In this article, we will take a detailed look at the 10 Latest AI News You Shouldn’t Miss.
Anastasia Amoroso, iCapital chief investment officer, said in a latest program on CNBC that 2025 will be the year of AI software, data centers and power. She believes the AI rally is broadening out.
“Artificial intelligence, as I mentioned, is carrying itself over into 2025, and I think it’s broadening. Last year, last two years, have been about semiconductors. I think this year has to be about AI software; it has to be about AI monetization, but it also has to be about AI power. And it’s not just, you know, a number of headlines talking about data centers and how much they consume, and the fact that I think you need eight times the electricity to run an AI data center. It’s an actual real trend, which I also think the Trump Administration is going to support as well.”
The analyst also said investors should consider alternative investments or private markets as she believes private equity valuations are below the levels seen in public markets.
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For this article we picked 10 AI stocks trending on latest news. With each stock we have mentioned the number of hedge fund investors. 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 array of news articles and video clips with the company logo.
10. Applovin Corp (NASDAQ:APP)
Number of Hedge Fund Investors: 51
Jim Cramer in a latest program on CNBC said Applovin Corp (NASDAQ:APP) is overvalued and warned investors to be cautious about the stock:
“I think this may be incredibly overvalued, and you can’t short it—there’s too many people betting against it. But this is mobile game ad placement, and I think anyone can come into this. I think there actually know people who are coming into it.
And it’s one of those stories, David, where they big margin. So you came in with anything smaller, you know, any lower price, you could obliterate them. Now, they would say, “Look, we are so entrenched.” I say, “Give me a break.”
I mean, I know that you do have earnings. They do have earnings—they could earned 350. But I just think a stock that started the year at a fraction of where it ended, at $39 to 323, is a stock that you ought to think twice about.”
Alta Fox Capital stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q3 2024 investor letter:
“Alta Fox has followed AppLovin Corporation (NASDAQ:APP) since its IPO in 2021, watching its initial high valuation (>30x EBITDA) through the mobile gaming downturn in 2022, failed Ironsource bid), and its consistent share gains from Unity/Ironsource. After years of diligence and consistent admiration for APP’s adtech revenues, we gained conviction in Applovin’s data-driven competitive advantage and initiated a position this summer.
We purchased shares at~11x NTM EBITDA, an attractive price relative to APP’s growth and quality compared to similar adtech peers. The entry price also appeared inexpensive relative to APP’s own historical valuation, which averaged -20x EBITDA. We felt confident in underwriting mid-teens revenue growth and modest operating leverage over the medium-term. Without any multiple expansion, we expected to earn a low-20%s IRR in the stock-an attractive return for owning such a dominant, secular growth business.
As the year progressed, the market increasingly rewarded APP for its quality & growth, nearly doubling its forward EBITDA multiple from our cost basis. With the valuation nearing 20x EBITDA, we no longer saw a sufficient margin of safety and exited our position at roughly 2x our cost basis.”
9. Snowflake Inc (NYSE:SNOW)
Number of Hedge Fund Investors: 71
Snowflake Inc (NYSE:SNOW) was among the leading artificial intelligence software stocks to watch in the year ahead, say analysts at Wedbush.
Snowflake Inc (NYSE:SNOW) is a Cloud-based data warehouse offering data storage and analytics services. Snowflake Inc (NYSE:SNOW)’s moat lies in its data technologies that let companies analyze and make sense of unstructured data. Amid the generative AI boom, companies are ready to spend a fortune to use huge datasets to their advantage. This would bode well for Snowflake Inc (NYSE:SNOW). The company’s usage-based pricing model also gives it an edge in the market. Snowflake Inc (NYSE:SNOW) expects the total addressable market for its Cloud data platform to rise to $342 billion by 2028, which is double the market size of 2023.
Baron Global Advantage Fund stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q3 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a leading cloud data platform predominantly used for data analytics. Shares fell 15.2% in the third quarter due to a cybersecurity incident, a shifting competitive landscape, a change in leadership, and general macro complexities which are pressuring customer IT budgets. With generative AI (Gen AI) front and center, both investors and customers are closely evaluating Snowflake’s positioning in the future data ecosystem. Databricks and other competitors whose core users are data scientists who are also key buyers of Gen AI technologies, are benefiting. In addition, while Snowflake’s product innovation push should fuel future growth, it may also lead to short-term headwinds to profitability. Management reported healthy demand for its core data analytics, evidenced by solid growth rates among current customers alongside new go-to-market initiatives that could support growth. We are optimistic the new CEO, Sridhar Ramaswamy, can lead the company towards an AI-centric strategy, and therefore remain shareholders.”
8. Crowdstrike Holdings Inc (NASDAQ:CRWD)
Number of Hedge Fund Investors: 74
Adam Coons from Winthrop Capital recently said while talking to Schwab Network that he’s bullish on Crowdstrike Holdings Inc (NASDAQ:CRWD) because of AI.
“We looked at cybersecurity as a way to play the growth in AI but with a more measurable approach. When you consider something like Crowdstrike Holdings Inc (NASDAQ:CRWD), sure, valuations might be a bit hard to stomach. However, the growth potential and the clear necessity for a new generation of cybersecurity make Crowdstrike Holdings Inc (NASDAQ:CRWD) a leader in the space.
When you look at the adoption of Falcon, for example, within their product pipeline, it underscores that this is a market — and I know this is probably an overused phrase — but it’s definitely a pie that’s growing. It’s clear it will continue to grow because AI is only going to make cybersecurity more complex. From a business standpoint, that complexity increases billable opportunities at higher rates, which is why we like the space, particularly Crowdstrike Holdings Inc (NASDAQ:CRWD).”
Despite the tech outage incident, the fundamental story of Crowdstrike Holdings Inc (NASDAQ:CRWD) remains unchanged. Wedbush Securities last year estimated that less than 5% of CrowdStrike’s customers might switch providers, potentially impacting revenue by $150 million out of the projected $3 billion in sales for fiscal year 2024.
Fidelity Growth Strategies Fund stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q3 2024 investor letter:
“A non-benchmark stake in CrowdStrike Holdings, Inc. (NASDAQ:CRWD) (-40%) was the biggest detractor among individual stocks. The shares of this cybersecurity platform provider fell precipitously in July, after a glitch in a CrowdStrike software update led to a global outage for many of its customers that, among other impacts, caused the mass cancellation of flights around the world. After bottoming out in early August, the stock made a partial rebound by quarter end, but we exited the fund’s holding during the summer.”
7. Oracle Corp (NYSE:ORCL)
Number of Hedge Fund Investors: 91
Oracle Corp (NYSE:ORCL) was among the leading artificial intelligence software stocks to watch in the year ahead, say analysts at Wedbush.
Oracle Cloud Infrastructure (OCI) technology has been gaining traction after the company signed deals for the tech with major companies including Meta and Amazon. Oracle (ORCL) has been consistently signing deals with major AI players each quarter. In the second quarter, Oracle and Meta agreed to a partnership where Meta would gain access to Oracle Cloud Infrastructure (OCI) and the two companies would work together to develop AI agents using Meta’s Llama models.
OCI’s growing influence can be linked to the uniqueness of its data centers. Oracle’s data centers stand out because of their ability to automate operations. The racks used in these data centers and the functionality of the centers remain consistent, regardless of size or region. This automation and standardization make Oracle’s data centers more efficient, giving OCI a significant edge over its competitors.
Parnassus Value Equity Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q3 2024 investor letter:
“Oracle Corporation (NYSE:ORCL) announced second-quarter results that exceeded consensus expectations, driven by growth in its cloud infrastructure business, which is benefiting from demand for AI applications. Investor sentiment was further bolstered by the company’s announcement of a new partnership with Amazon.”
6. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 99
Adam Coons from Winthrop Capital recently said while talking to Schwab Network that he’s been staying away from Tesla Inc (NASDAQ:TSLA) shares amid high expectations and valuation concerns:
“This is really a narrative trade right now, post-election. When you see the stock up, as I mentioned, over 50%, it was more than priced to perfection. So, having a miss like this, I’m surprised it’s not down more. But there’s enough momentum and narrative to support the stock right now.
I think it’s set up with really high expectations, which is why we’re staying away from it. Would I short the stock? Not at all. For us, we’ve stayed away and kept it out of our portfolios because of the level of volatility and uncertainty.
This is primarily a story about autonomous driving and the potential for a less stringent regulatory environment. However, I think that’s a tough case to make. Trump alone isn’t going to be able to make any significant moves here.”
Looking beyond the recent spike in Tesla shares amid Donald Trump’s victory, Tesla’s fundamentals are challenged. How? Tesla Inc’s (NASDAQ:TSLA) key robotaxi event was short on details. Notably absent was the discussion of a “more affordable” model that Musk had previously mentioned to boost confidence in Tesla’s vehicle sales growth outlook.
What about the $30,000 price tag claim?
Musk has indicated that the Cybercab will have a production cost of approximately $30,000. Operating within the robotaxi fleet is projected to cost around $0.20 per mile. With a production cost of $30,000, the retail price of the Cybercab is likely to exceed this figure. For instance, if the Cybercab is priced at $30,000 per unit, that translates to $15,000 per seat. In contrast, the average price per passenger seat in Tesla Inc (NASDAQ:TSLA)’s most affordable long-range RWD Model 3—factoring in full self-driving (FSD) licensing—is under $10,000 ($29,990 post-incentive vehicle price plus $8,000 for the FSD license, divided by four passenger seats). Regarding operational costs, while the Cybercab is expected to cost $0.20 per mile, charging the Model 3 is estimated at under $0.10 per mile, leaving a significant margin to cover maintenance and downtime.
There is a lot of hype around Tesla Inc (NASDAQ:TSLA) robo taxis but many believe they will not be enough to fix the company’s long-term challenges.
What are these challenges?
Tesla Inc’s (NASDAQ:TSLA) product lineup is showing signs of stagnation, with over 95% of sales still coming from the Model 3 and Model Y. Meanwhile, competitors are rolling out more advanced models. Even Rivian’s CEO suggested Tesla Inc (NASDAQ:TSLA) could be nearing market saturation for these models. According to Reuters, Tesla’s market share in Europe is slipping as legacy automakers like BMW post stronger sales. Chinese competitor BYD is also gaining ground in Europe, despite talk of tariffs.
Delaware Ivy Core Equity Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q3 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) – Though it isn’t a holding within the portfolio, Tesla continues to be a cult-like stock with weak fundamentals dependent on highly speculative development of autonomous driving technology. The company’s share price moved higher during the quarter after weakness in the year-to-date period.”
5. Advanced Micro Devices Inc (NASDAQ:AMD)
Number of Hedge Fund Investors: 107
David Nelson from Belpointe Asset Management in a latest program on Schwab Network mentioned some possible opportunities for Advanced Micro Devices Inc (NASDAQ:AMD) moving forward:
“I think there’s a place for Advanced Micro Devices Inc (NASDAQ:AMD). It’s probably on the inference side right now. It’s the training of large language models that has been, you know, quite necessary, and even the retraining of these models.
But as you broaden this out and all these companies use this, then you need inference where you’re actually processing a request, whether it’s a prediction or you’re performing a task. Advanced Micro Devices Inc (NASDAQ:AMD) could play, may play a role there.”
Advanced Micro Devices (NASDAQ:AMD) bulls believe the market should stop comparing the company’s chips with Nvidia and focus on its data-center growth and its competitive edge over other players like Intel. Advanced Micro Devices (NASDAQ:AMD)’s strong growth in the data center segment is indeed impressive, driven by Instinct GPU shipments and strong sales of EPYC CPUs. Advanced Micro Devices (NASDAQ:AMD) will continue to benefit from organic growth catalysts in this segment despite the competition from Nvidia. According to Goldman Sachs Research, global data center demand could surge by 160% by 2030. In the U.S., data centers are projected to use 8% of total power by 2030, up from 3% in 2022. McKinsey estimates that adding the required U.S. capacity will need over $500 billion in infrastructure investment by the decade’s end.
Rogue Funds stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q3 2024 investor letter:
“We sold our Advanced Micro Devices, Inc. (NASDAQ:AMD) puts for a sold profit after the Japan Carry Trade caused volatility to spike considerably and allowed for a significant increase in the value of our put options. I felt that was an ideal time to capture these profits which has turned out to be a good choice in hindsight.”
