Nvidia’s annual software developer conference, GTC, is in full swing. With its latest announcements, the company is doing all it can to assure investors of its dominance in the rapidly evolving artificial intelligence industry. On Tuesday, CEO Jensen Huang delivered a keynote address in front of a packed hockey stadium in San Jose, California.
He noted how he believes that humanoid robots are less than five years away from wide use in manufacturing facilities. In this regard, he unveiled software tools that would reportedly help humanoid robots navigate the world more easily. Huang talked about humanoid robots when asked what signs would show that AI had become ubiquitous.
Huang said it may be “when, literally, humanoid robots are wandering around, which is not five years away. This is not five-years-away problem, this is a few-years-away problem.”
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Huang asserted that the manufacturing industry is probably going to be the first to adopt humanoid robots. This is because it has well-defined tasks that robots can easily handle in a controlled environment.
“I think it ought to go to factories first. And the reason for that is because the domain is much more guard-railed, and the use case is much more specific. The value of it is very, very easy to determine. The going rate for renting a human robot is probably $100,000 and I think it’s pretty good economics.”
The chipmaker’s CEO reportedly has big plans for the AI data center industry too. Debuting silicon photonics networking systems, Huang noted that their Spectrum-X and Quantum-X photonics can join hundreds and even thousands of GPUs, enabling data center companies to deploy up to 1 million GPU clusters.
Huang further noted how those million cluster data centers will be connected to other million-dollar data centers nearby to form massive data center facilities.
“Over the next several years, we’re going to be building giant AI factories. Not normal AI factories … ones you see from space.”
The GTC keynote also talked about the company’s latest advancements, from Spectrum-X and Quantum-X photonics to Blackwell Ultra and Vera Rubin Superchips, which are going to help customers operate powerful AI systems to drive better revenue opportunities.
“AI factories are directly related to revenue, and if the throughput is not good, your revenue is hurt. If you don’t have enough capacity, your revenue is hurt. If you’re not producing something of great value … your revenue is hurt.”
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.
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10. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 21
SoundHound AI, Inc. (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses. On March 19, the company announced an expanded collaboration with NVIDIA to help businesses deploy more responsive and cost-efficient AI solutions. SoundHound will be integrating its world-class voice AI technology with NVIDIA NIM and NeMo microservices, part of the NVIDIA AI Enterprise software platform, to help reduce response times and improve the accuracy of AI interactions.
This in turn allows the company to enhance its AI-powered offerings across industries, including automotive, restaurant, and customer service. SoundHound’s integration of NVIDIA AI Enterprise software is already being deployed in automotive AI, particularly Lucid’s voice AI system.
“The AI industry has made massive strides in model training over the last two years, but the real challenge now is deploying these models at scale efficiently. Our collaboration with NVIDIA on NIM and NeMo microservices is solving this problem, helping us optimize inference so businesses and consumers can benefit from faster, more accurate, and highly scalable voice AI.”
-Keyvan Mohajer, CEO and Co-Founder of SoundHound AI.
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 March 19, the company announced its collaboration with Finastra, a global provider of financial services software applications, to enable it to provide seamless digital lending solutions to its customers.
IBM is offering design and implementation for LCS, Finastra’s Lending Cloud Service (LCS), to enable the efficient handling of the new platform. IBM will do so by leveraging its generative AI for enterprise platform, watsonx. The Lending Cloud Service is delivered on Microsoft Azure. Besides design and implementation, the company will also offer ongoing services to Finastra’s LCS clients in North America and Europe to help expand its business.
“The global banking community is increasingly recognizing the imperative of leveraging exponential technologies, such as generative AI, the flexibility, resilience and security of hybrid cloud, and the exceptional access a robust ecosystem can deliver. The combination of these elements is a truly powerful competitive advantage. IBM is pleased to collaborate with Finastra on its modernized Lending Cloud Service, leveraging Microsoft Azure, which delivers a valuable offering, that provides greater value, automation, resiliency and generative AI powered insights and actions to its corporate clients.”
-Shanker Ramamurthy, Global Managing Partner Banking & Financial Markets at IBM Consulting.
8. 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 19, Bank of America Securities maintained a “Buy” rating on the stock with an associated price target of $420.00. The firm is optimistic about Crowdstrike’s potential for future growth after it came away from a meeting with the company’s CFO and Chief Accounting Officer. Liani noted measures taken by Crowdstrike to deal with the July outage, including the Customer Commitment Package and expansion of Falcon Flex deals.
These measures are anticipated to boost Crowdstrike’s position. Meanwhile, the management is also optimistic about a rebound in net new annual recurring revenue (nnARR) in the latter half of the year backed by growth in Cloud Security and Identity Security. The addition of new platform pillars, such as CharlotteAI, as well as the robust performance of Cloud Security and Identity Security, is further anticipated to boost the company’s growth. The firm also noted how 60% of Falcon Flex dollars have already been utilized ahead of schedule, reflecting strong growth potential upon renewal.
7. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 79
Accenture plc (NYSE:ACN) offers strategy and consulting services. On March 17, Baird analyst David Koning upgraded the stock from Neutral to “Outperform” with a price target of $390.00. Koning is bullish on Accenture’s Managed Services, representing approximately 50% of the company’s $66.4 billion annual revenue. According to the analyst, it is expected to maintain robust demand. The analysts noted that Accenture’s stock has been weak in the past few years due to sluggish IT demand and Department of Government Efficiency, or DOGE, fears.
However, second-quarter fiscal 2025 can help it “beat” mildly. The company’s strong free cash flow exceeding $9 billion favor is also anticipated to help it return to favor, ultimately allowing it to benefit from generative AI, or GenAI, demand. Analysts led by Koning anticipate GenAI as a key factor contributing to the company’s return to favor in the market, with companies likely to turn to Accenture to develop/implement GenAI solutions (Consulting) and run those (ManagedServices).
6. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 84
Cisco Systems, Inc. (NASDAQ:CSCO) is an American technology company that provides information technology and networking services. On March 17, TipRanks reported that Evercore ISI analyst Amit Daryanani maintained a “Buy” rating on the stock on March 14 and set a price target of $75.00.
The rating follows news of a partnership between Cisco and Nvidia and the unveiling of a new AI factory architecture that will empower customers to build and secure data centers to develop and run AI workloads. The Cisco Secure AI Factory with NVIDIA will use solutions like Cisco AI Defense and Hybrid Mesh Firewall to lead the way in AI infrastructure and security while streamlining enterprise AI adoption.
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 19, Baird kept an “Outperform” rating and a $370 price target on the stock. After hosting investors for a tour of Tesla’s battery manufacturing line at the Texas gigafactory and a meeting with the IR team, the firm is more certain of its near-term bearish outlook and long-term positive view.
On that note, the firm maintains its “bearish fresh pick” designation on Tesla shares. It has deemed that the Model Y retool is “a big task,” lowering delivery estimates for both Q1 and Q2 and adjusting the firm’s full-year delivery mix to mirror the impacts of downtime for the Model Y Launch series.
“Regardless of the root cause, we believe fears regarding Musk’s impact on the Tesla brand happening alongside the re-ramp of Model Y production will fuel bear arguments regarding demand which creates a near-term overhang.”
Beyond this near-term outlook, the firm has identified several potential catalysts for Tesla through the end of 2025.
“In the long term, we view TSLA as a core holding and are positive on its AI strategy/ capabilities, Optimus/robotics, Dojo compute, manufacturing leadership, and the Energy business among others.”
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. With the GTC Conference in full gear, Nvidia has unveiled its latest NVIDIA Spectrum-X™ and NVIDIA Quantum-X silicon photonics networking switches. These switches are designed to enable AI factories to connect millions of GPUs across sites, all while significantly reducing energy consumption and operational costs.
NVIDIA photonics switches claim to be one of the world’s most advanced networking solutions, integrating optics innovations with 4x fewer lasers to deliver 3.5x more power efficiency, 63x greater signal integrity, 10x better network resiliency at scale, and 1.3x faster deployment when compared with traditional methods. The company’s silicon photonics ecosystem comprises big names such as TSMC, Browave, Coherent, Corning Incorporated, Fabrinet, Foxconn, Lumentum, SENKO, SPIL, Sumitomo Electric Industries and TFC Communication.
“AI factories are a new class of data centers with extreme scale, and networking infrastructure must be reinvented to keep pace. By integrating silicon photonics directly into switches, NVIDIA is shattering the old limitations of hyperscale and enterprise networks and opening the gate to million-GPU AI factories.”
-Jensen Huang, founder and CEO of NVIDIA.
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 19, Roth MKM kept a “Buy” rating on the shares with a $220 price target. The rating update comes after the company’s $32B Wiz acquisition. This acquisition is the largest in Google’s history and beats its previous $12.5B purchase of Motorola Mobility.
The analyst told investors in a research note that this deal represents a significant event ahead of potentially rising competition in the AI cloud market as cybersecurity offerings become essential “table stakes” for hyperscalers aiming to secure both human and machine data and workloads. Wiz is anticipated to reach $1B in annual recurring revenue in 2025.
2. 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 18, Bloomberg reported that Amazon’s devices chief Panos Panay is adding a premium tier to the next generation of artificially intelligent Alexa gadgets.
Aiming to rejuvenate the Alexa brand, Panay aims to re-engineer Amazon’s hardware, from the gadgets’ silicon guts to the design and materials. All device tiers, whether entry, core, or signature, will get the same care and attention.
“I want perfection in every single product that we ship — period. There won’t be a corner cut. It won’t matter if we tried it before. It won’t matter what you thought it used to be.”
-Panos Panay
Lying at the center of the ecosystem is going to be Alexa+, the voice assistant’s new AI operating system. The edge-processing” chip upgrades will allow devices to be able to handle more AI themselves, speeding up response time and boosting privacy.
“We’re envisioning what’s the next thing for a customer when it comes to AI devices and we have some incredible ones” in development.
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 18, Microsoft Corp. and NVIDIA expanded their longstanding collaboration with powerful new integrations at the GTC conference. The two companies will leverage the latest NVIDIA generative AI and Omniverse™ technologies across Microsoft Azure, Azure AI services, Microsoft Fabric, and Microsoft 365 to accelerate generative AI for enterprises. Microsoft will be one of the first to have Azure adopt the NVIDIA Grace Blackwell Superchip, accelerating customer and first-party AI offerings.
The Microsoft-Nvidia collaboration will also allow the transformation of healthcare and life sciences through the integration of cloud, AI, and supercomputing technologies. In addition, NVIDIA Omniverse Cloud APIs will be available first on Microsoft Azure later this year, enabling developers to bring increased data interoperability, collaboration, and physics-based visualization to existing software applications. Microsoft Copilot will leverage NVIDIA GPUs and NVIDIA Triton Inference Server™ for Microsoft 365 to help serve AI inference predictions, while NVIDIA NIM™ inference microservices will be available to Azure AI to accelerate AI deployments.
“Together with NVIDIA, we are making the promise of AI real, helping to drive new benefits and productivity gains for people and organizations everywhere. From bringing the GB200 Grace Blackwell processor to Azure, to new integrations between DGX Cloud and Microsoft Fabric, the announcements we are making today will ensure customers have the most comprehensive platforms and tools across every layer of the Copilot stack, from silicon to software, to build their own breakthrough AI capability.”
-Satya Nadella, Chairman and CEO, 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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