“Deep Research” is the name of the AI tool OpenAI launched yesterday. According to the GenAI star startup, it can conduct multi-step research on the internet for complex tasks. Deep Research is powered by a version of the upcoming OpenAI’s o3 model which is optimized for web browsing and data analysis, as reported by Reuters.
This kind of technology is called an A.I. agent. AI agents can use other software on the internet, perform tasks, and learn from experience. It seems that artificial intelligence agents are going to be all the hype this year, as predicted by plenty of analysts and industry experts in the artificial intelligence world. Soon enough, there may be jobs that only AI agents could apply for.
“We’ve observed tangible progress, with the industry coalescing around the concept of AI ‘agents’ capable of executing a task on your behalf. At work, an agent could analyse customer purchase histories and automatically select and deliver personalized email promotions designed to boost sales”.
-US investment firm Franklin Templeton
READ NOW: These 29 AI Electricity and Infrastructure Stocks Are Crashing Due to DeepSeek News and 10 AI Stocks to Watch Amid the DeepSeek Buzz
OpenAI said that all users have to do is give it a prompt which will enable OpenAI’s chatbot ChatGPT to find, analyze, and synthesize several online sources, be it text, images, or PDFs, to develop a comprehensive report at the level of a research analyst.
“It accomplishes in tens of minutes what would take a human many hours”.
-OpenAI.
However, it does have limitations as it is still in its early stages.
“It may struggle with distinguishing authoritative information from rumors, and currently shows weakness in confidence calibration, often failing to convey uncertainty accurately.”
Currently, the AI tool is available on the web version of ChatGPT and will be rolled out to mobile and desktop apps within February. This is the second AI agent that OpenAI has launched this year, following Operator, a tool that can perform a variety of tasks such as creating to-do lists or assisting with vacation planning.
For this article, we selected AI stocks by going 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 woman using a mobile browser to search for news stories to stay up to date.
10. Informatica Inc. (NYSE:INFA)
Number of Hedge Fund Holders: 22
Informatica Inc. (NYSE:INFA) is a leader in enterprise AI-powered cloud data management. On January 30, the company announced that its AI-powered Intelligent Data Management Cloud™ (IDMC) platform has been certified by the EDM Council for meeting the requirements of the 14 key controls of the EDM Council Cloud Data Management Capabilities (CDMC) framework. The certification was granted following an independent assessment by Projective Group. Enterprises can now ensure that Informatica is the only vendor that delivers a single, connected, AI-powered data management cloud platform aligning with the 14 key controls of the CDMC framework.
“Informatica is proud to be the only AI-powered, comprehensive cloud data management solution that aligns to the 14 key controls of the CDMC framework, enabling our customers to have complete confidence in migrating, managing and governing their data in cloud/hybrid cloud ecosystems. This certification enables our customers to accelerate cloud adoption securely, improve operational efficiency and optimize resources through streamlined data management.”
-Brett Roscoe, Senior Vice President and General Manager of Data Governance and Cloud Ops at Informatica.
9. Booz Allen Hamilton Holding Corporation (NYSE:BAH)
Number of Hedge Fund Holders: 32
Booz Allen Hamilton Holding Corporation (NYSE:BAH) is a military-defense-focused AI stock and the leading provider of artificial intelligence (AI) services to the US government. On February 1st, Truist lowered the firm’s price target on the stock to $142 from $155 and kept a “Hold” rating on the shares. The rating, issued after the company’s strong Q3 results and raised FY25 guidance, talks about a slowing procurement environment amid presidential transitions. The firm said that it believes Booz Allen’s multiple is a fair depiction of its strong position in the AI/cyber sector, but it is offset by its high exposure to federal civilian agencies amongst peers. Therefore, it remains on the sidelines and cuts its price target as a reflection of lower multiples in the group.
8. TE Connectivity plc (NYSE:TEL)
Number of Hedge Fund Holders: 44
TE Connectivity plc (NYSE:TEL) manufactures and sells connectivity and sensor solutions critical for building and operating AI infrastructure. On January 31, TD Cowen analyst Joseph C Giordano maintained a “Buy” rating on the stock and retained the price target of $165.00. The company’s strong growth in the data center sector is a significant reason for the rating. This growth has offset weaker global automotive trends, except in China where the company excels. The analyst further acknowledged that even though there is minimal incremental downside across most of the business sectors, the exact timing for growth in the transportation and industrial equipment segments remains uncertain.
7. Axon Enterprise, Inc. (NASDAQ:AXON)
Number of Hedge Fund Holders: 46
Axon Enterprise, Inc. (NASDAQ:AXON) develops, manufactures, and sells conducted energy devices (CEDs) under the TASER brand and boasts a strong suite of AI-powered products such as Axon Auto-Transcribe and Draft One. On January 24, Andrew Sherman from TD Cowen maintained a “Buy” rating on the stock with a price target of $700.00. The company boasts potential for continued growth and has a strong market positioning, leading to the buy. Investors, particularly generalists and defense analysts, are bullish on the stock. The analyst has also pointed out Axon’s promising AI product offerings, particularly the Draft One and AI Era Bundle, as significant growth drivers for the company. There are strong performance expectations for TASER and Body Cam products as well. The potential for free cash flow margin expansion and opportunities in drone technology also contribute to the optimistic outlook.
6. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 56
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products. On January 30, BMO Capital analyst Keith Bachman maintained a “Hold” rating on the stock with a price target of $280.00. Bachman’s rating has highlighted both positive and negative points related to IBM. He began by noting that IBM’s free cash flow guidance for FY25 has exceeded investor expectations, which reflects strong profit-driven growth despite potential dilution coming from the HarshiCorp acquisition.
Another positive factor is IBM is focused on enhancing its software portfolio and leadership in generative AI within its consulting services, presenting growth opportunities. Moving to concerns regarding the company, Bachman noted that the company’s revenue guidance seems conservative and below expected levels on an organic basis. The overall year-over-year revenue growth excluding the HashiCorp acquisition deal is projected around 4%, lower than previous estimates. Lastly, actual organic growth prospects for IBM’s consulting services and software growth remain uncertain. These mixed concerns and positive aspects related to IBM have led to an overall hold rating on the stock.
5. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 70
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers. On January 30, Bank of America Securities analyst Vivek Arya reiterated a “Buy” rating on the stock and set a price target of $150.00. Marvell, together with Broadcom and Nvidia, is positioned at the heart of what Arya refers to as AI’s “Sputnik moment”. The Sputnik moment aims to draw an analogy to the Cold War era when the U.S. ramped up its efforts after the Soviet Union’s surprise launch of Sputnik into space.
In light of the rise of DeepSeek in AI, the advancement is seen as a catalyst for an even bigger wave of investment and the firm’s analysts believe that hyperscalers and semiconductor companies will reap the rewards. Arya noted that DeepSeek’s advancements don’t represent a drastic change in course for the industry, but they do accelerate AI capex investments, especially in “AI compute TAM toward $500bn+” over the next several years. This positions companies such as Marvell on strong ground, with the firm noting that the “rising tide should benefit all” as the AI compute market expands significantly.
4. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 91
Vertiv Holdings Co (NYSE:VRT) is a global provider of digital infrastructure technology and services for data centers, communication networks, and commercial and industrial facilities. On January 29, TipRanks reported that Bank of America Securities analyst Andrew Obin has maintained their bullish stance on VRT stock, giving a Buy rating in a report issued on January 21. Obin’s buy rating is based on the company’s projected growth in earnings and its strategic positioning in the AI and data center markets. The analyst also believes that Vertiv’s stock may be undervalued given that the market is cautious about EPS growth and AI revenue, but maintains that 25% yearly EPS growth from 2024 to 2027 is realistic. Vertiv’s non-AI revenue streams are expected to grow steadily, and its strategic involvement in AI and broader data center infrastructure markets further positions it for future growth. Overall, its plans related to hyperscaler capex and continued revenue growth in both AI and non-AI sectors have led to the Buy rating.
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On February 2nd, Bank of America analyst John Murphy maintained a “Neutral” rating on the stock with a $490 price target. According to the firm, it is best to remain cautious considering the many challenges ahead for the stock. Transitioning to the updated Model Y, which is Tesla’s electric SUV, will lead to weeks of lost production across all factories, ultimately impacting Q1 results in terms of revenue and gross margins. According to Murphy, this shift could result in a production loss of 100,000 vehicles. With Tesla prioritizing volume growth, there will be sustained pressure on gross margins as well. The analyst has also deemed the discussion surrounding Optimus as a distraction. It said that while the humanoid robot holds “meaningful long-term potential,” the current contribution to Tesla’s valuation remains small. Moreover, since Tesla relies on imported parts, tariffs could further reduce profitability.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company known for its iPhones, iPads, and a range of other software, consumer electronics, and services. On February 1st, Maxim Group analyst Tom Forte maintained a “Hold” rating on the stock with a $215.00 price target. The firm asserts that Apple has some significant challenges ahead, but its potential for growth in Apple’s services sector offers some resilience against them. Moreover, there are some reservations about the performance of the iPhone segment and the company’s exposure to the Chinese market, which are seen as weaknesses for the company. Another factor adding to the uncertainty around the stock is the expected upgrade cycle due to AI advancements which is still unclear. These elements demonstrate both risks and promising opportunities for Apple, leading to a Hold rating.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On January 31, The Verge reported on remarks during Mark Zuckerberg’s first all-hands meeting of the year. Meta’s CEO revealed sales figures for the company’s Ray-Ban smart glasses for the first time, sharing with employees that the company sold over 1 million units in 2024. The Ray-Ban Meta smart glasses are a line of glasses by Meta initially launched in 2023. Since then, several new features have been added to its wearable technology, such as multimodal AI to process what one is seeing, hearing, and reading, along with live AI and translations.
“We basically invented the category and our competitors haven’t really shown up yet. I think we’ll probably start seeing some of that maybe a little later this year, maybe next year, but we just have this wide open field right now to run and basically introduce as many people as possible to Meta AI glasses and we should take that opportunity”.
-Zuckerberg said during the meeting.
While we acknowledge the potential of META 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 META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
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.
