OpenAI has recently said that it has removed accounts of users from China and North Korea, who the company believes were using technology for malicious purposes. These include surveillance and opinion-influence operations, it said.
In the report, the company said that several accounts were using ChatGPT to write sales pitches and debug code for a suspected social media surveillance tool. In particular, they were using the technology to advertise and augment an AI assistant capable of collecting real-time data and reports about anti-China protests in the US, UK, and other Western countries.
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Using AI tools to detect the operations, OpenAI said that authoritarian regimes use these activities and tactics. While the exact number of accounts that have been banned hasn’t been revealed, it said that in one instance, users used ChatGPT to generate news articles in Spanish, denigrating the United States. Mainstream news outlets in Latin America published these under a Chinese company’s byline.
Other instances involved using ChatGPT technology to generate resumes and online profiles for made-up job applicants, to fraudulently get jobs at Western companies. These findings come at a time when China has been seen advancing in AI by using American technology.
“This is a pretty troubling glimpse into the way one non-democratic actor tried to use democratic or US-based AI for non-democratic purposes, according to the materials they were generating themselves,”
– Ben Nimmo, OpenAI’s principal investigator on the company’s intelligence and investigations team.
Nimmo further stated that OpenAI has published such cases to shed light on how “authoritarian regimes may try to leverage US-built AI, democratic AI, against the US and allied countries, as well as their own people.”
In recent months, the company has been warning politicians in the US about the potentially growing economic and national security threats coming from Chinese-built artificial intelligence.
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. The hedge fund data is as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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10. Unity Software Inc. (NYSE:U)
Number of Hedge Fund Holders: 48
Unity Software Inc. (NYSE:U) provides a software platform that allows users to create interactive content for games, simulations, and other experiences. On February 21, Benchmark upgraded the stock to “Hold” from Sell with no price target. The firm upgraded the stock stating that many concerns that it had for the stock are “either materialized or now appear to be longer-term potential realizations.”
Nevertheless, one major concern that remains is the secular challenges in game development from artificial intelligence. The firm cautioned that evolving as a real competitor in the mobile game market will be “exceedingly difficult” for Unity. This is because of AppLovin’s (APP) consistent success and significant lead.
9. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 63
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On Friday, February 21, RBC Capital analyst Rishi Jaluria maintained an “Underperform” rating on the stock with a $40 price target.
The firm noted how Palantir shares fell for the two trading days before Friday, largely because the Chief Accounting Officer resigned as communicated in the 10-K. The other two reasons that the firm quoted were reports about planned defense budget cuts and the adoption of a new trading plan by its CEO that allows for the sale of up to 10M shares through September 12, 2025.
The Trump administration plans to cut the US defense budget by 8% annually over the next five years, a setback for the company which receives over 40% of its revenue from government contracts. While the company’s growth is challenged by these cuts and shifting military funds, analysts argue that its AI-driven efficiencies could open up new investment avenues. Nevertheless, Jaluria maintains that the firm sees “further downside from here”.
8. Quanta Services, Inc. (NYSE:PWR)
Number of Hedge Fund Holders: 67
Quanta Services, Inc. (NYSE:PWR) is an infrastructure company that provides solutions for the electric and gas utility, renewable energy, communications, pipeline, and energy industries. On Friday, February 21, Roth MKM initiated coverage of the stock with a “Buy” rating and a $350 price target. The analysts told investors in a research note that Quanta is an engineering, procurement, and construction company offering infrastructure solutions, and it is best positioned for data centers and artificial intelligence.
“Power is the key bottleneck for the AI/datacenter theme, and PWR is one of the best-positioned companies to support the acceleration of the electrical infrastructure build-out with its leading market share in electric utility and renewables.”
7. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 74
Twilio Inc. (NYSE:TWLO) is a leading cloud communications platform-as-a-service (CPaaS) company. On February 24, Morgan Stanley analyst Meta Marshall upgraded the stock to “Overweight” from Equal Weight with a price target of $160, up from $144. As evident from its recent channel checks, the firm stated that increased cross-selling has been responsible for Twilio’s execution toward double-digit growth and operating margin outperformance. The upgrade follows a recent sell-off of Twilio shares, around 20%, which the analyst said provides an attractive entry point.
After Twilio’s analyst day in January, the firm has also particularly acknowledged Twilio’s potential for growth and profitability. Conversation with a channel partner and customer has further highlighted how the company’s unique platform, improved go-to-market strategies in the second half of 2024, and the potential for new products and artificial intelligence to drive growth, have been the reason behind the firm’s optimism.
6. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 107
Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally. On February 24, the South China Morning Post reported that Alibaba will be investing at least 380 billion yuan (US$52.4 billion) in its cloud computing and artificial intelligence (AI) infrastructure over the next three years. The company wants to “advance its cloud computing and AI infrastructure”, a company statement said.
The investment, demonstrating Alibaba’s commitment to AI, will be in China’s largest-ever computing project financed by a single private business. According to the company, the plans underscore its “focus on AI-driven growth and its role as a leading global cloud provider”.
5. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 120
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. On February 21, Amit Daryanani from Evercore ISI maintained a “Buy” rating on the stock with a price target of $150.00.
Vistra Corp. is an independent power producer tied to data electricity demand. At the end of January 2025, the stock lost more than 20% after the emergence of DeepSeek’s low-cost AI models. Their emergence had investors concerned over the electricity demand from data centers, leaving questions in their minds regarding whether AI will require as much power as previously anticipated.
4. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 162
Salesforce Inc (NYSE:CRM) is a cloud-based CRM company that has gained popularity after the launch of its AI-powered platform called Agentforce. On February 24, Morgan Stanley analyst Keith Weiss maintained a “Buy” rating on the stock and set a price target of $405.00. Weiss’ buy rating stems from Salesforce’s attractive valuation and strong positioning in the GenAI market. Even though there are currency fluctuations and management challenges, the analyst is very optimistic about the company’s long-term prospects.
The firm also noted how expectations may be toned down in the short run as Robin Washington, the new CFO, may adopt a prudent approach to guidance. Moreover, the strategic acquisitions of Own Company and Zoomin will likely contribute positively in fiscal year 2026. There has also been significant interest in the company’s AI-powered Agentforce, reflecting on its potential for considerable customer engagement and deal closures in the coming years. Given these reasons, Weiss considers the current valuation as “undemanding” compared to peers.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. On February 21, the company announced that Apple Intelligence, its personal intelligence system, will soon be available in more languages, including French, German, Italian, Portuguese (Brazil), Spanish, Japanese, Korean, and Chinese (simplified) and localized English for Singapore and India.
The company said that these new languages will be accessible in almost all regions around the world with the release of iOS 18.4, iPadOS 18.4, and macOS Sequoia 15.4 in April, and developers can start to test these releases. It further stated that this will be the first time iPhone and iPad users in the EU will have access to Apple Intelligence features and that Apple Intelligence will be expanding to a new platform in U.S. English with Apple Vision Pro.
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. One of the biggest analyst calls for Friday, February 21, was for Nvidia Corporation. Morgan Stanley reiterated the stock as “Overweight”, stating that “another pivotal moment for AI” is coming when the company reports earnings next week.
“NVIDIA remains the mainstay for whether AI stocks advance or move lower.”
With the company reporting earnings on February 26, investor sentiment isn’t as ecstatic as the previous year. However, some analyst firms such as Morgan Stanley and Keybanc are still highly optimistic about the stock. A day before the Morgan Stanley rating, KeyBanc raised the firm’s price target on the stock to $190 from $180 and kept an “Overweight” rating on the shares.
The firm said that even though concerns remain regarding constraints associated with the ramp of GB200 NVL servers, the company is still likely to report strong Q4 results.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 338
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. On Friday, February 21, TD Cowen reiterated the stock as “Buy”, stating that its analysis has shown how Amazon Web Services is well positioned for AI.
“We Estimate AWS Could Generate ~4x Incremental GenAI Revenue per Incremental GenAI Capex (on avg) from ’26-’30.”
Revenue forecasts for the firm reveal how the firm estimates AWS’s GenAI revenue to be approximately $2.8 billion in 2024. This will rise to $7.1 billion in 2025 and reach $56.3 billion by 2030, representing a compound annual growth rate (CAGR) of 51% from 2025 to 2030.
While we acknowledge the potential of AMZN 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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