With the world making significant strides in artificial intelligence, some countries are concerned about the key figures leading these efforts. In the latest news, the Wall Street Journal reported that Chinese authorities advised the country’s top artificial intelligence entrepreneurs and researchers to avoid traveling to the United States.
According to the report, the authorities are concerned that Chinese experts could divulge important and confidential information about the country’s progress. They also fear that they could be detained and used as a “bargaining chip” in US-China negotiations.
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The report further revealed that those who decide to travel are instructed to report their plans before leaving. Moreover, they must also report on details like what they did and whom they met upon returning. DeepSeek founder Liang Wenfeng didn’t attend the AI summit in Paris in February, as per the report, while the founder of a major Chinese AI startup also canceled a planned U.S. trip last year, also due to instructions from Beijing.
In a similar effort, Meta has also fired at least 20 employees who leaked “confidential information outside the company”.
“We tell employees when they join the company, and we offer periodic reminders, that it is against our policies to leak internal information, no matter the intent. We recently conducted an investigation that resulted in roughly 20 employees being terminated for sharing confidential information outside the company, and we expect there will be more. We take this seriously, and will continue to take action when we identify leaks.”
-Meta spokesperson Dave Arnold tells The Verge exclusively.
Moves like these underscore the importance of privacy and confidentiality, especially in terms of progress in the world of artificial intelligence. Chinese President Xi Jinping has also been instructing top Communist Party officials to improve China’s overall security, particularly in cybersecurity and artificial intelligence.
“We should give top priority to defending the country’s political security”.
-Xi was quoted as having told other members of the governing Politburo.
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.
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).
A crowded Wall Street plaza, bustling with people carrying briefcases.
10. SoundHound AI (NASDAQ:SOUN)
Number of Hedge Fund Holders: 11
SoundHound AI (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses. On February 28, D.A. Davidson analyst Gil Luria reiterated a “Buy” rating on the stock and set a price target of $13.00 from $9.50.
The analyst told investors in a research note how SoundHound AI’s revenue growth remains above expectations, and demand for the company’s solutions remains prominent as it now expands its business with leading players across several industries.
The company has also been successfully broadening its market reach, particularly with the acquisition of Amelia, bringing additional AI expertise to the company. The acquisition has also allowed SoundHound AI to increase its total addressable market (TAM). The firm believes that SoundHound AI has positioned itself well to capitalize on the growing demand for AI solutions across multiple industries.
9. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 42
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers. On February 28, BTIG analyst Gregory Lewis reiterated a “Buy” rating on the stock with an associated price target of $30.00.
Highlighting Bloom Energy’s strong market position and financial performance, Lewis highlighted its impressive fourth quarter earnings and robust product sales. Its non-GAAP gross margins and adjusted EBITDA, well above consensus estimates, further reflect the company’s effective cost management and profitability.
Bloom Energy’s future outlook also looks promising owing to a solid revenue guidance, the firm noted. It also highlighted how its deal with AEP for fuel cells could lead to significant revenue generation. Bloom’s energy servers also qualify for tax credits until 2028, offering it a competitive edge. Overall, the company is in a strong position to capitalize on the rising power demand, making it a promising investing opportunity.
8. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 60
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products. On February 28, the company announced that it has completed its $6.4 billion acquisition of HashiCorp (HCP).
According to IBM, products from HashiCorp automate and secure the infrastructure that underpins hybrid cloud applications and generative AI. The acquisition sustains IBM’s broad investments in automation software, allowing organizations to optimize their IT spending and lower costs.
“Organizations globally are looking to deploy modern, hybrid cloud-ready apps, which require automated cloud infrastructure at significant scale. With this acquisition, IBM is committed to continuing to invest in and grow the HashiCorp capabilities, and together, with HashiCorp’s leading technology and extensive developer community, IBM’s global reach and R&D resources, our aim is to infuse HashiCorp technology in every data center.”
-Rob Thomas, Senior Vice President, IBM Software and Chief Commercial Officer.
7. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 95
AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology. On February 27, BTIG analyst Clark Lampen reiterated a “Buy” rating on the stock with an associated price target of $600.00. The rating aims to address the reports issued by short sellers Fuzzy Panda and Culper Research against AppLovin about it misrepresenting the benefits of its AI advertising platform.
Lampen asserted that the issues, such as the alleged fraudulent download activity, don’t impact the company’s performance. He further stated how the majority of download activities are preloads. These do not affect performance as revenue is generated through user engagement and spending within apps. Claims regarding mediation practices are also unfounded, noted the firm, stating that these practices are standard in the industry.
6. 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 February 28, Tom Narayan from RBC Capital maintained a “Buy” rating on the stock with a price target of $440.00.
Narayan maintained a buy on the stock despite the stock plunge on Tuesday, February 25th, which pushed the company’s market cap below $1 trillion. The plunge followed a report from Reuters stating how the company’s long-awaited upgrade to its partially automated driving systems has disappointed owners. There are also concerns regarding the potential over-investment in artificial intelligence weighing in on the stock, as well as the frustration over how little time Musk is putting in his companies over the White House.
“He’s a very hands-on operator, and if you’re spending that much time in an office in the White House, how much time are you spending running all of your other companies, including the one that’s publicly traded?”
-Art Hogan, chief market strategist at B. Riley Wealth in Boston.
5. 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 the launch of its AI-powered platform called Agentforce. On February 27, Bernstein analyst Mark Moerdler lowered the firm’s price target on the stock to $243 from $286 and kept an “Underperform” rating on the shares.
According to the firm, it has been worried that Salesforce is a mature business in a mature market, and expectations have been too high, particularly for its AI-powered platform Agentforce. The company’s Q4 results and guidance have been in-line with firm expectations considering the company reported a mixed quarter and slower-than-anticipated revenue growth guidance for Q1 and FY26.
4. 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. On February 26, TD Cowen analyst Joshua Buchalter reiterated a “Buy” rating on the stock with a $175.00 price target. According to the firm, Nvidia is anticipated to sustain its growth in the data center business in the coming years. Discussing the Q4 earnings print, Buchalter said that the beat and raise was one that “investors have come to expect from NVIDIA, albeit more moderate than recent quarters.”
Moreover, even though there are concerns about the Blackwell ramp and the emergence of DeepSeek, Nvidia continues to make the “extraordinary look ordinary.” Buchalter did point out that the guide was “only” 2% above Street’s forecast as “sky-high expectations will likely persist on otherwise incredible top-line results.” He also said that there will be “continued (and inevitable) questions of sustainability of this level of remarkable growth and demand.” Regardless, he is bullish on the stock and asserted that Nvidia doesn’t only lead in accelerated computing but also has an undeniable technological moat.
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On February 28, fresh comments from the U.K. watchdog Competition and Markets Authority (CMA) probe into Alphabet’s (GOOGL) were released. The company is being investigated by the UK competition watchdog over the impact of its search and advertising practices on news publishers, consumers, businesses and competing search engines. Comments on search dominance for Google have been mixed, with some supporting the engine and others viewing it as a problem.
According to Yale University Professor Fiona Scott Morton, “Google holds a monopoly in general search that is overwhelming and durable.” Consequently, Samsung responded by saying that the CMA’s potential intervention is possibly going to have a significant effect on it and other original equipment manufacturers as well as challenger browsers. The CMA will be using these responses to determine whether Google’s search and advertising search businesses need to come under the scope of the DMCC and whether it must adjust its practices. These include Google requiring to make the data it collects available to other businesses, allowing more control to publishers over how their data is used, including in Google’s artificial intelligence services.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 262
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On February 27, CNBC reported that Meta AI will become one of the social media company’s standalone apps soon, similar to Facebook, Instagram, and WhatsApp. The move to make Meta AI a standalone app, likely during the second quarter, will mark a major milestone in CEO Mark Zuckerberg’s plans to make his Meta Platforms, Inc. the leader in artificial intelligence by the end of the year. Meta AI, launched in September 2023, is a testament to the company’s generative AI technologies.
“This is going to be the year when a highly intelligent and personalized AI assistant reaches more than 1 billion people, and I expect Meta AI to be that leading AI assistant”.
-Zuckerberg during the company’s fourth-quarter earnings call in January.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. On February 27, Morgan Stanley analyst Brian Nowak maintained a “Buy” rating on the stock and kept the price target at $280.00. Amazon’s potential for growth, particularly the launch of Alexa+, its AI-powered assistant integrating Amazon’s ecosystem and third-party applications, has led to the buy rating.
Moreover, since Alexa+ is free for Amazon Prime members, it is more likely to be adopted within the Prime membership base. Alexa+ signifies how Amazon has the potential to generate more durable and cash-flow positive growth over the coming years, which is why Nowak considers the company to be an underappreciated leader in the retail sector’s AI developments. All in all, the $280 price target signifies a 30% upside potential, highlighting the optimism around the company’s technological advancements and strategic initiatives.
While we acknowledge the potential of 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 time frame. 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.
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