Known as one of the most brittle rivalries in tech history, the feud between Elon Musk and Sam Altman has taken a surprising turn. OpenAI and Musk have agreed to fast-track a trial over OpenAI’s for-profit shift. Musk had previously bid to buy the AI startup, aiming to derail its journey of becoming one of the world’s most important companies. He alleged that OpenAI’s transition to becoming a for-profit company betrays its original mission of benefiting humanity, arguing that such a structure could lead to prioritizing profits over ethical AI development and open-source principles.
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In the most recent federal court filing, Elon Musk and OpenAI have jointly proposed a trial in December. Both parties also agreed to delay the decision on whether the expedited case will be decided by a jury or solely by the judge. Previously, Musk had requested the court to pause the artificial intelligence group’s transition to a for-profit model. US District Judge Yvonne Gonzalez Rogers dismissed Musk’s request, calling it “extraordinary and rarely granted.” However, the judge added that the court was prepared to expedite a trial over “interrelated contract-based claims” due to the “public interest at stake.”
“We welcome the court’s March 4 decision rejecting, opens new tab Elon Musk’s latest attempt to slow down OpenAI for his personal benefit.”
-OpenAI said in a blog post.
“We fully intend to (1) keep the non-profit as a crucial part of our work to achieve our mission, and (2) make sure it’s not just supported by a successful business, but in a stronger position than ever.”
-OpenAI.
Musk and Altman have been involved in a feud ever since Musk left OpenAI. Musk left the company due to conflicts of interest between OpenAI’s research and Tesla’s work on artificial intelligence. Ever since, Musk has been criticizing OpenAI’s direction, such as its partnership with Microsoft and its path toward becoming a for-profit entity.
“Probably his whole life is from a position of insecurity. I feel for the guy. I don’t think he’s a happy person. I do feel for him.”
-Altman said in an interview on the sidelines of the Paris AI Action Summit.
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. Fabrinet (NYSE:FN)
Number of Hedge Fund Holders: 42
Fabrinet (NYSE:FN) offers optical packaging, along with precision optical, electro-mechanical, and electronic manufacturing services. On March 14, Northland raised the firm’s price target on the stock to $350 from $300 and kept an “Outperform” rating on the shares. The price target revision comes after Fabrinet announced warrant agreements with Amazon (AMZN).
The analyst told investors in a research note that the $400M in annual module purchases Amazon announced as part of a separate warrant agreement with Applied Optoelectronics (AAOI) “could well represent the bulk of their demand.” This could open up the possibility of the Fabrinet deal being focused on other elements of AI Infrastructure. This is particularly true given Fabrinet’s capabilities at the systems level.
9. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 54
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country. On March 16, the company announced the launch of two new artificial intelligence models, including a reasoning-focused model. According to Baidu, the reasoning-focused model rivals that of DeepSeek.
“ERNIE X1 delivers performance on par with DeepSeek R1 at only half the price,” Baidu said of one of the new models. The X1 has “stronger understanding, planning, reflection, and evolution capabilities.”
The company reported that ERNIE X1 is the first deep-thinking model that uses tools autonomously. Meanwhile, the latest foundation model ERNIE 4.5 has “excellent multimodal understanding ability. It has more advanced language ability, and its understanding, generation, logic, and memory abilities are comprehensively improved.”
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 March 12, Robert W. Baird analyst William Power maintained their neutral stance on the stock, giving a “Hold” rating. Palantir has come a long way capitalizing on its robust AI-powered platform, as evidenced by its strategic partnerships with firms like Databricks, Archer, and Saildrone.
The collaborations intend to enhance data integration, aviation technology, and maritime intelligence, showcasing the company’s potential to drive advancements across various sectors. Despite the positive outlook, the factors that seem to be tempering this bullishness are the stock’s higher risk suitability and the absence of a meaningful price-to-earnings ratio. This reflects on its potential volatility and uncertainty in financial performance, leading to the hold rating.
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 March 14, Jefferies reiterated a “Buy” rating and $600 price target on shares. The rating, issued after meetings with AppLovin’s management, reflects optimism about the company’s long-term opportunity. The analyst also told investors in a research note that it is positive about the near-term steps the company is taking to build “a multibillion-dollar e-commerce ad business.” Customers are experiencing positive returns and spending on AppLovin is “the ultimate proof point”, the firm said.
“The main proof-point for AppLovin customers is the incremental revenue derived from advertising on the platform, attributable to APP during its relatively short conversion window. The fact is, if the $10B+ of gross ad spend on APP wasn’t converting to attributable revenue for its customers, those customers would quickly move away from APP or cease to exist. Neither of those are happening, with APP ad revs up 75% in 2024.”
-Jefferies analysts, led by James Heaney, in an investor note.
6. 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 17, J.P. Morgan analyst Harlan Sur reiterated a “Buy” rating on the stock with an associated price target of $130.00. Sur’s buy rating stems from Marvell’s strong positioning in the AI and cloud markets. The company has achieved significant wins in its AI/cloud ASIC pipeline. It is believed that it has secured a high-volume, next-generation node AI XPU ASIC program with its largest customer, AWS. This partnership is anticipated to drive substantial growth. In addition, Marvell’s leadership in electro-optics, strong market share in DSPs, and its expanding AI ASIC pipeline are also a plus point for the company.
5. 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 13, Reuters reported that Tesla is working with Baidu to improve the performance of its advanced driving assistance (ADAS) system in China. According to sources, Baidu has dispatched a group of engineers from its mapping team to Tesla’s Beijing office in recent weeks.
These engineers have been working on improved integration between Baidu’s navigation map information, such as lane marking and traffic light signals, with Tesla’s Full Self-Driving (FSD) Version 13 software. The collaboration aims to improve Full Self Driving V13’s knowledge of Chinese roads with more accurate and updated mapping information. While in the US, Tesla’s FSD system doesn’t require navigation maps to be accurate or up-to-date since local training of the AI helps the technology drive better, the company can’t do the same in China because of the country’s data laws.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. On March 14, Bloomberg reported that Apple Inc.’s top executive Robby Walker delivered blunt comments during an all-hands meeting for the Siri division. He said that delays to key features for the AI-powered Siri have been ugly and embarrassing, and the decision to publicly promote the technology before it was ready, made things worse. Walker, serving as a senior director at Apple, also said that it was unclear whether the enhancements will launch, according to people with knowledge of the matter. The new Siri features aren’t expected until at least next year. Regardless, Walker praised the team for developing “incredibly impressive” features and also promised to deliver an industry-leading virtual assistant to consumers.
3. 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 March 14, Mizuho analyst Vijay Rakesh lowered the firm’s price target on the stock to $168 from $175 and kept an “Outperform” rating on the shares. The firm’s decision comes after a shift in expectations due to falling stock valuations in the artificial intelligence sector. Investors are worrying about slowing growth rates, and even though there have been no changes to NVIDIA’s earnings estimates, the price target adjustment reflects a response to the broader market dynamics impacting companies in the AI industry. Nvidia is likely to retain its competitive edge with the upcoming introduction of Blackwell, its next-generation GPU architecture, reinforcing its leadership in the AI and computing sectors.
“For NVDA, no change to NVDA estimates and reiterate our Outperform, but lower PT to $168, 31.1x our F27E P/E, as we pull in our PT with multiple compression in the AI space overall due to fears of slowing growth…”
2. 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 12, Google launched two new AI models designed for robotics applications based on its Gemini 2.0 model. These AI models have been designed for robots to understand, act, and react to the physical world. The first AI model, Google’s Gemini Robotics, is an advanced vision-language-action model that will have physical actions as a way to provide output. Meanwhile, the second model, known as the Gemini Robotics-ER, will enable a robot to have an advanced understanding of the space around it. Developers will be able to run their programs using reasoning abilities offered by Gemini 2.0. According to the company, its models are designed for robots of all form factors such as humanoids as well as other types used in factories and warehouses.
1. 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 13, Nvidia announced that it had partnered with Microsoft to bring neural shading support to the Microsoft DirectX preview in April, a move that aims to redefine gaming technology. Neural shading takes graphics programming to the next level by boosting frame rates, enhancing image quality, and reducing system resource usage. The AI-driven shading system allows players to enjoy immersive gaming experiences by dynamically adjusting lighting, shadows, and textures for smoother gameplay.
“Microsoft is adding cooperative vector support to DirectX and HLSL, starting with a preview this April. This will advance the future of graphics programming by enabling neural rendering across the gaming industry. Unlocking Tensor Cores on NVIDIA RTX will allow developers to fully leverage RTX Neural Shaders for richer, more immersive experiences on Windows.”
-Shawn Hargreaves, Direct3D development manager at Microsoft.
While we acknowledge the potential of MSFT 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 MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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