In this article, we will take a detailed look at the 10 biggest AI stories and ratings updates you should not miss this week.
Are Growing Patents in AI from China a Threat to the US?
China and the United States continue to compete against each other as the AI boom continues to reign in the tech industry. On July 2, Reuters reported that China plans to develop 50 new national and industrial standards for artificial intelligence by 2026. The country aims to standardize systems in the artificial intelligence sector by providing thorough guidelines to companies and budding startups. Furthermore, on July 3, Reuters reported that China filed six times more patents than the United States for inventions in AI like chatbots. On a global scale, more than 50,000 patent applications were filed in the past decade, a quarter of which were filed in 2023 alone. China filed 38,000 generative AI applications between 2014 and 2023, while the United States only filed slightly over 6,200 applications during the same period. Of the total applications, ByteDance, Alibaba Group, and Microsoft filed the largest number of applications. The report added that Chinese patent applications covered a wider range of sectors such as autonomous driving, publishing, and document management. South Korea, Japan, and India were ranked third, fourth, and fifth with the highest number of patent applications.
The United States, on the other hand, has reportedly accumulated $55.6 billion in venture capital funding in the second quarter of 2024, the highest quarterly total in two years. On July 3, Reuters reported that the surge in venture capital funding is driven by developments in artificial intelligence. Such is a 47% increase from the $37.8 billion raised by startups in the first quarter of 2024. Significant investments include $6 billion by Elon Musk’s xAI and $1.1 billion raised by CoreWeave. Previously, venture capital funding took a hit, reporting $35.4 billion in the second quarter of 2023 amid high interest rates and sluggish economic growth. While venture capital and investment in AI are increasing, the IPO market remains sluggish.
OpenAI & Anthropic: A Comparative Analysis
While the threat of Chinese innovations looms over the United States, startups in the country are disrupting the industry with key innovations. OpenAI, the company behind ChatGPT, is a leading artificial intelligence company based in the United States. In February this year, OpenAI closed a deal with venture capital firm Thrive Capital, allowing it to buy some of its shares in a tender offer, bringing its total valuation to $80 billion. This is a threefold increase in its value from a few months ago in 2023.
On June 10, OpenAI and Apple announced a partnership to integrate ChatGPT into iOS, iPadOS, and macOS. Users will now be able to access ChatGPT’s capabilities on all these devices without having to switch tools. Siri will also be able to reach ChatGPT when a user asks a question and will present them with an answer directly from the chatbot. ChatGPT will be integrated into Apple’s writing tools, allowing users to create content when required. The development ensures that user security remains intact. Requests are not stored by OpenAI and IP addresses remain obscured. Users may connect to their ChatGPT account, allowing them to choose their data preferences. The integration will be executed later this year and can be accessed for free without having to create an account.
In another update, Apple is reportedly positioned to join OpenAI’s board. On July 2, Reuters reported that Apple is set to get an observer role on OpenAI’s board, part of the agreement made by the two entities a month ago. Phill Schiller, head of Apple App Store and former marketing chief, was selected for this position. The board agreement will take effect later this year. As of yet, Schiller has not attended any meetings.
Anthropic, OpenAI’s direct competitor, is an artificial intelligence startup founded in 2021. The company is led by Dario and Daniela Amodei as CEO and president. The safety and research company is popular for its safety-oriented language models that produce reliable interpretable, and steerable AI systems. On March 27, CNBC reported that Amazon invested an additional $2.75 billion in the startup, bringing its total investment to $4 billion. Anthropic’s valuation at that time was $18.4 billion and closed five different funding rounds worth $7.3 billion in the past year. Amazon will remain a minority stakeholder in the company. Last year, Alphabet’s Google announced an investment worth $2 billion into Anthropic adding to its $550 million funding from earlier.
Claude is the company’s AI platform able to conduct advanced reasoning, vision analysis, code generation, and multilingual processing. Anthropic recently launched Claude 3.5 Sonnet, its first release from the Claude 3.5 family. Claude 2.5 Sonnet has set a new benchmark for graduate-level reasoning, undergraduate-level knowledge, and coding proficiency. The new AI platform operates at twice the speed of Clause Opus. Based on an internal evaluation, Claude 3.5 Sonnet was able to solve 64% of problems. On the contrary, Claude Opus was able to solve only 38% of problems. On July 2, Anthropic announced the launch of a new initiative for a robust third-party evaluation ecosystem. The new initiative will be able to fund evaluations developed by third-party organizations to measure advanced features in AI models. The company strongly believes that the initiative will enhance AI safety level assessments, improve safety metrics, and develop infrastructure and tools for evaluations. The safety level assessments will encompass cybersecurity, chemical, biological, radiological, and nuclear risks, model autonomy, national security risks, and social manipulation.
A lot is going on in the AI space and several companies have emerged as interesting AI stories. We have compiled a list of the most interesting AI stories on Wall Street by studying many reports and publications and watching interviews. The list is sorted in ascending order of hedge fund sentiment, which was sourced from Insider Monkey’s proprietary database that tracks over 900 elite money managers.
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 software engineer coding at a computer, surrounded by a cluttered desk of hardware.
10 Biggest AI Stories and Ratings Updates You Should Not Miss This Week
10. Dell Technologies Inc (NYSE:DELL)
Number of Hedge Fund Holders: 82
Dell Technologies Inc (NYSE:DELL) ranks 10th on our list and is one of the biggest AI stories. The technology company is a pioneer in producing desktops, servers, storage solutions, monitors, and gaming products. As for AI, the company is making some strategic moves to establish dominance. Its new PowerEdge XE9680L is a GPU service that improves power efficiency by 2.5x. Recently, Dell Technologies Inc (NYSE:DELL) announced its new generation of AI PCs including the Qualcomm Snapdragon X and its Latitude 7455. These PCs can support 13 billion-plus parameter models, allowing users to run prominent models such as Llama 3 directly on the PC. Dell’s approach to making AI more efficient is to enable 83% of data on-premises and 50% is generated at the edge. According to the company, inferencing on premises will be 75% more cost-effective than the cloud.
The company’s position in the market is such that its AI-optimized server orders increased to $2.6 billion in Q2 2025, with shipments up 100% from the previous quarter to $1.7 billion. So far, the company has shipped over $3 billion in AI servers over the past three quarters. The company’s AI server backlog is currently at $3.8 billion, up by $900 million from the previous quarter.
At the close of Q1 2024, 82 investors held positions in Dell, with total stakes amounting to $2.98 billion. Of those, Panayotis Takis Sparaggis’ Alkeon Capital Management was the largest stakeholder with a position worth $616.36 million.
On July 1, Evercore ISI Group maintained an outperform rating on the stock and maintained its price target of $165.
Here are some comments about Dell from Scout Investments’ Q1 2024 investor letter:
“Dell Technologies Inc. (NYSE:DELL) reported results that exceeded earnings expectations and announced a better than expected AI-optimized server order pipeline. We expect Dell to participate in the growth of artificial intelligence hardware in its server, storage and personal computing franchises. Long-term, we like the company’s depth and breadth of products and services, as well as its focus on keeping costs low.”
9. Adobe Inc (NASDAQ:ADBE)
Number of Hedge Fund Holders: 108
Adobe Inc (NASDAQ:ADBE) ranks ninth on our list of the best AI stories. Adobe, the creative giant, has been disrupting the generative AI industry. The company’s AI tools allow users to add and remove images, generate high-quality images, create personalized content, and automate workflows. Some of the major products include Adobe Firefly, Adobe Express, Acrobat AI Assistant, and Adobe GenStudio.
The company’s roadmap to becoming an AI creative giant is fierce. On June 27, Adobe Inc (NASDAQ:ADBE) announced that its Adobe Content Hub is now generally available with the Adobe Experience Manager. The Adobe Experience Manager is a digital asset management system home to an entire database of images and videos, used by many Fortune 50 companies. The Adobe Content Hub, on the other hand, is transforming the content creation process and its usage, by providing users with every brand-approved asset at their fingertips. The hub is integrated with Adobe Express and Adobe Firefly, the company’s leading all-in-one design and generative AI tools.
Adobe’s AI products are highly popular in the market. Adobe Firefly has been used to generate more than 9 billion images since March 2023. In the second quarter of 2024, the company’s document cloud segment logged $782 million in revenue, up 19% year-over-year. Overall, the company expects its generative AI tools and products to gain momentum in the third and fourth quarters of 2024.
At the close of Q1 2024, 108 investors were bullish on the stock, with total stakes amounting to $9.03 billion. Of those, Ken Fisher’s Fisher Asset Management was the highest stakeholder with a position of $2.28 billion.
On June 17, Bernstein maintained an outperform rating on the stock and raised its price target from $653 to $660. Overall, the stock has a median price forecast of $625 based on price targets of 45 analysts. This represents an upside of 10% from its current price of $570.15.
Here are some comments about Adobe from Fred Alger Management’s Q1 2024 investor letter:
“Adobe Inc. (NASDAQ:ADBE) is a diversified software company that provides document and creative software to a wide audience, including creative professionals and enterprises. Its flagship products, such as Photoshop, Acrobat, and Creative Suite, set industry standards like PDF and Flash, supporting a broad range of Adobe applications. As such, we believe Adobe is a primary beneficiary of the digitization (i.e., converting analog information into digital format) spending theme. Recently, the company announced a generative Al (Gen Al) tool called Firefly which is a family of creative GenAl models which will be incorporated into Adobe’s product suite, which can be utilized by consumers and enterprises to potentially save time and effort by automating tasks like image and text generation. We believe Adobe has the potential to leverage Al by integrating software programs into its existing products and enhancing developer Application Programming Interfaces (APIs) to facilitate Al-driven workflows. While the company delivered strong fiscal first quarter operating results, shares detracted from performance after management lowered their fiscal second quarter guidance with Al related growth acceleration being pushed out into the second half of 2024 due to difficult year-over-year pricing comparison. particularly within their creative vertical segment.”
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 115
Broadcom Inc. (NASDAQ:AVGO) is one of the best AI stories on our list. The company produces a variety of semiconductor, enterprise software, and security solutions. The company’s AIOps platform includes a suite of products powered by AI and ML. These products help customers derive actionable insights from available data. Users can create customizable dashboards and collaborate across IT domains to make strategic decisions. Broadcom has a strong demand for its AI chips amid the AI boom. The company’s AI products and technologies are backed by its latest 100G/lane VCSEL and EML chips embedded in its first generation of AI networks.
On June 25, Broadcom Inc. (NASDAQ:AVGO) introduced innovations to its VMware Cloud Foundation. The new updates will allow customers to streamline innovation with modern infrastructure and enhanced developer productivity. The flagship cloud platform is also capable of managing artificial intelligence and machine learning workloads at an enterprise level and is more secure and reliable. The VMware Cloud Foundation 5.2 and VMware vSphere Foundation 5.2 will be made available in the fiscal third quarter of 2024.
12% of the company’s growth in revenue in Q2 2024 was driven by AI, which expanded by 280% year-over-year to $3.1 billion. Infrastructure revenue, on the other hand, reached $5.3 billion, up 175% year-over-year. This included $2.7 worth of revenue from VMware, up from $2.1 billion in the previous quarter. As for semiconductors, the company reported strong demand for AI networking and custom accelerators in the second quarter. Networking revenue reached $3.8 billion, up 44% year-over-year. Semiconductor revenue made up 53% of networking revenue.
115 investors were bullish on the stock at the close of Q1 2024, with total stakes amounting to $14.72 billion. Of those, Rajiv Jain’s GQG Partners held the largest stake with a position worth $3.97 billion.
On June 24, BofA Securities reiterated a buy rating on the stock and increased its price target from $2,000 to $2,150.
Here are some comments about Broadcom from ClearBridge Investments Q1 2024 investor letter:
“Among secular growth names, Broadcom Inc. (NASDAQ:AVGO) was another notable addition. Through organic growth and accretive acquisitions, Broadcom has developed into one of the largest global technology providers serving a number of industries with its semiconductor and software products. The company generates high levels of earnings and free cash flow, which will be driven in the coming years by revenue growth and margin expansion due to the acquisition of VMware and strong adoption of the Broadcom’s AI custom silicon chips. The acquisition of VMware is off to a good start and has shifted the business mix to 60% software and 40% semiconductors, enhancing growth prospects while also providing greater downside protection from higher recurring revenue.”
