The interest in Chinese AI startup DeepSeek remains strong, and the company itself is actively fueling its momentum. In the latest news, the company has announced that it is going to make its models’ code publicly available. The move reaffirms its commitment to open-sourcing artificial intelligence.
Posting on social media platform X, the company said that its “tiny team” will open-source 5 code repositories next week. They describe the move as “small but sincere progress” and promise to share “with full transparency.”
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“These humble building blocks in our online service have been documented, deployed and battle-tested in production.”
-DeepSeek
Code repositories are storage locations where developers may see and contribute to software development. They are typically published in centralized hosting services like Microsoft’s GitHub. While they may contain key company assets, DeepSeek’s V3 and R1 models were open-source which implied anyone can see or modify them for free, leading to the rapid rise and success of the startup.
“As part of the open-source community, we believe that every line shared becomes collective momentum that accelerates the journey…Daily unlocks are coming soon…No ivory towers – just pure garage-energy and community-driven innovation.”
-DeepSeek
Unlike many US rival firms that tend to lean toward closed-sourced models, the company has been unique given its commitment to open-source. DeepSeek’s Liang Wenfeng said last July how the firm did not prioritize commercializing its AI models. He further noted that there was soft power to be gained from open source.
“Having others follow your innovation gives a great sense of accomplishment. In fact, open source is more of a cultural behavior than a commercial one, and contributing to it earns us respect”.
-Liang Wenfeng
With the new open-source code, DeepSeek will be providing the infrastructure to support the AI models that it has already publicly shared. Earlier, the company had also published a study with founder and CEO Liang Wenfeng one of the 15 co-authors. It discussed “native sparse attention”, which is designed to improve LLM efficiency in processing large data sets.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A data analyst working at a computer, crunching numbers for the company’s 80% total assets.
10. 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 20, the company announced an expansion of its relationship with Equinix, the world’s digital infrastructure company®.
The 10-year collaboration, now reaching over 100MW of electricity capacity, will support Equinix’s International Business Exchange™ (IBX®) data centers across the United States. Bloom’s fuel cells allow Equinix to generate on-site power at its data centers more sustainably as compared to typical grid-delivered energy.
“Our fuel cells are supplementing grid power at 19 Equinix IBX data centers in six states with cleaner and reliable onsite power. With AI adoption accelerating and data center demand exploding, our ongoing relationship underscores the scalability and reliability of our fuel cell technology to support large and complex projects. We are delighted to work with Equinix to help drive the industry forward.”
-Aman Joshi, Chief Commercial Officer at Bloom Energy.
9. 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 20, the company announced the introduction of new AI Integration Services for helping clients transform end-to-end business processes with agentic AI on their preferred AI and cloud platform.
These AI Integration services will bring key capabilities to clients, including deep expertise in scaling AI with more than 75,000 GenAI-certified IBM consultants, generative AI-powered technology solutions to boost consulting expertise and a suite of pre-built templates for specific business domains and industry processes. Besides these key capabilities, the new AI Integration Services will also bring together IBM’s open ecosystem of partners to help clients transform end-to-end business processes into agentic apps. It will also help drive ROI from AI.
8. 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 February 20, William Blair analyst Louie DiPalma reiterated their bearish stance on the stock, giving a “Sell” rating. Even though there is a significant potential for a positive impact of artificial intelligence on Palantir’s operations, budget concerns and possible shifts in US military funding have led to the sell rating by the firm.
An estimated 22% of Palantir’s government revenue is dependent on the US Army, and since there may be potential delays in important contracts such as TITAN and Army Network modernization, it poses a serious concern for Palantir. The company’s U.S. government business is also facing a deceleration in revenue growth, further reinforcing a sell rating on the stock. Finally, DiPalma also highlighted how Palantir’s market capitalization is higher compared to rivals.
Analysts on Wall Street currently have a consensus “Hold” rating on the stock. The average price target of $97 implies a 4% downside, however, the Street-high target of $160 implies an upside of 58%.
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 February 21, Barclays raised the firm’s price target on the stock to $506 from $372 and kept an “Overweight” rating on the shares. The rating, issued ahead of the Q4 report on March 4, reflects the firm’s expectation of potential upside to annual recurring revenue estimates. Other analysts are also optimistic about the stock given Crowdstrike’s ability to maintain its momentum as a strategic platform vendor, largely due to its AI-powered security solutions.
6. 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 20, Loop Capital raised the firm’s price target on the stock to $650 from $450 and kept a “Buy” rating on the shares.
The analyst told investors in a research note that some investors are skeptical about Applovin’s stock price appreciation and high sell-side targets, but the firm is hard-pressed to “punch serious holes” in the bull thesis. The firm further stated that advertisers are continuing to give out positive feedback, and therefore it views the momentum continuing for the business.
The company recently reported an earnings beat and strong guidance in Q4, 2024, leading to positive comments from several analyst firms.
“Blowing past expectations, the company proved its AI-driven platform is monetizing better than even bulls anticipated. With ad revenue surging and margins expanding, it’s clear that advertisers are prioritizing AppLovin’s targeting tools over competitors.”
-Goldman Sachs.
5. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
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 20, Salesforce (NYSE:CRM) CEO Marc Benioff took to social media platform X to clarify that there is no cloud agreement with major tech firms to manage artificial intelligence workloads.
“The story in @TheInformation is incorrect. In 2024, Salesforce explored a fourth deployment option for our customers, alongside our existing choices: our proprietary data centers, AWS, and Alibaba. Last year, we decided to extend our partnership with Google, giving customers the option to deploy Salesforce’s customers 360 apps, Hyperforce, Agentforce, and Data Cloud on Google’s platform in future Salesforce releases”
-CEO Marc Benioff
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. On February 19, BofA passed comments after the release of Apple’s newest member of the family, the iPhone 16e. The firm noted how Apple Intelligence is available on the device and that the 2-in-1 camera supports Visual Intelligence. However, it is yet to see whether users are going to upgrade after its release.
“Whether or not the iPhone 16e will cannibalize sales from the iPhone 16 or incentivize upgrades is something investors will be watching closely,” says the analyst,
The firm also noted how Apple’s FY25 revenue and EPS estimates of $411B and $7.30, are unchanged. The firm maintained a Buy rating and a $265 price target on the stock.
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On February 21, executives from Google and Meta used the opportunity at the Techarena tech conference in Stockholm, Sweden, to discuss how Europe’s artificial intelligence industry is being held back by excessive regulation.
Voicing concerns about the continent’s strict approach to regulating technologies such as AI and machine learning, Dorothy Chou, Google DeepMind’s head of public policy said that a major problem with Europe’s approach to regulating AI technology has been that the AI Act was devised before ChatGPT’s release. While the AI Act was introduced in April 2021, OpenAI launched ChatGPT in November 2022.
“There is a way to use policy to create a better investment environment when it’s done in a way that promotes business…I think what’s difficult is when you are regulating on a time scale that doesn’t match the technology. I think what we need to do is both regulate to ensure that there is responsible application of technology, while also ensuring that the industry is thriving it all the right ways.”
– Dorothy Chou
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. On February 20, KeyBanc raised the firm’s price target on the stock to $190 from $180 and kept an “Overweight” rating on the shares. According to the firm, even though there are concerns regarding constraints associated with the ramp of GB200 NVL servers, Nvidia is still likely to report strong Q4 results.
The analyst told investors in a research note that the company is likely to report “solidly” beat estimates and guide Q1 “conservatively and moderately higher” than consensus. There are manufacturing delays that are slowing down the shipments of GB200 NVL server racks. However, this isn’t a problem since customers are delaying their orders for GB200. This gap is being filled with HGX-based B200 servers with x86 head nodes, DeepSeek, as well as a limited supply of Huawei’s Ascend.
“However, we still view AI as a significant market opportunity for NVDA.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 338
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 16, TD Cowen analyst John Blackledge maintained their bullish stance on the stock, giving a “Buy” rating with a $265 price target. One of the reasons for Blackledge‘s buy rating is Amazon Web Services (AWS) expected growth in generative AI (GenAI) revenue. He noted that he expects growth to be approximately $2.8 billion in 2024 to $56.3 billion by 2030. This reflects a compound annual growth rate of 51% from 2025 to 2030.
Besides the revenue growth in GenAI, Blackledge also acknowledged Anthropic’s role in AWS’s GenAI revenue stream, with half of AWS’s GenAI revenue attributed to Anthropic in 2024. He further forecasted that based on differing scenarios, AWS’s GenAI revenue from Anthropic could reach between $7 billion and $17 billion by 2027. In addition, capital expenditure for AWS is anticipated to rise to approximately $76 billion in 2025. This is driven by the need to build out GenAI infrastructure to meet increasing AI demand.
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 timeframe. 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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