In this article, we will take a detailed look at the 10 AI Stocks Investors Are Monitoring After Tariff Shock.
The tariff wars and a potential slowdown in AI spending threw water on investors’ AI trade plans and outlook. However, many analysts believe the broader outlook of the industry is still strong.
Ben Bajarin, Creative Strategies CEO, in a latest program on CNBC explained why he is still bullish on the Jensen Huang-led AI giant:
“I think when you look at the technology roadmap … in terms of what they’re doing with Grace Blackwell and Blackwell systems going forward, it’s going to be very, very hard for others to compete. I think they were extremely bullish about how much of the industry—not just the traditional, you know, cloud servers but AI factories and this entirely new infrastructure—and how it is being kind of redeveloped for the AI era. Like, it’s not being built on other things. And so I think when you look at the ecosystem that’s grown around them, they’re deeply entrenched. It doesn’t have any sign of that changing.”
Bajarin said that he sensed “frustration” in Jensen Huang’s tone as the executive feels Wall Street is not modeling the growth potential his company’s AI products truely have.
“And he seems to think that nobody is modeling that in or really understands it. So there’s the—we kind of have a sense of what they’ll sell just product-wise here in 2025, which is where I agree with you. Hard to surprise to the upside to move the stock, but I think he is signaling people don’t understand the magnitude of this opportunity. And I think that’s worth unpacking because there is a lot of growth ahead.”
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
For this article, we picked 10 technology stocks Wall Street is closely watching these days. With each stock, we have mentioned the number of hedge fund investors. 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).
10. Palantir Technologies Inc (NASDAQ:PLTR)
Number of Hedge Fund Investors: 41
Doug Clinton from Intelligent Alpha said in a latest program on Schwab Network that while he believes Palantir Technologies Inc (NASDAQ:PLTR) is an “incredible” company, the stock’s valuation is hard to justify. The analyst said his AI models
“We use AI to do stock analysis and our portfolio management. We don’t currently own Palantir so AI, at least our models, don’t like Palantir enough to own it. As a human stock investor and someone who’s very interested in AI-related stocks, I would say I neither love it nor hate it, nor am I sick of it. I think that it’s an incredible company. They’ve had tremendous business momentum—right, 50% year-over-year growth in the US. The issue is it just trades at 50 times revenue, and that’s a hard multiple to justify.”
Baron Asset Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“Two software stocks that the Fund did not own, Palantir Technologies Inc. (NASDAQ:PLTR) and AppLovin Corporation, each gained more than 100% and accounted for 52% of the Benchmark’s gain during the quarter. At year end 2024, Palantir was valued at approximately 200 times its expected 2024 earnings, while AppLovin was valued at 80 times. The market cap of each exceeded $100 billion, and the two stocks represented nearly 8% of the Index. Neither company met our criteria for investment. The total impact on relative performance from Palantir and AppLovin was about 7 times higher than we have seen historically for two securities that are unique to the Benchmark, showing just how unparalleled the event was and something that we believe is unlikely to be repeated.”
9. HubSpot Inc (NYSE:HUBS)
Number of Hedge Fund Investors: 63
Steve Koenig from Macquarie explained in a latest program on Schwab Network the new growth catalysts for HubSpot Inc (NYSE:HUBS) amid the company’s new AI features and pricing strategy:
“What’s going to continue to differentiate them is simply their business strategy, their focus on a unified simple product to use with all the CRM pillars: sales, service, marketing, commerce, particularly strong in marketing. A unified product that’s easy for smaller and midsize companies to deploy, and I think we’ve seen good interaction with that. That’s, I think, that’s continuing.
They add more subscription revenue every year than the year before. That’s been going on for three years. We think that growth vector is going to continue. And lastly, I would just say catalysts this year include kind of stabilization. We’ve seen some downgrade activity over the last couple years, and I think there’s less pressure on downgrades now. That’s pretty clear, and they’re making a pricing model change, which effectively is going to end up raising their prices a bit across the customer base. So, I think all those things can contribute to significant revenue upside this year, which we would see as the most likely catalyst for outperformance.”
Artisan Mid Cap Fund stated the following regarding HubSpot, Inc. (NYSE:HUBS) in its Q3 2024 investor letter:
“Along with Dexcom and Celsius, a notable trim in the quarter wasHubSpot, Inc. (NYSE:HUBS). HubSpot is a leading cloud-based customer relationship management software provider for small-to-medium businesses. The stock was a top performer in 2023 as it meaningfully improved its profitability after several years of heavy investment. However, as we mentioned earlier in this letter, the environment for cloud software providers has been challenging in 2024 as macroeconomic pressures have impacted customer spending. Our long-term conviction remains intact, but we reduced the position due to near-term uncertainty. Meanwhile, we are encouraged by the company’s efforts to leverage AI advances to help internally (e.g., more efficient software development) and externally (e.g., new agent-based apps to help customers extract more value out of its products).”
8. Crowdstrike Holdings Inc (NASDAQ:CRWD)
Number of Hedge Fund Investors: 74
Nathaniel Bradley from Datavault AI said in a recent program on Schwab Network that Crowdstrike Holdings Inc (NASDAQ:CRWD) has strong tailwinds amid the demand for its cybersecurity products.
“Few companies have such prevailing winds at their back as CrowdStrike has. This is a, you know, a situation with the fishing attacks and the malware attacks and any small to mid-size business has to throw up their hands at this point and look to larger corporations to provide packages that are affordable in providing these cybersecurity threats and putting them down. When you look at the opportunity behind Crowdstrike, it’s in a basket of organizations that have focused around, you know, creating this opportunity for investors in participating in the process of securing AI and making AI a force to be reckoned with in the future is going to require it to be safe and secure.”
TimesSquare Capital Management U.S. Focus Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q4 2024 investor letter:
“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that are growing their shares of corporate IT budgets. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) provides cybersecurity solutions. Its unified platform offers cloud-delivered protection of endpoints, cloud workloads, identity, and data. The company delivered solid fiscal third quarter results that exceeded the high end of guidance and boosted its share price by 22%. Notably, there was resilient gross revenue retention that highlights CrowdStrike’s best in class product offering. New business win rates remained consistent and trending upwards. Following its mid-July outage, many customers have upgraded to the Falcon Flex program, which enables them to adopt a broader product offering.”
