Last month, President Xi Jinping held a rare meeting with some of the biggest names in China’s technology sector, urging them to “show their talent” and believe in the power of China’s model and market.
Following this guidance, tech leaders in China are raising billions and betting on the AI race. In the latest news, Chinese artificial intelligence startup Zhipu AI has raised more than 1 billion yuan ($137.22 million) in fresh funding, only months after securing a 3 billion yuan investment.
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According to Zhipu AI, state-backed Hangzhou City Investment Group Industrial Fund and Shangcheng Capital are among the investors in the round. The move comes amid intense competition in China’s AI sector, particularly after DeepSeek emerged with its AI models, claiming to match Western competitors’ capabilities at lower costs.
In another news article, Chinese smartphone maker Honor reported that it will spend $10 billion over the next five years on developing AI for its devices. This comes as the former Huawei unit prepares for a public listing, its CEO James Li has revealed.
The company no longer wants to be merely a smartphone company. Rather, Li said in a speech at the Mobile World Congress (MWC) trade show in Barcelona that it is now aiming to develop a system of AI-powered PCs, tablets and wearables.
Similar to Zhipu AI, Honor’s announcement comes amid a boom in Chinese AI investment after DeepSeek emerged with its acclaimed cheaper and efficient AI models. Back in August, Reuters had also reported how Honor has been receiving a high level of support from the Shenzhen local government in terms of research and development funding, tax breaks and support in expanding overseas.
President Xi has been stressing continuity in China’s economic development strategy. However, he believes that its private business had “broad prospects and great promise” to create wealth and opportunity. Sure enough, it seems as if his efforts and vision are rapidly coming to fruition.
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).
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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, Daniel Ives from Wedbush maintained a “Buy” rating on the stock with a price target of $22.00.
SoundHound AI, offering innovative voice and conversational AI solutions across various industries, recently reported its financial results for the fourth quarter and full year 2024. Its fourth-quarter revenue was $34.54 million, surpassing the consensus estimate of $33.69 million, whereas the adjusted loss of five cents per share beat analyst estimates for a loss of 10 cents per share.
The company is poised to capitalize on the growing demand for voice-enabled AI solutions, particularly focusing on Agentic AI and next-generation capabilities. Looking ahead, the company anticipates 2025 revenue to be between $157 million to $177 million, compared with previous guidance of $155 million to $175 million.
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, BMO Capital analyst Ameet Thakkar lowered the firm’s price target on the stock to $23 from $25 and kept a “Market Perform” rating on the shares.
According to the firm, the company’s earnings print has been mixed. It also noted how investor focus has been fixed on the stronger-than-consensus FY25 revenue and gross margin guidance, but the lack of backlog growth doesn’t align with Bloom Energy’s commentary on data center demand.