In this article, we discuss the 10 AI news you shouldn’t miss.
AI presents significant benefits for investors, primarily through increased efficiency, automation, and the potential for high returns in specific sectors. It leads to higher profitability and efficiency. For example, AI-driven automation enhances efficiency in trading, portfolio management, and operations, helping investors achieve better returns. According to a report by PwC, financial institutions that adopt AI could reduce operational costs by 22% in the short term, which directly improves profitability. Hedge funds, for instance, have seen an increase in efficiency, particularly in areas such as algorithmic trading and risk management. A report by McKinsey suggests that AI-driven trading algorithms can outperform traditional investment strategies by identifying patterns and trends that are hard for human analysts to spot. This advantage could increase returns by 2-3% annually, which can compound into significant gains over time.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
AI tools also provide real-time data analytics and insights, giving investors a competitive edge in making informed decisions. According to a study by Deloitte, 63% of financial executives believe that AI can dramatically improve investment decision-making by providing better market forecasts and risk assessments. AI algorithms can analyze vast amounts of data quickly, allowing investors to capitalize on short-term market movements with greater precision. Similarly, the explosion of generative AI and machine learning has led to a surge in stocks related to AI technology. Several AI-focused exchange traded funds (ETFs) have outperformed the broader market, providing investors with opportunities for growth. For instance, the Global X Robotics and Artificial Intelligence ETF has returned close to 30% in the past year, significantly outperforming traditional tech funds.
Tom Kehoe, a top researcher at Alternative Investment Management Association, an investment firm in the United Kingdom, has emphasized that AI is poised to revolutionize investment management, offering greater efficiency and precision in decision-making. Similarly, Larry Fink, the CEO of investment titan BlackRock, believes that AI will be a transformative force for wealth management, allowing firms to personalize portfolios and scale operations efficiently, which in turn create immediate value for investors. Fink was quoted by Financial Times as saying that the collapse of productivity had been a central issue in the global economy. Per Fink, AI had the huge potential to increase productivity, and transform margins across sectors, as it may be the technology that brought down inflation.
Read more about these developments by accessing Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
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Our Methodology
For this article, we selected the latest and most important AI news by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The stocks are sorted in ascending order of the number of hedge funds that have stakes in them, as of Q2 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
AI News You Shouldn’t Miss
10. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 47
Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high performance server and storage solutions based on modular and open architecture. The company recently unveiled new servers that are based on Xeon processors made by chipmaker Intel. Per reports, the new servers have completely re-designed architectures, including 10U and multi-node form factors that support next-generation GPUs and higher CPU core densities. They also have updated memory slot configurations with 12 memory channels per CPU and new MRDIMMs, offering highest bandwidth and lowest latency. Charles Liang, the CEO of the firm, said that the new servers would help his firm to create customized solutions with complete rack integration services and in-house developed liquid cooling solutions.
9. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. The company recently announced the launch of the new Xeon 6 processors with performance cores and AI accelerators, primarily targeted towards enterprise AI systems. The chipmaker wants to meet the growing demand for high-performance, cost-effective AI infrastructure with these latest additions to the data center portfolio. The Intel Xeon 6 processor is designed to efficiently manage compute-intensive workloads, offering double the performance of its predecessor. In parallel, the Intel Gaudi 3 AI Accelerator is optimized for large-scale generative AI, equipped with 64 Tensor processor cores and eight matrix multiplication engines for enhanced deep neural network computations.
8. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 88
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. The expanded role of the firm in the AI world has helped push it back into contention as one of the leaders in the tech world. The company recently joined the S&P 500, a list of the biggest companies in the world, ending a more than a decade long absence from the benchmark index. Dell Technologies Inc. (NYSE:DELL) is one of the most balanced AI plays in the market today, having returned more than $9 billion to investors in the form of share buybacks and dividends in the past year.
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. Lisa Su, the CEO of the firm, recently said that graphic processing units (GPUs) might not be the architecture of choice for companies working on AI within the next five years because they did not offer the level of programmability tech firms wanted. The CEO was contextualizing earlier statements in which she said that GPUs right now were the architecture of choice for large language models, because they were very efficient for parallel processing. Su further noted that the next phase would not be a transition away from GPUs but rather a broadening beyond them. Custom AI chips, tailored to company-specific AI tasks, are already gaining traction in the tech world, highlighting the broadening away from GPUs.
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. Latest reports suggest that the company is mulling plans to partner with electronics giant Samsung to build mega chip factories in the United Arab Emirates. These factories would help satisfy soaring demand for artificial intelligence computing, per The Wall Street Journal. Senior executives from the company have already visited sites in the Middle Eastern country for the purpose. Such projects cost more than $100 billion to complete, and TSM is already setting up such facilities in the United States, Japan, and Germany. The UAE has in the past few years tried to diversify away from a petrochemical economy, opening up to investments in areas like AI.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 165
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. Latest reports reveal that social platform Snapchat has expanded an existing partnership with Google Cloud to include generative AI features offered by the latter into the My AI chatbot offered by the former. According to the report, the chatbot will leverage the multimodal capabilities of Gemini AI by Google to enable the chatbot to understand different types of information, like text, audio, images, and videos. Snap has used ChatGPT by OpenAI, backed by Microsoft, for the My AI chatbot, but is now transitioning to the Google model in a bid to allow the chatbot also to process images and videos. Google claims that since the Snapchat integration, the chatbot saw over 2.5x as much engagement within the US.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. The stock has ticked upwards in the past few days after a prolonged downward slide following the release of earnings that were overshadowed by slow growth and production delays to the latest Blackwell chips. However, recent remarks by NVIDIA CEO Jensen Huang, during the Goldman Sachs Communacopia + Technology Conference, in which he said that the new chips were in full production and the firm expected to start shipping them in the fourth quarter and ramp up from there. The start of Blackwell shipping would translate to around $10 billion in revenue for the chip firm, according to chip analysts.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. The company is gearing up to host the Meta Connect event, an annual developer event where it unveils new AI products. Rumors indicate, according to news agency Reuters, that Meta will announce that it has signed deals with actors like Judi Dench, Kristen Bell and John Cena to give voice to the Meta AI chatbot. Meta chief Mark Zuckerberg is also expected to unveil new artificial intelligence features for WhatsApp, Facebook, and Instagram, as well as new smart glasses and mixed reality goggles at the event.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. Satya Nadella, the CEO of the firm, recently spoke at an event in Mexico City, announcing that his company would invest $1.3 billion over the next three years to build up AI infrastructure in the country. In a statement issued on the potential announcement, Microsoft revealed that the investment would go toward improving connectivity and boosting the adoption of AI technology by small and medium-sized businesses. The firm plans to reach 5 million Mexicans and 30,000 SMBs in three years, per the initial plans. Microsoft and communications company Viasat are also working to bring the internet to more than 150,000 Mexicans previously without cellular connectivity by the end of 2025.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. Deidre Bosa, a reporter for news platform CNBC, recently claimed that Amazon-backed AI startup Anthropic is on track to generate $1 billion in revenue this year, up 1,000% year-on-year. The increase in revenue represents the explosive growth opportunity in AI, a tech trend that started gaining widespread traction in 2023. Bosa claims that despite the revenue jump, the gross margin of the firm is thinner than a high-quality firm, coming in at only 38%, but that likely has to do with higher upfront costs in developing AI models.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ: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 Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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