In this article, we discuss 10 Important AI news and ratings for today.
DeepSeek, a Chinese AI startup, claims to have developed a GPT-4-level model at a fraction of the usual cost, spending just around $6 million. It has emerged as a significant disruptor in the AI landscape, showing its ability to deliver high-performing models like R1 with remarkable efficiency in terms of time, cost, and hardware. Its open-source approach has contributed to its rapid adoption and has allowed developers worldwide to refine and expand its capabilities. The model’s success raised questions about traditional AI development methods, especially the reliance on expensive, high-powered chips.
DeepSeek’s Impact on AI Chips Viewed as Limited by Experts
On January 27, the tech stocks felt huge aftershocks from the news, and major tech indices fell significantly. However, many experts have a different opinion. BofA downplayed concerns about reduced AI semiconductor demand following DeepSeek’s release of its R1 model, which reportedly outperforms leading Western AI models like GPT-4 while being developed with minimal resources.
While the model’s efficiency could suggest a reduced need for high-end AI chips, BofA believes this worry is overstated. The R1 model likely relies on foundational models like Meta’s Llama, where most infrastructure costs occur. Llama’s parent’s plans to increase 2025 capex by over 56% to $60-$65 billion highlight the rising demand for compute resources. BofA expects growing compute needs driven by foundational models, derivative techniques, and large-scale AI inference.
Furthermore, Wedbush analyst, Dan Ives called it a buying opportunity for American tech stocks. He wrote in a post on X:
“DeepSeek is a competitive LLM model for consumer use cases…launching broader AI infrastructure a whole other ballgame and nothing with DeepSeek makes us believe anything different. It’s about AGI for Big Tech and DeepSeek’s noise. Also no US tech using this tech. Buying oppy.”
For this article, we selected AI stocks by reviewing 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).
An aerial view of a semiconductor factory, with its intricate machinery and equipment.
10. KULR Technology Group, Inc. (NYSE:KULR)
Number of Hedge Fund Holders: 1
KULR Technology Group, Inc. (NYSE:KULR) develops and commercializes thermal management technologies for electronics, batteries, and components, serving industries like EVs, energy storage, cloud computing, AI, and 5G.
On January 27, KULR Technology Group, Inc. (NYSE:KULR) partnered with EDOM Technology, which is an NVIDIA Channel Partner and integration company, to expand its KULR Xero Vibe and KULR ONE product lines into Taiwan, which is a significant hub for AI supply chain development. The partnership allows KULR to address large-scale cooling needs for AI systems and cater to server and edge computing devices in the AI ecosystem. The collaboration aligns with global AI infrastructure expansion efforts, including The Stargate Project’s $500 billion push in the U.S.
9. SES AI Corporation (NYSE:SES)
Number of Hedge Fund Holders: 14
SES AI Corporation (NYSE:SES) develops advanced Li-Metal batteries for electric transportation, using AI to drive innovation in R&D, manufacturing, and battery safety.
SES AI (NYSE:SES) announced a major purchase order from Data Blanket for its AI-enhanced Li-Metal and Li-ion batteries on January 27. These high-energy and high-power density batteries will be used in AI-driven drones for forest fire management and border patrol. Initial deliveries were made in December 2024, with the remainder expected by mid-2025. SES AI CEO Qichao Hu highlighted the batteries’ ability to extend drone flight times, which aids firefighters in critical operations. Data Blanket CEO Omer Bar-Yohay emphasized the technology’s role in enabling longer, safer operations in challenging conditions, with plans to expand the partnership.
8. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 33
Super Micro Computer, Inc. (NASDAQ:SMCI) designs and manufactures high-performance server and storage systems, focusing on AI, cloud, and 5G applications.
On January 27, Super Micro Computer, Inc. (NASDAQ:SMCI) partnered with VCI Global Limited’s subsidiary, AI Computing Center Malaysia Sdn. Bhd. (AICC), to supply advanced AI infrastructure for the launch of AICC’s AI cloud business. The collaboration involves delivering 64 high-performance Supermicro servers equipped with 512 NVIDIA H200 Tensor Core GPUs. These GPUs, part of NVIDIA’s Hopper series, are optimized for handling large-scale AI workloads such as generative AI and advanced machine learning.
7. Digital Realty Trust, Inc. (NYSE:DLR)
Number of Hedge Fund Holders: 52
Digital Realty Trust, Inc. (NYSE:DLR) provides data center services ensuring secure and optimized worldwide network connectivity.
On January 27, Mizuho highlighted that DeepSeek’s new AI model raises questions for data center stakeholders about the need for large-scale hyperscaler spending and the timeline for monetizable use cases. The firm anticipates potential initial negative reactions for data center stocks, especially Digital Realty (NYSE:DLR), due to concerns about a shift in AI spending strategies. However, Mizuho suggests buying during any stock weakness and noted that many claims need further validation. The firm also pointed out that most REIT development projects are heavily pre-leased and expect strong double-digit pricing growth in fiscal 2025. Mizuho has an Outperform rating on Digital Realty.
6. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix, Inc. (NASDAQ:EQIX) digital infrastructure solutions that enable smooth connectivity and drive AI-powered progress for businesses.
On January 27, JMP Securities initiated coverage of Equinix, Inc. (NASDAQ:EQIX) with an Outperform rating and a $1200 price target. The firm highlighted a significant wave of digital infrastructure investment, expected to exceed $1 trillion over the next five years, supporting AI, cloud, edge computing, and other applications. The increased spending is projected to drive earnings growth and higher valuations across the digital infrastructure sector. JMP also initiated Outperform ratings on six other companies within this group.
5. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 68
Intel Corporation (NASDAQ:INTC) designs and produces hardware, such as processors and accelerators, to boost performance in AI applications.
On January 27, Wedbush lowered Intel’s (NASDAQ:INTC) price target from $25 to $20 while maintaining a Neutral rating ahead of the January 30 earnings report. The firm adjusted its long-term estimates to reflect the impact of Intel’s non-controlling interest in its fabs on earnings. Wedbush expects Q4 results to be relatively in line, with some demand pulled forward due to potential tariffs offsetting weak client markets and ongoing market share losses in servers and PCs. The analyst also expects Intel to continue losing data center share as AMD gains traction with its Turin platform.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) designs semiconductors, providing processors and graphics solutions for gaming, data centers, and embedded systems, emphasizing high-performance computing for AI applications. On January 27, Wedbush reduced its price target for AMD from $200 to $150 but maintained an Outperform rating ahead of the company’s earnings report. The firm adjusted its 2025 outlook as it lowered expectations for AI GPU sales while raising projections for server performance. It noted signs of AMD scaling back its build expectations but believes these adjustments are already reflected in market expectations.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
On January 27, Citi analyst Atif Malik maintained a Buy rating on Nvidia (NASDAQ:NVDA) with a price target of $175. The analyst discussed concerns raised by DeepSeek’s LLM, R1, which reportedly achieved high performance at a fraction of the cost of U.S. competitors. While Malik acknowledged the potential of DeepSeek’s achievement, he questioned whether its success was achieved without advanced GPUs, possibly using techniques like Distillation. Despite the possibility of global competition, Malik believes U.S. companies still have an edge due to access to advanced chips. He also pointed to recent AI capital expenditure announcements, such as Stargate, as signs of continued demand for cutting-edge GPUs.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) offers various AI-driven solutions, including cloud services, productivity tools, and business applications, to improve operations and security, alongside substantial investments in AI development.
As reported by TipRanks on January 27, Bernstein analyst Mark Moerdler reiterated a Buy rating on Microsoft (NASDAQ:MSFT) and set a price target of $516. Moerdler’s positive outlook is driven by Microsoft’s strong positioning in the AI sector and its ongoing investment in Azure. Despite a weaker performance last year, he believes the company’s AI and cloud services will fuel growth, with investor interest in these areas remaining robust. Moerdler anticipates that Microsoft’s upcoming earnings report will provide important insights into Azure’s growth and capital expenditures, which will be crucial for evaluating the company’s ability to capitalize on AI opportunities. He also expects Microsoft’s guidance for the second half of the fiscal year to be important for long-term growth.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) uses AI to improve its shopping experience, entertainment services, and operations, while also driving AI innovation through investments in projects like Anthropic, AWS partnerships, and Tranium.
On January 24, lead tech analyst at I/O Fund, Beth Kindig suggested that Amazon’s in-house AI chip shipments for its AWS cloud service are expected to increase significantly in 2025. She wrote on X:
“Amazon’s $AMZN in-house AI chip shipments to support AI demand at AWS are reportedly expected to rise ~70% YoY in 2025.“
Amazon’s Annapurna Labs designs and builds custom chips in-house to improve performance in cloud services and machine learning. By developing its own silicon, including Graviton processors, AWS can deliver faster and more efficient products. The chips undergo rigorous testing in the lab before being used in real-world applications, which ensure high performance and energy efficiency.
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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
