Despite DeepSeek and Qwen 2.5 disrupting the global tech sector, investors welcomed the impressive Q4 AI revenues from leading US tech firms like International Business Machines Corp. (NYSE:IBM). The company’s stock price reached an all-time high of $261 on January 30th as it reported GenAI’s book of business surpassing $5 billion since the segment’s inception.
“Three years ago, we laid out a vision for a faster-growing, more-profitable IBM. I’m proud of the work the IBM team has done to meet or exceed our commitments. With our focused strategy, enhanced portfolio, and culture of innovation, we’re well-positioned for 2025 and beyond and expect revenue growth of at least five percent and free cash flow of about $13.5 billion this year,” said IBM CEO Arvind Krishna.
While the S&P 500 sharply fell from its record high of 6,118 on January 23rd to 6,012 on January 27th, the benchmark index appears to have momentum in the past few days, climbing to 6,071 on January 30th.
However, several concerns remain about the adoption of AI, in terms of security and job losses. Code.org Founder and CEO Hadi Partovi said at the World Economic Forum that the risk isn’t people losing their jobs to AI, but losing work “to somebody else who knows how to use AI. That is going to be a much greater displacement.”
“It’s not that the worker gets replaced by just a robot or a machine in most cases, especially for desk jobs, it’s that some better educated or more modernly educated worker can do that job because they can be twice as productive or three times as productive,” he explained. “The imperative is to teach how AI tools work to every citizen, and especially to our young people.”
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
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10. Logitech International S.A. (NASDAQ:LOGI)
Number of Hedge Fund Holders: 18
Logitech International S.A. (NASDAQ:LOGI) offers premium software-enabled hardware like computer accessories and audio devices to enhance business productivity, gaming, and streaming experiences. The company recently rolled out the feature-rich Rally Board 65 video conferencing solution powered by AI to offer a superior work experience in hybrid environments. Elsewhere, the Logi AI Prompt Builder is another leading productivity tool that utilizes ChatGPT to summarize and develop custom-made prompts to optimize business workflows.
On January 31st, Deutsche Bank analyst George Brown upgraded Logitech International S.A. (NASDAQ:LOGI) to “Hold” from “Sell” as well as increased the stock price target to ₣80 ($87) from ₣60 ($65). The analyst said the company’s “strong” Q3 report, boosted by surprisingly robust growth in China and the gaming segment, should shift investor attention to the capital markets day in Silicon Valley on March 5th. The brokerage anticipates upgrades to Logitech International S.A.’s (NASDAQ:LOGI) long-term profitability targets and deems its relatively lower product costs as a sustainable tailwind to gross and operating margins.
9. STMicroelectronics NV (NYSE:STM)
Number of Hedge Fund Holders: 18
STMicroelectronics NV (NYSE:STM) is a semiconductor company that manufactures communication equipment, computer accessories, and microchips for use in IoT, consumer electronics, cloud connectivity, and the automotive and industrial industries. The company’s ST Edge AI suite enables AI on microcontrollers, microprocessors, and smart sensors. STMicroelectronics NV (NYSE:STM) offers a proprietary neural processing unit called ST Neural-ART Accelerator to deliver efficiency in handling AI tasks. Meanwhile, its online STM32 edge AI tools enable developers to swiftly create and deploy ML algorithms on microcontrollers for lower costs. For instance, the Edge AI ST smart sensor embeds an ML core to facilitate context awareness in industrial equipment and IoT devices to help lower power utilization and facilitate meaningful data-sharing between microprocessors.
On January 31th, Susquehanna analyst Christopher Rolland reduced STMicroelectronics NV’s (NYSE:STM) price target to $28 from $33 but maintained a “Positive” stock rating. The brokerage said they posted in-line results but again delivered disappointing guidance due to long-standing softness in automotive and industrial segments.
8. F5 Inc. (NASDAQ:FFIV)
Number of Hedge Fund Holders: 31
F5 Inc. (NASDAQ:FFIV) offers application security, multi-cloud management, online fraud prevention, network security, and application delivery networking (ADN) services to secure, optimize, and deliver applications in cloud environments. The company specializes in protecting and managing APIs across different platforms for financial institutions, governments, and large enterprises. The F5 AI Data Fabric platform is a collection of models and APIs that make ML and AI highly accessible to users, offer enhanced app delivery and API protection, and ensure faster adaptability and response to cybersecurity threats. Meanwhile, the company’s AI Assistant within its F5 Distributed Cloud Services enables swift query-resolution, obtains relevant recommendations, and creates dashboards on a new-age natural language interface using the collective knowledge of the F5 ecosystem.
On January 31st, BofA increased F5 Inc.’s (NASDAQ:FFIV) target price to $260 from $180 but maintained an “Underperform” stock rating. The brokerage analyzed the company’s Q1 results earlier this week and inferred that it sees “a better near-term growth outlook.” However, analysts said most growth drivers are driven by temporary factors, the multiple is back to its historical high, and Q1 “may have been the best quarter for the year.”
7. Mobileye Global Inc. (NASDAQ:MBLY)
Number of Hedge Fund Holders: 33
Mobileye Global Inc.(NASDAQ:MBLY) develops and sells hardware and software solutions for driver-assistance systems (ADAS) and autonomous driving technologies to enhance mobility infrastructure and enable hands-off driving, facilitated through a variety of leading safety features like real-time detection of road users, geometry, and marking.
On January 31st, Wells Fargo analyst Aaron Rakers trimmed Mobileye Global Inc.’s (NASDAQ:MBLY) stock price target to $18 from $25 but retained an “Overweight” rating. The brokerage is incrementally negative on the company due to the weak/conservative 2025 guide. Analysts say it is left to question the degree to which outlook reflects macro uncertainty versus competitive pressure. Wells Fargo added that Mobileye Global Inc.’s (NASDAQ:MBLY) remains a 2026-plus story.
6. Monolithic Power Systems Inc. (NASDAQ:MPWR)
Number of Hedge Fund Holders: 33
Monolithic Power Systems Inc. (NASDAQ:MPWR) designs and supplies energy-efficient, semiconductor-based power electronics products, ranging from convertors, controllers, analog switches, and MOSFET drivers to digital isolators, sensors, chargers, and ultrasound multiplexers for industrial applications, data centers, cloud computing, consumer applications, telecom, and automotive industries. The company is benefitting from the surge of AI tools and infrastructure as it strives to power hardware used in most advanced LLMs and AI models, boasting over 100 AI power products.
On January 31st, Oppenheimer trimmed Monolithic Power Systems Inc.’s (NASDAQ:MPWR) stock price target to $800 from $900 to reflect group multiple compression but retained an “Outperform” rating. The brokerage sees upside results/outlook as non-AI segments recover post-correction. Analysts look for AI-heavy ED to accelerate through 2025 as accelerator customers ramp and server x86 CPU share/content gains ramp.
5. Atlassian Corp. (NASDAQ:TEAM)
Number of Hedge Fund Holders: 44
Atlassian Corp. (NASDAQ:TEAM) is a software firm that designs and builds project management software like Jira, Confluence, Trello, and Bitbucket to help companies with enterprise planning, incident response, and streamlining teams and documentation for enhanced business productivity. Its AI-powered suite, Atlassian Intelligence, developed internally and from OpenAI, integrates with its software tools to improve decision-making, run complex queries, offer actionable insights, recommend relevant work tasks, automate ticket resolution, and accelerate incident detection to efficiently elevate overall project management experience.
On January 31st, Wells Fargo increased Atlassian Corp.’s (NASDAQ:TEAM) stock price target to $375 from $350 and retained an “Overweight” rating. The brokerage highlighted the company’s impressive Q2 results, especially delivering considerable top-line upside and raising the guide across the board. Analysts believe the second half of the year guide appears derisked with further room for upward revisions.
4. Dynatrace Inc. (NYSE:DT)
Number of Hedge Fund Holders: 45
Dynatrace Inc. (NYSE:DT) offers a hypermodal AI platform, Davis CoPilot, which combines predictive AI, causal AI, and GenAI to offer optimum observability, security, and monitoring services for cloud environments. The AI platform simplifies analytics while offering workflow and automation recommendations for diverse business use cases. Dynatrac Davis can detect and analyze the root of customer-facing issues by leveraging topology and code-level data while automating remediation actions.
On January 31st, Canaccord analyst Kingsley Crane marginally increased Dynatrace Inc.’s (NYSE:DT) target price to $65 from $63 and maintained a “Buy” rating. The brokerage stated that despite the company’s F3Q headline metrics being a bit light, the business continues to perform as expected. The analyst remains bullish on the firm’s logging opportunity, highlighting encouraging data points this quarter with 1,000 clients using logs with 50% of net-new logos added over the past year using logs.
3. Accenture Plc (NYSE:ACN)
Number of Hedge Fund Holders: 60
Accenture Plc (NYSE:ACN) is a tech company that offers services related to agile transformation, data analytics, intelligent automation, AI, and software engineering. The firm is committed to speeding up the R&D and deployment of AI agents using Nvidia’s (NASDAQ:NVDA) AI offerings for faster placement of multi-agent networks for easy integration into enterprise systems. Meanwhile, the company is also revamping its core banking modernization capabilities through platform acquisitions that help unify data from legacy and modern banking architectures to facilitate product development.
On January 31st, Morgan Stanley raised Accenture Plc’s (NYSE:ACN) target price to $380 from $335 while maintaining an “Equal Weight” stock rating. The brokerage upgraded the company’s US IT Services industry outlook to “In-Line” from “Cautious.” Analysts said that investor expectations and risk/reward look “reasonably balanced for the next 12-18 months,” but key early indicators “do not point to meaningful upside to current estimates,” despite industry growth showing signs of improvement.
2. KLA Corp. (NASDAQ:KLAC)
Number of Hedge Fund Holders: 61
KLA Corp. (NASDAQ:KLAC) supplies process control and yield management systems for the semiconductor, nanoelectronics, automotive, and data center industries. The company manufactures equipment like surface profilers, nano chemical testers, and KT pro equipment used in the production of wafers, integrated circuits, and printed circuit boards. KLA Corp. (NASDAQ:KLAC) is integrating AI and deep learning algorithms in wafer and PCB defect inspection and smart IC manufacturing processes through e-beam image and automation while maintaining yield and visibility to minimize errors and drive innovation without slowing down production
On January 31st, Deutsche Bank increased KLA Corp.’s (NASDAQ:KLAC) target price to $850 from $725 and retained a “Buy” rating. The brokerage said the company reported “yet another solid print,” with revenue upside fueled by consistent momentum in high-bandwidth memory and leading-edge spending. Analysts expect KLA Corp.’s (NASDAQ:KLAC) fundamentals to keep outperforming peers in the near term, arguing that the growing difficulty of semis manufacturing against an uncertain cyclical environment “should offer an attractive combination of both offensive and defensive traits.”
1. Uber Technologies Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 136
Uber Technologies Inc. (NYSE:UBER) is a mobility SaaS company that helps connect riders with drivers and offers food delivery and grocery shopping services. For years, the firm has consistently invested in AI and uses the technology to gauge ETA estimates and improve aspects like pricing, customer services, and internal business operations.
On January 31st, JMP Securities said that Uber Technologies Inc. (NYSE:UBER) is set to face stiff competition in the US ride-sharing market as Waymo’s business scales and Tesla (NASDAQ:TSLA) prepares to launch its robotaxi network and will likely incorporate other OEMs. The brokerage said Uber Technologies Inc. (NYSE:UBER) must eye M&As to buy autonomous vehicle technology to battle these headwinds. Overall, JMP Securities believes the risk/reward in shares is balanced at current levels and retained a “Market Perform” rating on Uber Technologies Inc. (NYSE:UBER).
While we acknowledge the potential of Uber Technologies Inc. (NYSE:UBER) as an investment, our conviction lies in the belief that 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 UBER 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.
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