In this article, we discuss the 10 important AI announcements for investors.
Investment Shifts Highlight AI Spending Challenges
Blue Whale Growth, the investment fund supported by billionaire Peter Hargreaves, has reduced its holdings in major US tech firms, mentioning concerns over their substantial AI-related spending. Financial Times reported that fund manager Stephen Yiu highlighted a significant reduction in Microsoft shares, which dropped out of the fund’s top ten holdings for the first time since 2017. He noted that the return on invested capital for the company might decline due to AI investments and hinted at potentially exiting the stock entirely if AI costs exceed cash generation.
The “Magnificent Seven” tech giants have faced growing scrutiny over their rising capital expenditures on AI infrastructure, with Wall Street increasingly wary about returns. Yiu has also reduced stakes in Meta and previously exited Amazon and Alphabet, expressing concerns over AI-driven spending outpacing profitability, the report states.
While the fund remains optimistic about Nvidia, which now represents around 10% of its portfolio, Yiu expressed less confidence in the other six companies. He also supports Broadcom, benefiting from AI infrastructure development. According to the report, Blue Whale Growth, managing £1.3 billion, has returned 24% this year, outperforming peer funds, but has reduced its exposure to US tech stocks significantly compared to benchmarks.
READ ALSO: 13 AI News That Broke the Internet and Jim Cramer’s Game Plan for This Week: 8 Stocks in Focus.
Southeast Asia’s Growing Role in AI Innovation
In stark contrast to the caution seen in Western markets, Southeast Asia’s emerging economies are racing to establish themselves as key players in the global AI landscape. According to CNBC, the region benefits from a youthful, digitally savvy population and growing government support for AI initiatives. While Singapore has already made significant strides in AI adoption, other countries, such as Vietnam, Indonesia, and Malaysia, are also accelerating efforts to harness AI for a range of industries, from agriculture to manufacturing.
This growing focus on AI offers immense potential for economic growth, creating new jobs and boosting productivity. However, as these countries ramp up their AI strategies, they face challenges related to infrastructure, digital literacy, and the need for skilled workers. As experts point out, the AI race in Southeast Asia is not just about adoption but about tailoring technology to the region’s unique needs. Despite the hurdles, the region is positioning itself as a promising center for AI innovation, and many expect that ASEAN’s commitment to AI could help its economies thrive in the global tech ecosystem.
Massive AI Investment in the U.S.
Meanwhile, SoftBank Group CEO Masayoshi Son is making a bold move to accelerate AI development globally. Son plans to invest $100 billion in the U.S. over the next four years, with a significant focus on artificial intelligence and related infrastructure. His goal is to create 100,000 AI-related jobs before the end of President-elect Donald Trump’s term, as reported by Reuters. Known for his strong advocacy for AI, Son has already made notable investments in AI companies such as OpenAI and Graphcore, further signaling his commitment to the sector’s growth. This massive investment, paired with Southeast Asia’s rising AI ambitions, highlights the growing global momentum behind artificial intelligence.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
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 scientist at a computer station, surrounded by a neural network of artificial intelligence code.
10. Webuy Global Ltd (NASDAQ:WBUY)
Number of Hedge Fund Holders: 1
Webuy Global Ltd (NASDAQ:WBUY) is an e-commerce retailer in Southeast Asia, offering a range of consumer goods and services. It integrates AI to improve community commerce, offering personalized travel planning, predictive demand analytics, and social interaction tools that optimize group decision-making.
Webuy (NASDAQ:WBUY) announced its progression to the next phase of NVIDIA’s AI Accelerator Program. Supported by Singapore’s Economic Development Board, Tribe, and Digital Industry Singapore, the program offers businesses access to NVIDIA’s advanced computing tools and expertise. The company’s CEO, Vincent Xue Bin remarked:
“We are thrilled to advance to the next stage of NVIDIA’s AI Accelerator Program…This achievement reflects our dedication to integrating AI-driven solutions into our platform to create unparalleled customer experiences. We look forward to exploring new possibilities with NVIDIA’s support.”
9. NICE Ltd. (NASDAQ:NICE)
Number of Hedge Fund Holders: 24
NICE Ltd. (NASDAQ:NICE) offers AI-powered cloud platforms that strengthen customer engagement, automate processes, and optimize decision-making.
NICE recently announced that Fulton Bank is advancing its digital transformation by adopting Enlighten-powered solutions, including CXone Mpower Copilot, Autopilot, and Expert. These tools leverage generative AI to improve self-service and agent support by integrating a unified knowledge base for faster customer resolutions. Autopilot enables omnichannel self-service, while Copilot provides real-time insights and next-best actions for agents, improving productivity and customer experience. Fulton Bank’s Krystal Davis highlighted the partnership’s role in boosting efficiency and innovation, aligning with the bank’s focus on delivering exceptional service. NICE (NASDAQ:NICE) President Dan Belanger praised the bank’s efforts to lead in customer service automation.
8. Booz Allen Hamilton Holding Corporation (NYSE:BAH)
Number of Hedge Fund Holders: 32
Booz Allen Hamilton Holding Corporation (NYSE:BAH) provides AI-focused services such as machine learning, predictive modeling, and decision analytics to governments and corporations, and not-for-profit organizations in the United States and internationally.
Booz Allen Hamilton (NYSE:BAH) announced leadership changes effective April 1, 2025. Andrea Inserra, currently executive vice president, will become Global Defense Sector President, succeeding Judi Dotson, who retires in June 2025 after 35 years. Inserra has nearly three decades of experience at Booz Allen, leading areas such as aerospace and defense strategy. Steve Escaravage, another executive vice president, will head the newly formed Defense Technology Group, focusing on advancing AI and defense capabilities. CEO Horacio Rozanski praised Inserra and Escaravage for their expertise and highlighted Dotson’s significant contributions, including fostering leadership and driving defense growth.
Rozanski highlighted that Steve Escaravage has played a significant role in scaling the company’s AI business. He said:
“Steve was instrumental in creating Booz Allen’s AI business and scaling it to its current leadership position. As our nation accelerates to outpace its adversaries, Steve is the right leader to help our clients leverage the most advanced technologies—whether built in-house, co-developed, or adapted from the private sector—to gain speed and transform their missions.”
7. Atlassian Corporation (NASDAQ:TEAM)
Number of Hedge Fund Holders: 44
Atlassian Corporation (NASDAQ:TEAM) designs and develops a wide range of software products. The company focuses on AI and analytics integration to improve business agility and developer productivity.
Mizuho analysts, led by Gregg Moskowitz, are highly optimistic about the growth of cloud adoption in the coming years and consider Atlassian (NASDAQ:TEAM) as one of the companies to benefit. The firm raised the company’s price target to $285 from $240, maintaining an Outperform rating, mentioning that its strategy is built on two key elements: advanced technologies like AI and a growing portfolio of cloud-exclusive products. The combination is expected to significantly accelerate the shift of customers from on-premises Data Center solutions to cloud-based services over the next two to three years.
6. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 71
Datadog, Inc. (NASDAQ:DDOG) provides a cloud-based platform that offers monitoring and security solutions for applications and infrastructure. The company leverages AI to improve performance analysis, improve security management, and streamline workflows across cloud environments.
Mizuho analyst Gregg Moskowitz upped his price target for Datadog (NASDAQ:DDOG) to $170, up from $155, while keeping an Outperform rating on the stock as part of his outlook for the software sector in 2025. This adjustment reflects the broader trend of increasing valuations for several companies, driven by higher comparison multiples. Moskowitz noted:
“DDOG remains a clear leader in the observability market, with multiple businesses at scale, and with potential tailwinds in the form of digital transformation, cloud migration, and GenAI.”
The firm expressed a more optimistic view than many regarding cloud adoption in the coming years, mentioning both existing on-premise customers and new clients as key drivers. This was part of its detailed 2025 software sector outlook.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) develops and commercializes technologies for wireless communication, including mobile devices, automotive systems, and IoT. The company also invests in emerging technologies, with a strong focus on artificial intelligence, extending its impact across industries like 5G, automotive, and cloud computing.
A trial between Arm and Qualcomm (NASDAQ:QCOM) begins on December 16 in Delaware, focusing on a dispute over Qualcomm’s use of Arm’s intellectual property following its $1.4 billion acquisition of chip startup Nuvia in 2021. Qualcomm used Nuvia’s designs to create AI chips for Windows laptops, which Arm claims require renegotiation of Nuvia’s license terms. Qualcomm argues its existing license covers these designs. For more details, you can check out our report: How ARM (ARM) And Qualcomm (QCOM) Can Turn A Courtroom Battle Into Mutual Success.
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) focuses on supporting AI technologies by developing advanced semiconductor processes for several industries.
Taiwan Semiconductor’s (NYSE:TSM) Chairman, Rick Cassidy told CNBC that the company’s Arizona fab is “dang near back on the original schedule.” TSMC’s first U.S.-based chip fabrication plant, located in Arizona, is the most advanced on American soil and will supply chips to major clients like Apple. Initially estimated at $12 billion, the plant’s cost has risen to $20 billion, with production delayed until 2025. It is currently in pilot production, creating 4-nanometer chips at 20,000 wafers monthly. The company plans to invest $65 billion to build three fabs at the site by 2030.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) is focused on developing products that promote global connectivity and communication. The company is making significant investments in AI, applying it to its language models and integrating it into its AR/VR technologies.
Meta (NASDAQ:META) has urged California’s attorney general to block OpenAI’s transition to a for-profit company, as reported by The Wall Street Journal. In a letter, Meta argued that allowing OpenAI to shift its business model could set a troubling precedent, enabling startups to enjoy nonprofit benefits until reaching profitability. Meta warned that this could lead to unfair advantages for investors, who would receive the same financial gains as those in traditional for-profit ventures while also benefiting from tax breaks intended for nonprofits.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) offers a variety of AI-driven solutions, including cloud services, productivity tools, and enterprise applications, designed to improve business operations and security. The company incorporates AI across its cloud computing, data analytics, and automation services to improve customer and business interactions.
Wolfe Research analyst Alex Zukin increased Microsoft’s (NASDAQ:MSFT) price target from $495 to $515 and maintained an Outperform rating on the stock. In a research note, Zukin expressed strong excitement about the software sector heading into 2025. He pointed out that improving business fundamentals, a more relaxed regulatory environment, AI-driven growth, and a healthy capital market create an ideal environment for software companies to thrive. Zukin believes this combination makes it an exciting time to be involved in the software industry.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) is a leading technology company known for its e-commerce services and offers a full range of AI tools, including custom processors and Amazon Bedrock to support AI development.
TD Cowen analyst John Blackledge is optimistic about Amazon’s (NASDAQ:AMZN) prospects in 2025, naming it his top large-cap pick for 2025, as per CNBC. His positive outlook is based on several key factors. First, he expects continued margin growth, with operating income forecasted to reach $85.6 billion, driven by the expansion of AWS and Advertising, as well as better e-commerce margins. Second, AWS revenue growth is anticipated to accelerate to 21% in 2025, supported by increased enterprise workload migration and the growth of GenAI services. Third, Amazon’s cash position is projected to grow significantly, allowing for more investment opportunities.
Blackledge also believes that faster delivery speeds will help Amazon capture more market share in the low-cost goods segment. Additionally, AWS is expected to maintain strong growth, particularly in generative AI, with revenue reaching $6.1 billion in 2025 and growing to $31 billion by 2029.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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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