Elon Musk has been pressing hard to halt OpenAI’s transition into a for-profit entity. But the high-stakes legal battle isn’t seemingly working out in his favor. In the latest news, a U.S. judge has denied the billionaire’s request for a preliminary injunction to pause OpenAI’s transition to a for-profit model. However, she did agree to a fast-track trial in the fall of this year to address his claims against OpenAI and its CEO, Sam Altman.
According to U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, Musk doesn’t have “the high burden required for a preliminary injunction” to block the conversion of OpenAI. However, Rogers wrote in the order that she wanted to resolve the lawsuit quickly given “the public interest at stake and potential for harm if a conversion contrary to law occurred.”
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The filing noted that even though the plaintiffs “failed to meet their burden of proof for the extraordinary relief requested,” other aspects of Musk’s lawsuit against OpenAI can proceed. Currently, OpenAI is overseen by a non-profit parent that Elon Musk recently offered to buy. However, the company’s board unanimously rejected the $97.4 billion offer to buy OpenAI.
Since Musk has become Altman’s chief adversary, he has been putting obstacles in OpenAI’s path to becoming a for-profit entity, claiming that the AI startup will deviate from its original mission of developing artificial intelligence for the benefit of humanity. OpenAI and Altman have denied these accusations, stating that the shift is essential to raise capital and effectively compete in the rapidly evolving AI industry.
OpenAI has welcomed the judge’s recent decision, stating that the lawsuit by Musk, who launched rival startup xAI in 2023, has “always been about competition”. Meanwhile, Marc Toberoff, a lawyer for Musk, said they were pleased the judge “offered an expedited trial on the core claims driving this case”.
“We look forward to a jury confirming that Altman accepted Musk’s charitable contributions knowing full well they had to be used for the public’s benefit rather than his own enrichment.”
-Marc Toberoff.
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. 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 6, the company announced its financial results for the fourth quarter of 2024. The company reported Q4 EPS of ($0.43), $0.37 worse than the analyst estimate of ($0.06). Revenue for the quarter came in at $43.8 million versus the consensus estimate of $53.84 million. The company stated that the 8% increase in revenue has been primarily due to additional revenue related to Department of Homeland Security and Digital Identity awards. Looking ahead, BigBear.ai sees FY2025 revenue of $160-180 million, falling short of the consensus of $193.9 million. The company has noted that in the event of a potential U.S. government shutdown or shift in national security priorities, its 2025 outlook would be impacted and require a guidance review.
“2024 was a pivotal year for the business. We demonstrated momentum through major contract wins, expanding our backlog and growing our pipeline, maturing our technology portfolio, and restructuring our debt to strengthen our financial position for the long term. These efforts were driven by strong execution from our team.”
-Kevin McAleenan, Chief Executive Officer, BigBear.ai.
9. 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 5, Citizens JMP analyst Trevor Walsh reiterated a “Market Outperform” rating and $400.00 price target on the stock. According to Walsh, Crowdstrike has recovered from the headwinds of the July 2024 outage and is well on track toward product renewals in FY26. Lauding the management on how it handled the situation, Walsh also pointed out to continued growth in key product areas, such as Falcon Cloud Security, Falcon Identity Protection, and LogScaleNext-Gen SIEM.
All three of these products are part of Crowdstrike’s AI-powered Falcon platform that provides comprehensive cybersecurity solutions. He further noted how current macroeconomic uncertainty is pushing discussions around platform consolidation, which may prove fruitful for Crowdstrike. In addition, the analyst also highlighted the company’s AI innovations, particularly Charlotte AI. Charlotte AI, the digital security analyst, along with the company’s efforts to secure AI workloads, demonstrates its rapid growth and monetization in AI.
8. 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 6, Wells Fargo analyst Aaron Rakers maintained a “Buy” rating on the stock and has a $120.00 price target. According to Rakers, the company’s strategic positioning and growth potential justify the buy rating for the stock. In particular, the analyst noted Marvell’s strong alignment with AWS’s next-generation Trainium3 program, anticipated to boost custom XPU revenue significantly.
Another key factor justifying the buy rating for the stock is the company’s confidence in gaining market share in the Data Center segment. Marvell has highlighted a substantial total addressable market opportunity by 2028, and it expects to capture a considerable share. In addition, the company’s Enterprise Networking and Carrier segments are expected to recover too. These key factors, albeit some market volatility, justify the firm’s buy rating for the stock.
7. 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. In a research report released on March 6th, Barclays’ analyst Raimo Lenschow maintained a “Buy” rating on the stock and set a price target of $425.00.
The rating follows the company’s launch of AgentExchange, a trusted marketplace and community for Agentforce. This new marketplace and community by Salesforce, integrated directly into its AI CRM platform, empowers partners, developers, and the Agentblazer community to build and monetize agentic AI components.
Several other investment firms have also been bullish on the stock following the company’s earnings print. On March 3rd, DBS maintained a Buy rating on Salesforce with an associated price target of $422.00. The same day, analyst Gregg Moskowitz from Mizuho Securities reiterated a “Buy” on Salesforce and kept the price target at $425.00. These firms have cited the company’s impressive financial performance and potential for growth behind their buy ratings.
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 March 6, TD Cowen upgraded the stock to “Buy” from Hold with a price target of $388, up from $180. The firm is “tactically bullish” on the stock given the recent share price pullback coming “ahead of several potentially consequential catalysts this year.”
These catalysts are new electric vehicle launches, the deployment of autonomous vehicle technology without driver supervision, and advancements in robotics. The firm believes they are robust enough to tilt the stock’s risk/reward favorably with the shares pulling back meaningfully from recent highs. The firm also issued a cautious note regarding the first quarter of the year, believing it to be challenging for Tesla. Nevertheless, Tesla’s ability to navigate through the obstacles and capitalize on the upcoming opportunities has earned it a buy.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. One of the biggest analyst calls on Thursday, March 6th, was for Apple Inc. Goldman Sachs analyst Michael Ng reiterated the stock as “Buy”, stating that it is sticking with its buy rating after the company unveiled new Mac products. The associated price target for the stock is $294. According to the firm, these new products should boost Apple’s ability to meet its second-quarter fiscal year 2025 revenue growth forecast.
“The channel fill of the newly announced products should support AAPL’s ability to achieve its F2Q25 revenue growth outlook of low-to-mid-single digits despite the lower-than-expected starting pricing for the MacBook Air.”
In particular, the MacBook Air is expected to benefit from the widespread PC refresh cycle. Key factors in driving the sales for this device are Apple’s pricing strategy, which sets the new model at a $100 lower price than the previous launch price, support of Apple Intelligence features, the M4 chip, and enhanced integration with the Apple ecosystem.
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. One of the biggest analyst calls for Thursday, March 6th, was for Nvidia Corporation. Bernstein reiterated the stock as “Outperform”, stating that Nvidia’s data center opportunity is undervalued.
“The datacenter opportunity is enormous, and still early, with material upside still possible.”
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 March 6, Google Cloud, a suite of public cloud computing services that provides AI, infrastructure, developer, data, security, and collaboration tools, announced that it is teaming up with SLB and Project Innerspace to accelerate the adoption of global geothermal energy.
The new partnership will integrate SLB’s geothermal consulting services, Project Innerspace’s innovative GeoMap that identifies potential locations for geothermal energy development, and Google Cloud’s scalable infrastructure, BigQuery and Vertex AI, allowing the companies to pinpoint and develop promising geothermal resources around the world. BigQuery is a data warehouse, while Vertex AI is a machine learning (ML) platform.
“This collaboration paves the way for widespread geothermal deployment on a global scale and will help meet future energy needs. By bringing Project Innerspace’s GeoMap, built on Google Cloud’s AI and data technologies, and SLB’s expertise in geothermal energy, businesses will have access to the tools and experience needed to grow geothermal energy programs around the world.”
-Kyle Jessen, managing director, Energy Sector, Google Cloud.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On March 6, Reuters reported that Microsoft will be investing an additional 5.4 billion rand ($296.81 million) by the end of 2027 to expand its cloud and artificial intelligence infrastructure in South Africa. This investment aims to meet the growing demand for the company’s Azure services in the region. Microsoft Vice Chair and President Brad Smith has also announced that the company would pay for technical certification exams for 50,000 individuals in high-demand digital skills. These certifications will be for cloud architecture, AI, and cybersecurity.
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 March 5, health technology leader Royal Philips announced that it has selected AWS as its preferred cloud provider to advance its business transformation and deliver secure, interoperable, and data-driven healthcare.
The company will leverage AWS’s AI technology and healthcare-specific services to deliver better care, provide faster product development, and reduce infrastructure costs. Philips is using AWS AI and similar purpose-built services to reduce repetitive administrative work. It has also launched the Tasy Electronic Medical Record (EMR) AI Virtual Assistant, a comprehensive healthcare informatics solution, to capture and transcribe key conversational data between doctors and patients in real-time.
“For more than a century, Philips has been a leading innovator in healthcare and beyond. Philips has continued to be a pioneer in next-generation healthcare solutions, adopting cloud-based medical workloads and using more than 100 of AWS’s capabilities. AWS and Philips are enabling providers to spend more time with patients and deliver better care by putting AI and cloud computing to work. Together, we aim to further accelerate the digital transformation of healthcare and drive operational efficiency.”
-Colleen Aubrey, senior vice president of AWS Solutions.
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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