The Trump administration is considering a ban against Chinese AI chatbot DeepSeek from U.S. government devices amid national-security concerns. According to people familiar with the matter, U.S. officials are worried about how DeepSeek handles user data, which is said to be stored in servers in China. They also expressed concerns over how DeepSeek hasn’t sufficiently explained how it uses the data it collects or who has access to it.
The Wall Street Journal was the first to report the news, stating further how administration officials are further considering banning the chatbot from app stores and placing limits on how U.S.-based cloud service providers could offer DeepSeek’s AI models to their customers. These discussions, however, are still in the early stages.
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Several governments have been banning the use of DeepSeek ever since its emergence. South Korea, for instance, suspended new app downloads after the company failed to address regulators’ concerns about its privacy policy. Taiwan’s Ministry of Digital Affairs stated that DeepSeek “endangers national information security”, banning government agencies from using the company’s AI. Italy has also banned DeepSeek after an investigation by the country’s privacy watchdog into how DeepSeek handles personal data.
Within the US, certain agencies have independently acted as well. For instance, the US Navy has warned its members to avoid using DeepSeek “in any capacity” due to “potential security and ethical concerns.” The email specifically asked recipients to “refrain from downloading, installing, or using the DeepSeek model in any capacity.”
Banning DeepSeek entirely for the general public, however, is complicated considering the AI models are open-source. This means that anyone can download and use them for free. Many US cloud vendors have been providing DeepSeek’s models as part of their services, and restricting access can anger investors and businesses who support the technology.
“U.S. officials considering technology controls are dealing with new territory here on what to do with open-sourced models.”
Paul Triolo, a partner at DGA-Albright Stonebridge in Washington, D.C.
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.
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A financial analyst giving a presentation to a group of investors about annuity insurance.
10. BigBear.ai Holdings, Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 13
BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions. On March 7, Northland analyst Michael Latimore downgraded the stock to “Market Perform” from Outperform with a price target of $4, up from $2.50. The firm will keep the shares downgraded until the new CEO’s plans are implemented and BigBear.ai returns to meaningful and consistent growth.
The analyst told investors in a research note how the company has reported a large revenue and slight EBITDA miss in Q4, and that government spending patterns remain uncertain in the short term. The stock of the artificial intelligence company has slipped more than 20% after the company warned that it could see a disruption of federal contracts.
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 March 8, the stock received a “Hold” rating from William Blair analyst Louie DiPalma.
Two days prior, the firm had upgraded the stock from “Underperform” to Market Perform without a price target, citing a more attractive valuation after a significant drop in the company’s stock price.
“While valuation is still frothy with potential downside risk of greater than 40% on government contract delays, there have been positive developments,” analysts wrote.
William Blair believes the February 26 DOGE executive order “seems earmarked for Palantir.” The firm anticipates Palantir to win a new contract with the U.S. government to implement a centralized payment tracking system, assisting in overall cost-cutting strategies and the Department of Defense’s annual audit.
Palantir has also been pursuing contracts with the US Army.
“Its combination of revenue growth (31% guidance for 2025) and operating margin (45% for 2025) rank among the highest in all software. With the focus on growth, we did not fully appreciate Palantir’s operating leverage and ability to grow with minimal hiring. Palantir’s revenue from 2022 through 2024 grew 50% while headcount increased by only 3%.”
8. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 66
Hewlett Packard Enterprise Company (NYSE:HPE), an American multinational technology company, provides high-performance computing (HPC) systems, AI software, and data storage solutions for running complex AI workloads. On March 7, Susquehanna lowered the firm’s price target on the stock to $15 from $20 and kept a “Neutral” rating on the shares. The firm stated that the second-half weighting of Blackwell AI Server shipments, combined with pricing pressure in the core traditional Server, has led to lower-than-consensus operating profit. This has been consistent with its industry view as well as recent checks.
7. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 77
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection. On March 6, UBS lowered the firm’s price target on the stock to $425 from $450 and kept a “Buy” rating on the shares. UBS analyst Fatima Boolani told investors in a research note that CrowdStrike had a “good enough” but limited reacceleration commentary and margins see a quick reset. The price target revision follows CrowdStrike’s fourth-quarter results, showcasing a net new annual recurring revenue (ARR) of $224 million which surpassed expectations.
However, Boolani noted a lack of clarity on the timing and extent of a second-half net new ARR reacceleration. The firm’s analysis also points to an anticipated two-point compression in operating margin by fiscal year 2026. By this time, forecasted free cash flow (FCF) margin is expected to return to approximately 27%. The analyst has also highlighted strong adoption metrics of CrowdStrike’s AI-powered platform, including $900 million in Cloud and SIEM ARR growing 60% year-over-year.
6. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 105
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors. On March 7, Mark Lipacis from Evercore ISI maintained a “Buy” rating on the stock with a price target of $135.00. The company has failed to meet Wall Street’s lofty “whisper number” with its sales guidance, posting a slight beat-and-raise report. The company reported an adjusted 60 cents a share, up 30% year over year, on sales of $1.82 billion.
However, Lipacis said in a client note that the unofficial fiscal Q1 sales bogey was north of $2.1 billion. Another concern is whether it won a contract to make Amazon’s next-generation Trainium server processor. Marvell currently makes the Trainium 2 chip for Amazon.
“A key investor debate is whether Marvell or a Taiwan-based competitor (AIchip Technologies) has won the follow-on custom-AI processor chip to Amazon, called Trainium 3.”
-Mark Lipacis.
5. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 126
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On March 7, Wedbush reiterated the stock as “Outperform” with a $550 price target, adding the stock to its top picks list. The firm has reaffirmed that Tesla’s autonomous and AI-driven initiatives, including its Optimus robot program, could eventually contribute 90% of the company’s valuation. This may potentially push its market capitalization beyond $2 trillion.
“This is a gut check moment for the Tesla bulls (including ourselves) after this massive selloff in Tesla shares with fears mounting. The bears own the Tesla narrative in the near-term as lackluster sales numbers from Europe, China, and the US in January/ February along with Musk protests/brand worries have created many concerns.”
The firm estimates that less than 5% of Tesla’s global sales are at risk.
“We continue to believe the best thing that ever happened to Musk and Tesla was Trump in the White House as this will create a deregulatory environment with a federal autonomous roadmap central to the Tesla golden strategic vision.”
4. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 161
Broadcom Inc. (NASDAQ:AVGO) is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets. On March 7, Analyst Fang Boon Foo of DBS maintained a “Buy” rating on the stock and retained the price target of $250.00. Broadcom has established itself as a market leader after its series of successful acquisitions, particularly VMware.
The company’s emphasis on high-performance design and integration allows it to capture above-industry margins, reinforced by strong execution in AI chips and software. Broadcom is also poised to gain from the rising AI chips demand, with management projecting significant revenue growth. The firm has further highlighted the stock as an attractive investment opportunity based on its strong financial performance, consistent free cash flows, and stable dividends to shareholders.
3. 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 it unveiled its AI-powered platform called Agentforce. On March 7, Kash Rangan from Goldman Sachs maintained a “Buy” rating on the stock with a price target of $400.00. Rangan is bullish on the company’s execution of its generative artificial intelligence product roadmap with the release of Agentforce 2dx following the TrailblazerDX conference.
According to the analyst, these enhancements, coupled with Salesforce’s unique static and dynamic data within Data Cloud and Zero Copy architecture, can accelerate customer time-to-value and expand the range of use cases beyond traditional Salesforce. Rangan said that even though Agentforce adoption may take time, there is a clear path for growth as customers adopt these tools.
He is further optimistic that AI monetization could happen sooner than Salesforce’s projected timeline of calendar 2026 and fiscal 2027. This is supported by data cloud and AI reaching $900 million in scale, 3,000 paying Agentforce deals in Q4 2025, and deal wins.
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 on March 7 was for Nvidia Corporation. UBS reiterated the stock as a “Buy”, stating that it is standing by the stock ahead of its AI [GTC] Conference later this month.
“The UBS Tech Team remains positive longer term on AI drivers, but investors are currently less assured than they were through the past two years. We await confirmation catalysts (Nvidia GTC 18 March, Computex 20 May) to possibly support sentiment.”
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $175 implies a 58% upside, however, the Street-high target of $236 implies an upside of 113%.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On March 7, Stifel reiterated the stock as “Buy” and lowered its price target to $475 per share from $515. According to the firm, it is sticking with the stock after recent meetings with investor relations that have reinstated their belief that the stock will stay range-bound until Azure/Commercial Cloud growth runs consistently ahead of capex increases.
The firm anticipates that Microsoft will add $25 billion to $30 billion in incremental capex for fiscal 2026, which aligns with Azure’s estimated 30% growth rate. The firm is confident in the company’s rapidly emerging genAI cycle, stating that it will sustain double-digit revenue and profitability. However, it does cite increased capex estimates for its lowered price target.
“With most of MSFT’s segments performing well at scale, given investor sentiment and near singular focus on capex intensity the meetings served to reinforce our belief.”
While we acknowledge the potential of MSFT 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 time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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