President Donald Trump has only recently announced the Stargate initiative, claiming it to be “the largest AI infrastructure project by far in history”. According to him, the project would help keep “the future of technology” in the US. However, a Bloomberg report reveals how Elon Musk is openly questioning whether the companies that have joined Trump’s announcement, promising hundreds of billions of dollars in artificial intelligence, could follow through on them.
READ NOW: 10 Buzzing AI Stocks on Latest News and Ratings and 11 AI Stocks That Should Be On Your Watchlist
Could this be a sign of an early difference of opinion within the White House? Only hours after the announcement, Musk took to his platform, X, to reveal that the companies don’t have the funds.
“They don’t actually have the money. SoftBank has well under $10B secured. I have that on good authority”.
Contrary to Musk’s claims, Sam Altman, CEO of OpenAI, had his own statements to make on X. Altman posted that Musk’s claims are wrong and that he has been upset because this initiative could compete with his Elon Musk’s own AI endeavors.
“Wrong, as you surely know. Want to come visit the first site already under way? This is great for the country. I realize what is great for the country isn’t always what’s optimal for your companies, but in your new role I hope you’ll mostly put US first”.
— Sam Altman
Musk is leading Trump’s government efficiency efforts and will also be advising him on spending. The billionaire, ever since leaving OpenAI’s board in 2018, has been engaged in a feud with Altman. Sources close to Stargate also reveal that they are not sure how Musk has arrived at the figure. According to them, the company is well-positioned to deploy $100 billion.
“I think this will be the most important project of this era. We wouldn’t be able to do this without you, Mr. President”.
-Sam Altman.
In light of this, Bloomberg revealed that Trump has, on several occasions, promoted private-sector investment promises that never went on to materialize. One of these failed promises has been the failed Foxconn factory project which Trump deemed as the “Eighth Wonder of the World”. No wonder the Stargate announcement has sparked skepticism regarding the project’s completion.
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 young man in front of a mural of financial services, representing the new generation of investors.
10. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 17
C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company that builds and operates enterprise-scale AI applications. On January 22, the company announced a strategic partnership with McKinsey & Company, a global management consulting firm, in order to help prospects and clients speed up their enterprise-scale AI transformations. The collaboration will leverage the technical expertise of McKinsey’s AI arm, QuantumBlack, with C3 AI’s Enterprise AI software applications, helping companies improve their operations and find growth opportunities. Together, the joint offering will ensure companies are successful in their Enterprise AI deployments, offering them unmatched speed, transformative impact, reduced risk, as well as accelerated AI adoption.
“In close collaboration with McKinsey & Company and its AI arm, QuantumBlack, and C3 AI, customers are assured of success in their Enterprise AI deployments. Organizations that choose to partner us can have confidence in ROI with a focus on managing risk. This is how you win with AI”.
-Thomas M. Siebel, Chairman and CEO, C3 AI.
9. DigitalOcean Holdings, Inc. (NYSE:DOCN)
Number of Hedge Fund Holders: 22
DigitalOcean Holdings, Inc. (NYSE:DOCN) is a public cloud provider that can support AI workloads. On January 22, the company unveiled its new GenAI Platform at the company’s developer conference, Deploy 25, which was hosted in Austin, Texas. This GenAI platform will help customers build and deploy AI agents using foundational models from third-party providers and that too, without the need for advanced AI or machine learning expertise. Suitable for both beginners and seasoned experts, businesses can leverage the platform to build chatbot experiences that support several real-world use cases such as document analysis, intelligent customer service, automated workflows, interactive conversational agents, and more. The move marks DigitalOcean Holdings’ efforts to expand its AI strategy in 2025 and beyond, helping technology companies harness data and implement AI with ease. The GenAI platform is now available to customers.
“As AI continues to enhance business strategies, it is essential to have a partner like us that is evolving with technology and making AI accessible for users. Generative AI is an evolving concept, but our team has worked tirelessly to create an easy-to-use platform that seamlessly integrates with our customers’ existing infrastructure and has a low barrier to entry for developers at any expertise level”.
-Bratin Saha, Chief Product and Technology Officer at DigitalOcean.
8. Zeta Global Holdings Corp. (NYSE:ZETA)
Number of Hedge Fund Holders: 31
Zeta Global Holdings Corp. (NYSE:ZETA) operates an AI-driven marketing technology company. On January 22, the company announced its very first official brand campaign, “Achieve the Impossible™”. The brand campaign aims to highlight how marketers can unlock endless possibilities with Zeta, inspiring them to embrace artificial intelligence and achieve their biggest aspirations. In particular, the campaign highlights Zeta’s AI-powered marketing solutions, which enable hyper-personalization, seamless omnichannel experiences, predictable ROI, and business growth. The campaign positions Zeta’s AI-powered marketing platform as an essential tool in marketing that guarantees precision, productivity, and performance. Even the most imaginative marketing goals can become a possibility with Zeta.
“Marketing is at an inflection point, and AI is no longer just a trend—it’s the driving force behind making the impossible achievable. This groundbreaking campaign is part of our strategic vision to move from ‘Zeta who?’ to ‘why Zeta?’ and eventually to ‘must have Zeta.’ This launch reaffirms Zeta’s role as a leader in AI marketing innovation”.
-David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta Global.
7. Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Holders: 43
Teradyne, Inc. (NASDAQ:TER) creates automated test systems and robotic solutions. On January 22, the company’s division Teradyne Robotics, announced that it has entered into a strategic partnership with Analog Devices, Inc. (ADI), a global semiconductor leader. The partnership aims to accelerate the development and use of advanced robotics. The collaboration will allow the companies to develop and deploy robots, AI, and software to support ADI’s goal of improving automation, thereby improving safety, efficiency, and overall operations. In particular, Teradyne’s Universal Robots (UR) and Mobile Industrial Robots (MiR) will be integrated with ADI’s system-level electronics expertise for bringing state-of-the-art robotics and automation solutions to the market.
“By combining Teradyne Robotics’ market-leading UR Cobots and MiR AMRs with ADI’s extensive system-level electronics expertise, we are poised to revolutionize the robotics and automation landscape. This partnership will enable us to deliver state-of-the-art solutions that drive innovation and efficiency throughout the semiconductor lifecycle. In doing so, we will also be applying robotics applications and technologies, which will further advance robotics in additional sectors ripe for automation”.
-Ujjwal Kumar, Group President, Teradyne Robotics.
6. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On January 23rd, analyst Daniel Ives of Wedbush maintained a “Buy” rating on Palantir Technologies and raised the price target from $75 to $90. The buy rating is anticipated to play a positive role in Palantir’s growth trajectory up to 2025. The success of its AI strategy is exemplified by its strong return over the past year, around 343%. The firm is optimistic that the company’s strategic positioning in the AI sector is going to make it a big player as demand for AI soars, emulating the success of companies such as Oracle or Salesforce. Additionally, Ives also noted a major opportunity for Palantir’s Artificial Intelligence Platform, also known as AIP. He said that there is a strong potential for revenue growth in both commercial and federal markets. The firm also noted that the market is yet to realize the company’s ability to deliver valuable AI-driven solutions across various industries. In addition, with Palantir’s engagement with the US government and its increasing federal AI investments, the company is favorably positioned to benefit from government spending initiatives that are particularly focused on AI infrastructure development.
5. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 56
International Business Machines Corporation (NYSE:IBM) is a multinational technology company offering consulting services and a suite of AI software products. On January 22, the company availed the opportunity at the World Economic Forum 2025 in Davos to announce its collaboration with e&, a global technology group, to develop an AI and genAI governance solution. This collaboration will be leveraging IBM’s watsonx.governance enterprise AI and data governance platform, together with IBM Consulting’s expertise in AI implementation, for helping e& scale AI responsibly and track ROI. The new AI governance solution offers advanced features like automated risk management, compliance monitoring, and real-time performance analysis, helping e& mitigate risks, detect biases, and address regulatory standards throughout the AI lifecycle.
“IBM watsonx empowers organizations like e& to navigate the complexities of AI governance. By integrating automation, real-time monitoring, and centralized oversight, we are addressing key governance challenges and reducing risks associated with AI. Strengthening our long-standing partnership with e&, this milestone serves as a catalyst for responsible AI innovation”.
-Shukri Eid, General Manager, Gulf, Levant & Pakistan at IBM.
4. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 60
Accenture plc (NYSE:ACN) offers strategy and consulting services. On January 22, the company announced a strategic investment in Workera, a leading AI-powered skills intelligence platform, thereby strengthening their alliance. The alliance includes Accenture becoming a reseller of Workera’s solutions, as well as a technology integration whereby Workera’s official skills intelligence layer is embedded within Accenture’s LearnVantage learning platform. Together, the partnership will allow the companies to keep up with the rapidly changing job market, particularly in high-demand fields like AI, machine learning, and cloud computing where skills change at an unprecedented pace. The collaboration builds on Accenture’s decision to work with Workera back in April 2024 as a skills partner for LearnVantage, the company’s platform that aims to address the rapidly shortening half-life of technical skills.
“The rise of generative AI has amplified our clients’ need for training and upskilling their people in cloud, data, and AI as they build their digital core, which is essential for reinvention. By integrating Workera into Accenture LearnVantage, we’re equipping enterprises with the tools to personalize learning journeys and optimize workforce capabilities using skills intelligence data. This partnership, including our recent investment, underscores Accenture’s commitment to delivering transformative value to our clients”.
-Kishore Durg, global lead of Accenture LearnVantage.
3. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 61
Cisco Systems, Inc. (NASDAQ:CSCO) is an American technology company that provides information technology and networking services. On January 15, the company announced Cisco AI Defense, an end-to-end solution designed to protect the development of and use of AI applications for enterprises. The advancement in AI technology brings with it numerous safety concerns and security threats. The introduction of Cisco AI Defense aims to address these challenges, helping businesses develop, deploy, and secure AI applications with confidence and ease.
“Business and technology leaders can’t afford to sacrifice safety for speed when embracing AI. In a dynamic landscape where competition is fierce, speed decides the winners. Fused into the fabric of the network, Cisco AI Defense combines the unique ability to detect and protect against threats when developing and accessing AI applications without tradeoffs”.
– Jeetu Patel, Executive Vice President and Chief Product Officer, Cisco.
2. 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. One of the biggest analyst calls for Tuesday, January 21st, was for Tesla Inc. Piper Sandler reiterated an “Overweight” rating on Tesla, Inc. and raised the firm’s price target to $500 from $315. According to the firm, investors have begun appreciating Tesla’s potential in real-world artificial intelligence. The analyst told investors in the research note that as a result of this, portfolio managers are entertaining the possibility of the stock going up. Moreover, once the company is done with its current car launch plans, it will redirect its focus toward its full-driving software (FSD). The firm hasn’t estimated the impact of other ambiguous AI endeavors but is optimistic that new-age opportunities like Optimus robots and neural-net-training-as-a-service will shape the company’s thesis. According to the firm, Tesla’s first half of 2025 “may be choppy,” but it remains its top “buy-and-hold idea”.
“Regarding our views on the stock, TSLA is still our #1 buy-and-hold idea, and accordingly, we’re boosting our price target to $500 (up from $315)”.
1. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Alibaba Group Holding Limited (NYSE:BABA) is an online retailer that leverages AI in its e-commerce business. On January 21, the South China Morning Post reported that Alibaba Cloud, the cloud computing services and artificial intelligence (AI) arm of Alibaba Group Holding, has revealed an expanded suite of its proprietary large language models (LLMs) and development tools for global developers. The move comes amidst the company’s efforts to push into overseas markets. Alibaba Cloud said at its annual developer summit in Indonesia that the latest products under its Tongyi Qianwen family of LLMs, as well as multimodal AI models, are now available to global developers via application programming interfaces (APIs) on Model Studio, its generative AI (GenAI) development platform.
“Alibaba Cloud is committed to delivering real value to global developers through cutting-edge AI models, enhanced cloud infrastructure, and accessible support programmes”.
-Guo Dongliang, vice-president of international business and head of international products and solutions at Alibaba Cloud Intelligence, said at the event.
While we acknowledge the potential of BABA 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 BABA 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.
