In a surprising turn of events, a consortium led by Elon Musk said on Monday that it has offered $97.4 billion to buy the nonprofit that controls OpenAI. Marc Toberoff, Musk’s attorney, confirmed that he submitted the bid for all OpenAI’s assets to its board.
The offer is a twist to Musk and OpenAI CEO Sam Altman’s rift that began last August when Musk filed a lawsuit against OpenAI. The lawsuit accused the company of putting profits before its initial nonprofit mission which aimed to advance AI in a way that benefits humanity.
The two prominent figures of the tech world are still involved in a legal battle over the future of this AI startup.
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Analysts have been skeptical of Musk’s move ever since it came to light.
“I think it’s fair to be pretty suspicious of this considering that he has a competitor himself… which is structured as a for-profit company, so I think there’s more than meets the eye here”.
– Christie Pitts, a tech investor in San Francisco, told the BBC.
Sam Altman has this to say about the bid:
Musk was “a competitor who is not able to beat us in the market and you know, instead is just trying to say, like, ‘I’m gonna buy this’ with total disregard for the mission”.
– Altman told Axios
Plus, this is what Altman wrote on X as a reply to Musk’s bid:
“No thank you but we will buy twitter for $9.74 billion if you want.”
OpenAI was cofounded by Musk and Altman in 2018 as a non-profit, with Musk leaving before the company took off. Musk’s lawsuit against OpenAI and Altman says that the founders originally approached him to fund a nonprofit focused on developing AI to benefit humanity. However, it was now focused on making money.
“It’s time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens.”
-Elon Musk
On the contrary, Altman said that he has no interest in the offer, stating that OpenAI is not for sale.
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10. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On February 11, Bank of America reiterated the stock as “Buy” with a $125 price target, stating that the company is well positioned for “DOGE priorities.” The Department of Government Efficiency (DOGE) is a temporary organization that aims to modernize federal technology and software to improve government efficiency. The firm believes Palantir can help organizations streamline their operations, cut down costs, and improve decision-making through AI.
“For PLTR , we see the focus on operationalizing data, establishing high-fidelity digital enterprise-twins, and accelerating decision making as a winning formula. AI and data analytics are critical to unlock timely and better informed decision making – from cutting duplicative contracts, to improved logistics, to autonomous systems, to command, control and communications on the battlefield”.
9. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 56
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 11, Oppenheimer initiated coverage of the stock with an “Outperform” rating and a $320 price target. The firm said it sees “sustained ‘double-digit’ revenue growth” for IBM.
“We are initiating coverage of International Business Machines (IBM) with an Outperform rating and a $320 price target”.
Oppenheimer is bullish on the stock as it anticipates strong revenue growth in its software business, primarily driven by its Red Hat offerings. It also anticipates a rebound in consulting in the second half of 2025 with recovery in application development and management. IBM also enjoys “optionality” with the creation and management of artificial intelligence applications. Therefore, the analyst told investors in a research note that these drivers are likely to lead to “strong expansion activity” with existing customers, as well as boost continued gross and pre-tax margin expansion.
8. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
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 February 11, Oppenheimer analyst Colin Rusch reiterated a “Perform” rating on Tesla, stating that Musk’s bid for OpenAI is a distraction for the company. On February 10, an Elon Musk-led group offered $97.4 billion to buy the nonprofit that controls OpenAI. Seemingly an attempt to block the AI startup’s transition to a profit firm, Altman posted on X: “no thank you but we will buy Twitter for $9.74 billion if you want”. Meanwhile, analysts at Oppenheimer believe that this bid is only a distraction considering Tesla has now shifted its focus to being a physical AI play.
“While Tesla has shifted its focus to positioning as a physical AI play, we view Elon Musk’s bid for OpenAI as a distraction from Tesla’s core challenges [while] the bid, coming at a 38% discount to OpenAI’s October 2024 capital raise, is unlikely to lead to meaningful discussions. We see increasing risks to [Wall] Street estimates for Tesla as competition in the [electric-vehicle and autonomous-vehicle] markets continues to intensify”
-Oppenheimer analyst Colin Rusch.
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops semiconductors, providing processors and graphics technologies for gaming, data centers, and AI-driven high-performance computing. On February 11, the company announced that it had signed a Letter of Intent (LOI) with the Commissariat à l’énergie atomique et aux énergies alternatives (CEA) of France to collaborate on the future of AI compute. Both organizations will leverage their strengths to develop energy-efficient systems that support intensive AI workloads across fields such as medicine and energy. The two organizations are also planning a symposium on the future of AI compute in 2025, convening European stakeholders and global technology providers, universities, startups, supercomputing centers, and policymakers to fast-track collaboration around AI computing technologies.
“AI computing continues to drive innovation across industries, and international collaboration is critical to pushing the boundaries of what’s possible. Through this collaboration with CEA and leading French engineers, we aim to bring cutting-edge AI research closer to real-world applications by advancing system architectures that meet the demands of tomorrow’s AI workloads, while growing the joint research and development opportunities between the U.S. and France.”
-Ralph Wittig, Corporate Fellow and head of research, AMD.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that has recently launched Apple Intelligence, its personal intelligence system. One of the biggest analyst calls on Tuesday, February 11, was for Apple Inc. Morgan Stanley analyst Erik Woodring maintained a “Buy” rating on the stock and set a price target of $275.00. Woodring’s buy rating particularly stems from the performance and future potential of Apple’s iPhone lineup. According to recent data, Apple Intelligence has contributed positively toward iPhone demand in the U.S. This has been particularly true for the models that support Apple Intelligence. Moreover, the company’s robust position in non-China emerging markets and the likely benefits coming from national subsidies in China further reinforce iPhone demand projections. The launch of the iPhone SE4 will also likely drive significant sales growth.
“As a result, we’d conclude that while yes, Apple Intelligence did appear to provide a small tailwind to eligible iPhones in markets where available (the U.S.) during the holiday quarter, it was almost entirely due to U.S. consumers accelerating purchases of the discounted 1 year old iPhone 15 Pro/Pro Max.”
-Morgan Stanley
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On February 10, Evercore ISI added Nvidia’s stock to the firm’s “Tactical Outperform” list, maintaining an “Outperform” rating and a $190 price target on its shares. The firm noted that the stock had underperformed the S&P 500 by 9% over the past month as of February 7. It said that three investor concerns have been responsible for this underperformance: DeepSeek reducing overall AI demand, DeepSeek shifting AI compute cycles away from Nvidia GPUs to ASICs, and Blackwell delays. The firm has also conducted dozens of channel checks with senior AI engineers at the top hyperscalers, stating that the checks are consistent with its long-term thesis. Therefore, it expects a positive report and outlook on the company’s call.
4. 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. Wall Street was disappointed after Alphabet posted its Q4 results, particularly because of the hefty AI spend it forecast. Management projected a $75 billion in FY25 capex to expand capacity for AI demand. Expenses are also expected to rise in 2025, driven by higher depreciation from elevated capex and increased investments in AI and Cloud talent. Nevertheless, Goldman Sachs’ Eric Sheridan has highlighted “continued revenue momentum” for the stock based on robust performance in Search across all verticals, decent YouTube Ads results, and positive early engagement with AI Overviews. Moreover, despite significant AI-related investments, operating margins also beat expectations. Generative AI and a “more normalized overall enterprise computing landscape have also positively placed Alphabet’s cloud business. Due to these factors, the firm rated Alphabet stock as a “Buy” with a $220 price target, as reported by TipRanks on February 10th.
“Away from any short-term debates, we continue to view Alphabet as well-positioned against both the current (mixture of desktop and mobile utility) and potential future (AI/ML; personalization; lowered friction to applications) computing landscapes. We continue to advocate that the combination of AI distribution at scale (collection 1b+ user applications) and scale of compute to both invest and drive efficiencies remain as a dual under-appreciated narrative in terms of AI over the long-term, particularly as we move from the ‘infrastructure’ to ‘platform’ and ‘application’ layers of AI monetization.”
– Goldman Sachs’ Eric Sheridan
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On February 11, Tigress Financial analyst Ivan Feinseth reiterated a “Buy” rating on the stock with a $935.00 price target. Meta Platforms is strategically placed in the AI-driven technology landscape, driving optimism for firms such as Tigress Financial. The company has been making significant investments in AI intending to enhance user engagement and content quality across the various applications that it offers. Therefore, integrating artificial intelligence into the company is expected to drive business growth and product development, consequently boosting revenues. The firm also discussed Meta’s plans to expand its product line with advanced smart wearables, which further underscores its commitment to leveraging AI for monetization opportunities. Moreover, its strong financial health, together with its robust balance sheet and cash flows, support its growth strategies and allow continued share repurchases and strategic acquisitions.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On February 10th, Barclays’ analyst Raimo Lenschow maintained a “Buy” rating on the stock and set a price target of $475.00. On the same day, Stifel Nicolaus analyst Brad Reback also maintained a “Buy” rating on the stock and retained the price target of $515.00. Reback has been bullish on the stock particularly due to Microsoft Azure’s AI Foundry, which is viewed as a key differentiator for Azure. The analyst has also highlighted strategic investments in AI and application server innovations that position it well against competitors, ensuring its leadership in the artificial intelligence space.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
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 11, CMB International Securities analyst Saiyi He maintained a “Buy” rating on the stock and set a price target of $268.00. The firm has noted Amazon’s strong financial performance and growth potential for the rating, stating that its 4Q24 results demonstrated a robust increase in revenue and noteworthy growth in operating profit. Cost optimization and operational efficiency improvements in both North America and AWS segments have led to this growth.
Moreover, the company has also been extending efforts towards scaling and cost optimization, which eventually looks good for operating profit growth. Saiyi He also noted Amazon’s expansion in advertising revenue, and while there may be challenges such as foreign exchange headwinds and incremental investments slowing margin expansion in the AWS segment, the company’s innovation and infrastructure investment are anticipated to help sustain its competitive edge.
Firms such as JP Morgan are also bullish on the stock, citing that “AMZN has a very clear path to AI monetization through AWS, and it remains early in what should be an extended cycle of innovation and technology transformation.”
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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