Goldman Sachs raised its target price for Chinese stocks today. They estimate that AI adoption could significantly boost earnings growth and possibly bring in $200 billion of inflows. DeepSeek’s AI breakthrough has led these tech stocks on a strong rally, reigniting investor interest and optimism in Chinese technologies and capabilities. The firm raised its 12-month target price for China’s CSI300 to 4,700 from 4,600. It also raised its price target for MSCI China to 85 from 75.
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The Chinese startup may be all the rage for Chinese stocks, but some countries are exercising caution all the same. In the latest news, South Korea’s data protection authority has suspended new downloads of the Chinese AI app from DeepSeek. This is after DeepSeek acknowledged failing to take into account some of the agency’s rules on protecting personal data. The Personal Information Protection Commission (PIPC) has notified that the app service will be resumed once improvements are made according to the country’s privacy law. Even though DeepSeek’s web service remains accessible in the country, new downloads of the app are restricted.
Previously, the US Navy also instructed its members to avoid using artificial intelligence technology from China’s DeepSeek. According to the Navy, DeepSeek’s AI was not to be used “in any capacity” due to “potential security and ethical concerns associated with the model’s origin and usage”. In a similar move, Italy’s data protection authority, the Garante, has also ordered DeepSeek to block its chatbot in the country. This is because it failed to address the regulator’s concerns over its privacy policy.
Notably, BBC reported that the the first member of a Western government to raise privacy concerns about DeepSeek has been Australia’s science minister, Ed Husic. Husic has raised “data and privacy management” concerns over DeepSeek.
“I would be very careful about that, these type of issues need to be weighed up carefully”.
DeepSeek has failed to respond to requests for comment on these issues.
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.
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10. Informatica Inc. (NYSE:INFA)
Number of Hedge Fund Holders: 22
Informatica Inc. (NYSE:INFA) is a leader in enterprise AI-powered cloud data management. On February 14, Goldman Sachs downgraded Informatica (INFA) to “Neutral” from Buy with a price target of $20, down from $38. The downgrade, issued after the company’s fourth-quarter results, reflects on its key metrics falling short of consensus expectations. The firm cited several reasons for the downgrade, particularly its slower-than-expected transition of Informatica to cloud services.
The company’s guidance for fiscal year 2025 suggests a 25% growth in Cloud ARR. This guidance fell short of the firm’s estimate of 35% and was also beneath the company’s previous mid-term guidance of a 31-33% compound annual growth rate from fiscal years 2023 to 2026. This target has now been withdrawn. For both cloud and self-managed/maintenance ARR, excluding migrations, the company has been experiencing higher churn rates which is partly due to weaker execution on renewals.
Another factor negatively impacting overall revenue growth has been customers opting for shorter-duration self-managed contracts. The accelerated shift from maintenance to cloud modality, despite demonstrating strong expansion once customers transition to Informatica’s AI-powered Intelligent Data Management Cloud (IDMC) has also led to a short-term reduction in net new ARR. This is due to the accounting treatment of subscription credits when a maintenance customer fully migrates to the cloud.
9. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 25
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers. On February 14, Andrew Percoco from Morgan Stanley maintained a “Buy” rating on the stock with a price target of $28.00.
Percoco’s buy rating stems from Bloom’s recent partnership with Chart Industries for carbon capture technology. This collaboration will allow Bloom to enhance the deployment of its fuel cells by enabling near zero-carbon power solutions, particularly useful for data centers that want to meet emission targets.
The firm further noted that AEP’s earnings call and regulatory filings strengthen Bloom Energy’s outlook, suggesting how Bloom’s partnership with Chart is a compelling option for data centers seeking clean and reliable energy sources.