China is making significant strides in integrating artificial intelligence in its economy. Laying out its major policy priorities for 2025 at an annual parliamentary meeting on March 5th, it discussed how it plans to spur consumption and achieve technological breakthroughs.
Premier Li Qiang’s government work report said that AI would be integrated into the country’s manufacturing base, and that the country pledges to accelerate artificial intelligence development in the country, as per Reuters.
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The plans involve a broader deployment of large language models and leveraging China’s industrial strengths to expand AI applications. Embodied intelligence – the technology underlying humanoid robots, was also highlighted as a key industry of the future.
Chinese AI startup DeepSeek sent shock waves through the global tech market ahead of the Lunar New Year, but has also sparked a rise of Chinese companies in artificial intelligence (AI).
“DeepSeek adheres to an open-source approach and promotes the widespread application of AI technology globally, which contributes Chinese wisdom to the world. Through the rise of companies like DeepSeek, we can see the innovation and inclusiveness of China’s technological development”
-Lou Qinjian, Spokesperson for China’s parliament.
Ever since its rise, President Xi Jinping has been encouraging tech leaders to pursue AI efforts. China intends to foster more technological breakthroughs and become more self-reliant. The country has said that it wants to foster “industries of the future” including biomanufacturing, quantum technology, embodied AI and 6G technology.
In this regard, it will also explore new models for national laboratories and extend strong support and “important responsibilities” to young scientists and engineers. The application of large-scale AI models and the development of next-generation intelligent terminals and smart manufacturing terminals will also be reinforced.
“China will strive to create an enabling environment for innovation that encourages exploration and tolerates failure.”
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. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 63
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On March 5th, William Blair upgraded the stock to “Market Perform” from Underperform without a price target. According to the firm, the upgrade follows the 33% “DOGE-driven selloff” in the shares from $125 to $84 over the past three weeks.
“We are upgrading our rating on shares of Palantir to Market Perform after the 33% DOGE-driven selloff from $125 to $84 over the past three weeks. While valuation is still frothy with potential downside risk of greater than 40% on government contract delays, there have been positive developments.”
-William Blair analysts led by Louie DiPalma.
The firm anticipates Palantir to win a new contract with the U.S. government. The contract will implement a centralized payment tracking system to assist in overall cost-cutting strategies and the Department of Defense’s annual audit. Palantir is also pursuing additional contracts with the U.S. Army.
“Its combination of revenue growth (31% guidance for 2025) and operating margin (45% for 2025) rank among the highest in all software. With the focus on growth, we did not fully appreciate Palantir’s operating leverage and ability to grow with minimal hiring. Palantir’s revenue from 2022 through 2024 grew 50% while headcount increased by only 3%.”
9. 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 5th, KeyBanc analyst Eric Heath lowered the firm’s price target on the stock to $450 from $480 but kept an “Overweight” rating on the shares. According to Heath, Crowdstrike has delivered a “solid quarter”, with sequential growth in NNARR almost as strong as last year. CCP offers are being terminated, and the July outage is several quarters behind now.
CCP, or Customer Commitment Packages, were being offered to customers after the July 19 outage incident in 2024 as an incentive to retain customers. Since the incident impact has diminished, the company has decided to terminate the program. The analyst further noted how fiscal 2026 revenue guidance was above expectations, but the margin outlook was lower “due to investments in platform resiliency, AI efficiencies, S&M costs stemming from CCPs, and increased marketing costs”. The firm anticipates NNARR to reaccelerate in the back half of fiscal 2026 and accelerate further in fiscal 2027.
8. 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 March 3rd, AMD, together with Jio Platforms Limited, Nokia, and Cisco, announced plans to form an innovative, new Open Telecom AI Platform at the Mobile World Congress 2025.
The Telecom AI Platform will be developed to support operators and service providers with real-world, AI-driven solutions, paving the way for unmatched efficiency, security, capabilities, and new revenue opportunities for the industry. The AI Platform will create a new central intelligence layer for telecom and digital services, integrating AI and automation into each layer of network operations. Agentic AI and both Large Language Models (LLMs), domain-specific Small Language Models (SLMs), and non-GenAI machine learning techniques will be used to enable end-to-end intelligence for network management and operations.
“AMD is proud to collaborate with Jio Platforms Limited, Cisco, and Nokia to power the next generation of AI-driven telecom infrastructure. By leveraging our broad portfolio of high-performance CPUs, GPUs, and adaptive computing solutions, service providers will be able to create more secure, efficient, and scalable networks. Together we can bring the transformational benefits of AI to both operators and users and enable innovative services that will shape the future of communications and connectivity.”
-Lisa Su, chair and CEO, AMD.
7. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 120
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. On March 5th, Daiwa initiated coverage of the stock with a “Neutral” rating and $120 price target. According to the firm, Vistra is a “great” artificial intelligence story. However, this AI story is already in the share price.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. On March 5th, the company announced its most powerful Mac ever made, Mac Studio, featuring the M4 Max and the new M3 Ultra chip. Made for professionals, the device features extensive connectivity with Thunderbolt 5, enabling superfast data transfer, charging, and connection; along with new capabilities. Packed in a compact and sleek design, the Mac Studio features a powerful CPU, Apple’s advanced graphics architecture, higher unified memory capacity, ultrafast SSD storage, and a faster and more efficient Neural Engine.
It is also designed to be an AI powerhouse, capable of running large language models (LLMs) with over 600 billion parameters entirely in memory. In addition, it is fit for Apple Intelligence, Apple’s personal intelligence system. The device is available to pre-order today, with availability beginning March 12.
“The new Mac Studio is the most powerful Mac we’ve ever made. A complete game-changer for pros around the world — powering both home and pro studios — Mac Studio sits in a class of its own, offering a staggering amount of performance in a compact, quiet design that fits beautifully on your desk. With this new Mac Studio, we’re delivering even more extreme performance with M4 Max and M3 Ultra, support for half a terabyte of unified memory, up to 16TB of superfast storage, and Thunderbolt 5 connectivity. Mac Studio truly is the ultimate pro desktop.”
-John Ternus, Apple’s senior vice president of Hardware Engineering.
5. 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. On March 4th, Phillip Securities analyst Yik Ban Chong maintained their bullish stance on the stock, giving a “Buy” rating. According to the analyst, Nvidia’s buy rating stems from its robust performance in key segments and potential for future growth. In particular, the demand for Nvidia’s RTX 50 series GPUs is strong, demonstrating a potential recovery in its gaming revenue.
This is despite the company facing supply constraints in the gaming segment, a challenge that the firm believes is short-term. Blackwell shipments ramp-up has also been successful, contributing to revenue growth without hitting gross margins significantly. Moreover, the automotive segment has demonstrated explosive growth backed by autonomous vehicle chips, while increased CAPEX from hyperscalers is further expected to boost demand in the data center segment. The firm further added how previous packaging issues have been resolved, and that Nvidia is well-positioned to meet AI GPU demand, all of which contribute to an optimistic outlook.
4. 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 5th, BofA maintained a “Buy” rating and $225 price target on shares of Google parent Alphabet Inc. (NASDAQ:GOOGL). The firm discussed Google’s recent blog post that has revealed that it now processes more than 5 trillion searches annually, as compared to 2 trillion in 2016.
This implies that Google’s query volume has grown at a 12% compound annual growth rate over 2016-2024, 7 points below the 19% CAGR for search revenues. The analyst noted how this suggests strong usage growth may have contributed more to revenues than improved search monetization, adding that the company “had impressive 8-year volume growth and monetization could be adding 6-7pts of growth annually.” The analyst concluded by stating that these disclosures can help build confidence in the company’s ability to capitalize on AI for future growth.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 262
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On March 5th, Meta chief product officer Chris Cox said that the company’s upcoming Llama 4 artificial intelligence software will help power AI agents. Discussing the next version of Meta’s open-source AI software for developers during a public interview at Morgan Stanley’s technology, media and telecom conference in San Francisco, Cox said that the Llama 4 is going to have reasoning capabilities and create AI agents capable of using a web browser and other tools.
AI agents are software programs that leverage artificial intelligence to conduct multi-step tasks instead of generating responses to written prompts. Cox highlighted that more advanced AI models can be used to underpin AI agents to allow them to complete specific business-related tasks. Clara Shih, Meta’s head of business AI, told CNBC how Meta believes more businesses will use AI agents to automate complex tasks in the future.
“We already have these trusted relationships with 200 million small businesses around the world. Very soon, each of those businesses are going to have these AIs that represent them and help automate redundant tasks, help speak in their voice, help them find more customers and provide almost like a concierge service to every single one of their customers, 24/7.”
– Clara Shih.
2. 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 5th, it was announced that the UK competition watchdog has ended its investigation into the partnership between Microsoft and the artificial intelligence company OpenAI.
According to Britain’s Competition and Markets Authority (CMA), the software giant did not have the level of control over the AI Company to warrant further investigation. Back in 2013, the CMA said that it was assessing whether Microsoft’s $13 billion investment into the AI startup gave it de facto control over OpenAI policy, raising competition concerns.
“We have found that there has not been a change of control by Microsoft from material influence to de facto control over OpenAI. Because this change of control has not happened, the partnership in its current form does not qualify for review under the UK’s merger control regime.”
– CMA’s executive director for mergers, Joel Bamford.
Bamford did add that the decision should “not be read as the partnership being given a clean bill of health on competition concerns”.
According to a Microsoft spokesperson, the partnership with OpenAI and its continued evolution “promote competition, innovation, and responsible AI development”.
“We welcome the CMA’s conclusion, after careful and prudent consideration of the commercial realities, to close its investigation.”
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 4th, Reuters reported that Amazon has formed a new division focused on agentic artificial intelligence that will help users and customers automate more of their lives.
Agentic AI is a type of artificial intelligence (AI) that can automate tasks without requiring user prompts. According to an email from CEO Matt Garman, viewed by Reuters, the new group will be led by AWS executive Swami Sivasubramanian, previously vice president of AI and data. Garman deems “Agentic AI has the potential to be the next multi-billion business for AWS.”
“We have the opportunity to help our customers innovate even faster and unlock more possibilities, and I firmly believe that AI agents are core to this next wave of innovation.”
– AWS CEO Matt Garman.
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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