported that the U.S. Commerce Department is investigating how Nvidia’s (NASDAQ:NVDA) advanced AI chips have been smuggled into China, reportedly in violation of export laws. Inquiries were sent to Nvidia, Super Micro Computer, and other partners, including Dell, to trace these activities. Nvidia and Supermicro have initiated audits of customers in Southeast Asia, a region linked to chip smuggling. Reports indicate some individuals involved in the smuggling altered server serial numbers to avoid detection. Despite inspections, five individuals claim to have evaded discovery, and investigations are ongoing.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) integrates AI into its software, cloud services, and productivity tools, enhancing business applications, cloud computing, and automation. Its AI solutions support a wide range of industries, from enterprise services to personal computing and gaming.
UBS increased Microsoft’s (MSFT) price target to $525 from $500, maintaining a Buy rating. The firm expects Azure growth to be more back-end loaded as new capacity comes online in the second half. Despite concerns over the CEO’s “AI winter” comment, UBS views Microsoft as a top-tier provider with no signs of over-build among smaller GPU cloud players. Analyst Karl Kierstead noted:
“While the CEO’s ‘AI winter’ comment is unsettling, we’re comfortable that Microsoft is at the highest quality end of the customer/workload spectrum, and we’re not seeing any clear evidence of over-build among the smaller GPU cloud providers.”
While sentiment around Microsoft is improving, it remains mixed due to uncertainties about Azure’s capacity timelines, elevated capital expenditures, and the future of its relationship with OpenAI.
While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) 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 MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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