On March 6th, CoreWeave, an Nvidia-backed cloud-computing startup, denied claims in a Financial Times report that Microsoft had pulled the plug in some of the agreements it had signed with the cloud provider due to service delivery challenges and missed deadlines.
“We pride ourselves in our client partnerships and there have been no contract cancellations or walking away from commitments. Any claim to the contrary is false and misleading,” a CoreWeave spokesperson told Reuters in an emailed statement.
The news follows after Stack Capital Group made an investment of $10 million in the AI-infrastructure company, according to a company release on March 5th.
“Given its growing data center presence across the United States, Europe, and Canada, CoreWeave is extremely well-positioned to continue capitalizing on accelerating global demand for AI infrastructure and compute capabilities,” said Jeff Parks, CEO of Stack Capital.
According to a Reuters report on March 7th, the Azure parent has begun testing out models from xAI, Meta and DeepSeek to develop AI models to compete with OpenAI.
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, as of Q4 2024.
At Insider Monkey we are obsessed with 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).
A close-up of a complex network of integrated circuits used in logic semiconductors.
10 Tech News Updates Investors Should Not Miss
10. Arbe Robotics Ltd. (NASDAQ:ARBE)
Number of Hedge Fund Holders: 7
Arbe Robotics Ltd. (NASDAQ:ARBE) is a semiconductor company that provides 4D imaging radar solutions for tier 1 automotive suppliers and automotive manufacturers. On March 5th, the company reported a significant drop in its revenue and a larger than expected net loss during the fourth quarter of 2024. Net loss widened to $49.3 million from $43.5 million in 2023.
A rather poor performance during 2024 can be attributed to broader economic shifts that have impacted the automotive industry. However, the company is aiming to secure fourth design-ins with automakers in 2025 and plans to invest between $5 million to $15 million.
9. Agora Inc. (NASDAQ:API)
Number of Hedge Fund Holders: 11
Agora Inc. (NASDAQ:API) provides developers with APIs to embed real-time voice, video, interactive streaming, chat, and AI capabilities into their applications. On March 5th, the company launched a conversational AI Engine which enables developers to create interactive voice experiences compatible with any AI model. With a seamless real-time engagement, the engine provides ultra-low latency responses and greater voice processing to produce immersive voice AI experiences.
“Most AI models don’t yet offer the ability to interact via voice, and those that do haven’t optimized the experience,” said Tony Zhao, CEO of Agora.
The company is also looking to extend Conversational AI Engine’s features into its App Builder product. The new offering has a wide range of uses such as customer support, IoT integration, virtual shopping assistance, mental health support and live tutoring.
8. Symbotic Inc. (NASDAQ:SYM)
Number of Hedge Fund Holders: 16
Symbotic Inc. (NASDAQ:SYM) builds and operates automated warehouse systems for clients. On March 6th, the company announced the activation of a warehouse modernization initiative at an Associated Food Stores-owned distribution center in Utah. Through Symbotic’s end-to-end automation system with robotic case picking capabilities, the distribution center will bank on accurate and aisle-friendly pallet deliveries to stores.
“We are excited to provide AFS with the innovation, flexibility and reliability provided by Symbotic’s advanced A.I. and warehouse automation technology. We look forward to working with AFS for its next phase and continuing to support its retailers with a superior service experience,” Symbotic CEO, Rock Cohen said.
7. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 27
SAP SE (NYSE:SAP) is a multinational software company involved in enterprise applications and business AI. On March 6th, BofA Global Research reaffirmed its “Buy” rating on the company’s stock with a price objective of 307 euros, mainly due to the company’s growth potential backed by its cloud migration and artificial intelligence strategies.
Analysts noted that the company’s IT budgets are expected to increase by 4.9% in 2025 compared to 3.8% in 2024 as the company outlines its robust spending aspirations. The company’s RISE offering, which helps businesses transition to SAP Business Suite is slated to impact cloud migrations.
“We expect approximately 25% earnings growth coupled with stable multiples to drive further share price upside,” BofA said.
6. Applied Digital Corporation (NASDAQ:APLD)
Number of Hedge Fund Holders: 42
Applied Digital (NASDAQ:APLD) designs, develops and operates next-generation digital infrastructure across North America for high performance computing and artificial intelligence. On March 5, the company’s stock logged a day of strong gains with shares surging 11.1% at the close. The surge in stock price was a reaction to news about Microsoft and Meta Platform’s decision to push forward in agentic AI solutions. Both Microsoft and Meta are looking to increase their investment in agentic AI space which will increase demand in data center services, which as a consequence, resonates with Applied Digital Corporation (NASDAQ:APLD).
5. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 52
Aptiv PLC (NYSE:APTV) is an automotive technology supplier. On March 6th, TD Cowen initiated coverage on the company’s stock, giving it a “Buy” rating with a price target of $90. The rating is backed by the company’s accelerated growth driven by impressive bookings compared to its peers. The automotive technology company’s anticipated Electrical Distribution Systems spinoff could potentially serve as a catalyst for future growth.
Through the spinoff, the company’s financial structure is slated to be more aligned with multi-industrial companies which can have a strong bearing on its stock performance.
4. Axon Enterprise, Inc. (NASDAQ:AXON)
Number of Hedge Fund Holders: 64
Axon Enterprise, Inc. (NASDAQ:AXON) develops technology and weapons products for military, law enforcement and civilians. On March 5th, the company announced an offering of $1.5 billion in senior notes due 2030 and 2033, which will be utilized to support growth and investments in new products, services and technologies.
The company has set an ambitious target to decrease gun-related deaths between police and public to 50% by 2033 through its portfolio of Taser devices, body cameras, in-car cameras, cloud-based evidence management and real-time operations software.
This is backed by strong fourth quarter results, where it booked a 34% year-over-year increase in revenue with a non-GAAP EPS of $2.08, beating consensus estimates of $1.43. The Taser segment is thriving, with the company shipping more than 200,000 devices.
However, escalating costs and expenses could be an issue for the company with cost of sales surging 39% year over year in 2024. Increased operating expenses have impacted the company’s margins.
3. Autodesk Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 74
Autodesk Inc. (NASDAQ:ADSK) provides software products and services for architecture, engineering, construction, manufacturing, media, education, and entertainment industries. On March 4th, at the 18th Annual Emerging Technology Summit, the company announced a strategic shift towards integrating AI solutions and restructuring to improve operations. The company’s strategic shift is led by integrating AI capabilities across its portfolios by introducing features such as generative design and workflow optimization.
In its latest earnings report on March 6th, the company logged a total net revenue of $6.13 billion for the year, up 12% compared with the previous fiscal year. The company’s operating expenses increased by 9% to $4.20 billion, driven by higher employee-related costs and cloud hosting expenses.
2. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 105
Oracle Corporation (NYSE:ORCL) is a computer technology company that offers a comprehensive and fully integrated stack of cloud applications and cloud platform services. On March 7th, TD Cowen maintained a buy rating on the company, with a steady price target of $210.00 backed by the firm’s expectations of its new Stargate partnership which aims to invest around $500 billion over four years in AI infrastructure across the US. Oracle, along with OpenAI and Softbank, have identified locations in Texas for new data centers, while the company has also partnered with Google to enhance the Oracle Database@Google Cloud’s capabilities.
1. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 161
Broadcom Inc. (NASDAQ:AVGO) designs, develops, builds and supplies semiconductor and infrastructure software products. On March 7th, CFRA maintained a buy rating on the company as it maintains its long-term outlook on its relationship with three major hyperscalers. The company is also engaged with four customers that develop custom silicon chips, thus suggesting additional growth opportunities.
Shares of Broadcom surged after the company published its second quarter results on March 6, which exceeded Wall Street’s estimations. Wall Street had projected EPS of $1.51 with a revenue of $14.6 billion, and Broadcom logged an EPS of $1.60 on revenue of $14.92 billion. CEO Hock Tan said that the company is expecting “continued strength in AI semiconductor revenue,” which is projected to reach $4.4 billion in the second quarter. Robust AI sales also prompted KeyBanc Capital Markets to raise the company’s price target from $260 to $275 and maintain its Overweight rating, on March 7.
While we acknowledge the potential of AVGO 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 AVGO 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 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
