The most important conference in the tech world is in full swing, yet investors are skeptical about what’s ahead. According to Jensen Huang, his company is well-positioned to navigate a shift in the artificial intelligence industry, particularly where businesses are moving from training AI models to getting detailed answers from them.
Huang also defended his company’s lead in selling costly AI chips to customers, an aspect that was recently questioned after China’s DeepSeek created a competitive chatbot with relatively fewer chips.
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Despite Huang’s reassuring remarks, the chipmaker’s stock fell more than 3%, reflecting how investors haven’t been entirely assured by Huang’s presentation. Calling the conference the “Superbowl of AI”, Huang commented that “almost the entire world got it wrong,” regarding DeepSeek.
“The amount of computation we need as a result of agentic AI, as a result of reasoning, is easily 100 times more than we thought we needed this time last year.”
-Huang, when referring to autonomous AI agents that require little human intervention for routine tasks.
At the same time, new AI models and tools are being launched in the tech world as businesses and countries compete in an attempt to lead the AI arms race. In the latest news, tech giant Tencent has unveiled a suite of new artificial intelligence tools capable of converting text and images into 3D visuals. The move marks the growing Chinese momentum in the field of generative AI.
Similarly, Baidu has released two new AI models which are freely available to individual users ahead of schedule. ERNIE 4.5 is a native multimodal foundation model, while ERNIE X1 is a reasoning model with deep-learning capabilities. The company aims to increase user involvement across its platforms, attempting to combine these models into its larger ecosystem.
As major players continue to release new models and tools, the race to dominate the AI landscape intensifies even further. It’s worth waiting to see who eventually ends up leading the AI arms race and how these technologies end up making an impact on the business world and society.
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. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 42
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 March 18, Mizuho analyst Maheep Mandloi initiated coverage of Bloom Energy (NYSE:BE) with a Neutral rating and a $28 price target. According to Mandloi, Bloom’s innovative fuel cell technology offers a cleaner substitute to traditional energy sources, positioning it well in the growing data center market.
Regardless, the stock has experienced a significant rise due to the AI theme, which may not be sustainable. The firm further said there is uncertainty surrounding the conversion of safe harbor orders into actual revenue, adding to risk related to the stock. Moreover, despite Bloom’s shares enjoying a high valuation and reflecting investor optimism, they also suggest limited immediate upside potential.
9. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 63
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. One of the most notable analyst calls on Tuesday, March 18, was for Palantir Technologies. Jefferies reiterated the stock as “Underperform” with a $60 price target. The firm said that it is sticking with its underperform rating.
The rating reflects how analysts from the firm returned from Palantir’s AI Platform customer event “impressed”. The return on investment case studies demonstrates how Palantir’s products are helping transform businesses. Nevertheless, the positive momentum is “baked” into Palantir’s valuation.
“This positive momentum is baked into PLTR’s valuation at 45x CY26E, the most expensive stock in our coverage. Fundamentals have been strong, but valuation remains the biggest concern and insiders continue to sell with co-founder Stephen Cohen selling another $310M in shares over the past few days.”
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 12, the company announced a distribution agreement with Dicker Data, an Australian-owned and operated technology hardware, software, and cloud distributor. The agreement will bring CrowdStrike’s AI-powered Falcon® cybersecurity platform to Dicker Data’s partners and customers across Australia and New Zealand (ANZ).
By expanding CrowdStrike’s ANZ channel ecosystem, Dicker Data’s partner base of leading resellers and managed service providers (MSPs/MSSPs) will be able to streamline vendor integration and stop breaches through the Falcon platform. The Falcon platform’s market-defining AI capabilities, Falcon® Cloud Security, and additional best-in-class modules will allow Dicker Data to empower partners to modernize security operations, reduce vendor costs, and eliminate coverage gaps.
“Dicker Data seeing the opportunity to further expand our ANZ channel ecosystem underscores our market position as cybersecurity’s generational platform. Together, we will accelerate CrowdStrike’s partner-first go-to-market strategy, unlocking greater opportunities for mid-market partners in the region. We look forward to working with Dicker Data to drive even more partner and customer adoption of the Falcon platform, simplifying cybersecurity and protecting organizations against sophisticated threats with the world’s most advanced AI-native technology.”
-Jon Fox, vice president, channels and alliances, CrowdStrike Asia Pacific and Japan.
7. 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 18, RBC Capital Markets analyst Tom Narayan lowered his price target to $320 per share from $440 on the electric vehicle maker. The firm has lowered its Full Self-Driving (FSD) pricing and robotaxi penetration assumptions for Tesla, leading to the price target cut.
“We now assume Tesla FSD pricing drops to $50/month in 2026 from $100/mo today.” Tesla is also facing pressure from overseas rivals, particularly in China. “While we do think it unwise to extrapolate too much from car demand dynamics, Tesla is losing market share in Europe and China…In China in particular, competition is intensifying. Further, on robotaxis, we think it likely that domestic OEMs [original equipment manufacturers] will dominate the market. As a result, we now lower our market share assumption to 10% from 20% in both markets.”
6. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 161
Broadcom Inc. (NASDAQ:AVGO) is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets. On March 18, the company announced highlights and new program elements of VMware Explore(R) 2025, an essential cloud event for IT professionals. Kicking off in Las Vegas on August 25, it will move on to select cities in Asia Pacific, Japan, and Europe. The event will feature technical and business-level sessions, panel discussions, technical deep-dive sessions, expert roundtables, instructor-led and self-paced labs, private AI, and more. Attendees will be able to leverage actionable insights on technical topics as well as access to an extensive ecosystem including VMware Cloud Service Providers (VCSPs), hyperscalers, Value-Added OEMs (VAO) partners, and VMware Technology Alliance Partners (TAP).
“We are excited to offer Explore across more countries and communities while also building more engagement and choice with our flagship Las Vegas event. With Explore 2025, we’re delivering more content sessions, a new pricing model and additional locations to better meet the needs of IT practitioners, innovators and leaders. The goal remains to provide our customers with insights, tools and engagement opportunities required to succeed in a continually dynamic IT environment.”
-Joan Stone, vice president of corporate marketing, Broadcom.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. One of the most notable analyst calls on Tuesday, March 18, was for Apple Inc. Evercore ISI reiterated the stock as “Outperform” and raised its price target on the stock to $275 per share from $260. According to the analysts, Apple is positioned to remain a ‘tech staple’ and obtain the benefits of the artificial intelligence boom. It also has the potential to boost gross margins through product mix, pricing strategies, as well as the impact of stock buybacks. The firm further said that Apple is poised to capitalize on artificial intelligence (AI) monetization without the need to invest heavily in graphics processing units (GPUs).
“AAPL remains positioned to sustain mid-single digit sales and low/mid-teens FCF & EPS growth over next several years with less volatility & high consistency.”
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. One of the most notable analyst calls on March 17, was for Nvidia Corporation. UBS reiterated the stock as “Buy” with a $185 price target, stating that it is extremely bullish after hearing from the company on Day 1 of its Global AI Conference.
“NVDA’s edge AI panel highlighted the sheer breadth of its offerings spanning service provider, enterprise, industrial, embedded, and physical AI. We all tend to focus on data center, but the opportunities span far wider.”
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 18, the company announced that it would buy Wiz for about $32 billion in a quest to strengthen its position in the cloud-computing race against Amazon.com and Microsoft.
The deal would enable Google with fast-growing cybersecurity solutions that companies use to remove critical risks. It would also test the Trump administration’s willingness to approve significant tech M&A after a few years of tight regulatory scrutiny.
Wall Street is anticipating anti-trust policy changes under President Donald Trump and Andrew Ferguson, his pick who will lead the Federal Trade Commission. Ferguson is expected to ease regulations on mergers and acquisitions. However, Trump said he would continue heavy scrutiny on Big Tech.
“There will likely be a microscope on the deal by investors, given Google’s lackluster historical track record with capital allocation plan, specifically around M&A.”
-Dave Wagner, portfolio manager at Aptus Capital Advisors.
Subject to regulatory approvals, Alphabet expects the deal to close in 2026.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On March 18, Meta Platforms CEO Mark Zuckerberg took to Threads to announce that the company’s “open” AI model family, Llama, hit 1 billion downloads. That’s an increase from 650 million downloads as of early December 2024, a 53% increase over a roughly three-month period. Llama is a family of open-source, large language models (LLMs) from Meta AI, and is part of Meta’s efforts to develop a comprehensive AI product ecosystem. These models and tools are free for use under a proprietary license.
“Llama, our open source collection of AI models, just hit 1 billion downloads. Open sourcing AI is crucial to ensuring people everywhere have access to the benefits of AI, and every download of Llama moves us closer to that goal.”
-Meta Platforms, Inc.
1. 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, JPMorgan reiterated the stock as “Overweight” and said Amazon remains a top idea.
“We believe AMZN should gain retail share in a recessionary environment given low prices, wide selection, fast delivery, & stronger growth in non-discretionary items.”
This development coincides with a recent analysis by Kevin McLaughlin and Anissa Gardizy from The Information. Their report claims that Amazon (AMZN) is undercutting Nvidia with aggressive AI chip discounts. AWS is reportedly offering server rentals powered by their Trainium chip which offers computing capabilities similar to Nvidia’s H100 semiconductor. However, Amazon’s chip comes at only 25% of the price. The move aims to draw tech giants, including Apple, who are experimenting with the latest version of the Trainium chip as an alternative to Nvidia’s offerings, underscoring Amazon’s strategic focus on AI.
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 time frame. 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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