In this article, we discuss 10 AI news you should not miss.
Insights on AI’s Potential and Its Evolving Capabilities
AI is rapidly advancing, with significant strides being made toward achieving more powerful and capable systems. While challenges and limitations have arisen along the way, the field is still evolving and finding innovative solutions to overcome obstacles. As AI systems grow increasingly capable, they are expected to perform tasks with human-level proficiency which can create new opportunities for efficiency and problem-solving.
In an interview with CNBC, Dario Amodei, co-founder and CEO of Anthropic, discussed the ongoing developments in AI and emphasized that while past challenges have seemed like barriers, they were often overcome through innovations. He expressed confidence that AI is on track to achieve powerful capabilities in the next few years.
Amodei highlighted Anthropic’s progress in creating AI that can autonomously operate computers, which is a step toward the broader goal of building a “virtual collaborator” by 2025, which would assist with different tasks. Regarding competition, he noted that while processing power is crucial, it’s not the only factor, as each AI model has its unique strengths. He mentioned Claude’s popularity, especially for its personable interactions, while mentioning a study where Claude outperformed other models in gaining radiologists’ trust.
AI in Software Development and the Path to AGI
Amodei’s vision for Anthropic also aligns with the rapid advancements in AI that are transforming software development. According to the report: The second wave of AI coding is here, by MIT Technology Review, generative AI is quickly advancing in software development, especially in coding. Tools like GitHub Copilot and AI chatbots such as Claude and ChatGPT are already helping millions of developers with tasks like debugging and code generation. Moreover, startups like Zencoder and Poolside are taking this further as they are creating systems that can prototype, test, and fix code. These tools aim to go beyond autocomplete by understanding both the syntax and functionality of code to mimic the human coding process.
While some believe AI could bring us closer to artificial general intelligence, others argue that large language models are not suited for tasks requiring precise logic. Companies like Merly are focusing on intermediate representations of code to address this. The report states that, as AI tools evolve, developers will increasingly rely on them for faster prototyping, bug fixing, and code generation and shift their roles from coders to managers of AI-driven processes. This could reduce the need for large teams of programmers in the future.
For this article, 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.
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 You Should Not Miss
10. VCI Global Limited (NASDAQ:VCIG)
Number of Hedge Fund Holders: 1
VCI Global Limited (NASDAQ:VCIG) provides business consulting, technology solutions, corporate advisory, AI services, and real estate management to SMEs, government agencies, and large corporations.
On January 21, VCI Global Limited (NASDAQ: VCIG) secured an additional US$100 million investment from Alumni Capital LP, building on a previous US$30 million commitment in 2024. The funding will help expand VCI Global’s AI operations, with US$50 million allocated to the area, and support renewable energy projects. The company’s AI investment arm is VC AI Limited and it oversees a portfolio of companies, including those in AI systems, cybersecurity, and large language models. The firm also plans to invest up to US$50 million in renewable energy projects across Southeast Asia and Europe to generate US$200 million in revenue over the next 20 years. VCI Global expects these efforts to drive substantial revenue growth, building on past successes, including a 145% revenue increase in 2023 and 44% growth in the first half of 2024.
9. Oddity Tech Ltd. (NASDAQ:ODD)
Number of Hedge Fund Holders: 18
Oddity Tech Ltd. (NASDAQ:ODD) develops AI-driven beauty and wellness products under IL MAKIAGE and SpoiledChild and operates a biotechnology center, Oddity Labs.
On January 21, Oddity Tech Ltd. (NASDAQ:ODD) announced that it acquired the tech intellectual property of Fionic1, a fintech company known for its advanced AI modeling capabilities. As part of the acquisition, Fionic’s co-founder Asaf Nurick and his AI R&D team have joined Oddity. Their expertise will improve Oddity’s AI models and algorithms for consumer applications. Fionic’s specialized algorithms are effective in handling complex, real-time data, which will help Oddity advance its AI-driven solutions. The acquisition is not expected to impact Oddity’s financial position, liquidity, or earnings outlook for 2025.
8. Riot Platforms, Inc. (NASDAQ:RIOT)
Number of Hedge Fund Holders: 19
Riot Platforms, Inc. (NASDAQ:RIOT) is a Bitcoin infrastructure company that is also exploring opportunities in AI.
On January 21, Riot Platforms (NASDAQ:RIOT) announced the launch of a formal evaluation to explore the potential use of 600 MW of unused power capacity at its Corsicana Facility for AI and high-performance computing (HPC) applications. The company has engaged consultants to assess this opportunity and is accelerating its outreach to potential AI/HPC partners. As part of this strategy, Riot is halting the previously planned Phase II Bitcoin mining expansion at the facility. The shift will reduce the company’s expected Bitcoin mining hash rate capacity growth for 2025, from 46.7 EH/s to 38.4 EH/s, and lower capital expenditures at Corsicana by $245 million. Riot is continuing to develop the substation to support the additional power capacity but it is uncertain whether the conversion to AI/HPC will be financially viable or lead to suitable partnerships.
7. Genpact Limited (NYSE:G)
Number of Hedge Fund Holders: 31
Genpact Limited (NYSE:G) is a global professional services firm using expertise in business, digital operations, data, and AI to transform leading enterprises worldwide.
On January 21, Jefferies upgraded Genpact (NYSE:G) from Hold to Buy and raised its price target to $55 from $44, expecting growth in its Data-Tech-AI and Digital Operations segments to continue accelerating. The Data-Tech-AI segment, which makes up 47% of revenues, is forecasted to see high single-digit growth by the end of FY2024, up from low single digits the previous year. The firm noted that the growth rate is expected to increase further in 2025 and 2026, driven by rising discretionary spending and AI-related growth, potentially reaching a low double-digit pace by 2027.
6. Semtech Corporation (NASDAQ:SMTC)
Number of Hedge Fund Holders: 32
Semtech Corporation (NASDAQ:SMTC) designs and markets analog and mixed-signal semiconductors, IoT solutions, and advanced algorithms for industrial, medical, and communications applications globally.
On January 17, UBS initiated a Buy rating on Semtech (NASDAQ:SMTC) with an $85 price target. The coverage is followed by Semtech’s CopperEdge product being integrated into Nvidia’s Blackwell platform, which positions the company for AI data center networking growth. The CopperEdge opportunity alone is valued at $100 million, with further potential from AMD, hyperscalers, and LPO units.
Apart from data centers, Semtech’s analog businesses are expected to benefit from smartphone growth and a recovery in industrial markets. UBS believes the company’s Signal Integrity segment growth estimates for FY25-26 are too low, and recent refinancing and potential portfolio changes could lead to a higher valuation.
5. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) designs, develops, and licenses CPU products, system IPs, and related technologies for diverse markets, including automotive, IoT, and consumer devices.
On January 17, Barclays analyst Tom O’Malley increased the price target for Arm (NASDAQ:ARM) to $155 from $145 while maintaining an Overweight rating, and highlighted the company’s strong position in the semiconductor sector. The firm’s 2025 outlook focuses on artificial intelligence, emphasizing a divide between leaders and laggards. Barclays favors stocks with proprietary serializer/deserializer technology but is cautious about certain sectors like semiconductors, PC, and handsets, expecting recovery in these areas to take more time.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) specializes in creating semiconductors, providing processors and graphics solutions for gaming, data centers, and embedded systems, with an emphasis on high-performance computing tailored for AI use cases.
On January 21, Citi lowered AMD’s price target to $175 from $200 while maintaining a Buy rating ahead of its Q4 earnings. The firm expects consensus estimates for semiconductors to drop due to weaker demand in PC, automotive, and industrial markets. However, it expects strong demand in data centers, AI, and communication segments. Citi is optimistic about AMD, as it mentioned potential upside from AI sales, and foresees eventual inventory replenishment in the analog market after significant sales declines.
3. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) produces integrated circuits and semiconductor devices, offering a wide range of wafer fabrication processes for various industries, including computing, smartphones, IoT, and automotive.
On January 17, Taiwan Semiconductor Manufacturing Company’s (TSMC) CEO, C.C. Wei said that the company’s new U.S. plant in Arizona is facing significant delays and challenges due to complex compliance issues, local construction regulations, and supply chain gaps, Reuters reported. The process of obtaining permits has taken twice as long as in Taiwan, making it unlikely that the U.S. plant will receive the most advanced chip technology before Taiwan. Despite these issues, including a shortage of skilled workers and high chemical supply costs, Wei expressed confidence that the Arizona plant would eventually produce high-quality chips. TSMC has received strong support from the U.S. government as part of efforts to diversify chip production outside Asia, the report states.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOGL) offers AI-powered solutions across multiple platforms, enhancing cloud services, business tools, and consumer products, with a strong emphasis on advancing AI research.
Isomorphic Labs, a spin-off of Google DeepMind and a subsidiary of Alphabet (NASDAQ:GOOGL) has planned to start clinical trials for AI-designed drugs by the end of this year, according to CEO Demis Hassabis. Bloomberg reported on January 21 that the company aims to reduce the drug discovery timeline from decades to weeks, using advancements like AlphaFold, which models complex molecular structures such as proteins, DNA, and RNA. Hassabisa also highlighted partnerships with pharmaceutical firms and while he was optimistic about AI’s potential in drug development, he noted that achieving artificial general intelligence could take another five years and require significant breakthroughs.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) uses AI to advance its shopping experience, entertainment offerings, and operational effectiveness. It has also invested in AI through initiatives like Anthropic, AWS partnerships, and Tranium, which boosts its competitive position in generative AI development.
On January 21, Raymond James raised its price target for Amazon (NASDAQ:AMZN) to $260 from $230, maintaining a Strong Buy rating. The firm is optimistic about the internet sector, especially Amazon, and sees the upcoming year as key for the commercialization of GenAI. The firm believes capital expenditure concerns may ease as AI use cases expand. While some uncertainties remain, such as tariffs and AI regulation, the overall macroeconomic outlook is more stable.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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