In this article, we discuss the 9 trending AI stocks on the latest news and ratings.
AI’s Appetite for Resources and the Price of Progress
A Bloomberg report from December 13, AI Wants More Data. More Chips. More Real Estate. More Power. More Water. More Everything, explores the resource-intensive nature of artificial intelligence, emphasizing its demands on electricity, water, and infrastructure. ChatGPT and similar AI systems require vast amounts of power, far exceeding traditional services like Google Search. AI models require enormous energy, materials, and specialized hardware like GPUs. This is driving a global race for resources, with companies seeking efficient solutions, including nuclear power and synthetic data generation, the report states.
The infrastructure required to support AI, from data centers to power grids, faces significant challenges, with rising demands for energy and materials like copper, silicon, and rare metals. While AI presents a tremendous opportunity, the article highlights potential environmental impacts, talent shortages, and increasing infrastructure costs. As AI companies compete to meet the growing needs of generative AI, the global ecosystem is reshaping.
READ ALSO: 10 Companies Hoarding Bitcoin Like There’s No Tomorrow and 10 Important AI Announcements for Investors.
The Future of AI and Energy in the U.S.
Byron Deeter, partner at Bessemer Venture recently joined CNBC’s ‘Closing Bell Overtime’ and discussed the continued strong investor interest in AI, with the U.S. government’s backing further supporting the country’s leadership in the sector. He highlighted the role of energy in AI development, noting the need for nuclear energy in the U.S. due to the growing demand for computing power. Deeter also talked about Service Titan, a company providing software for industries like plumbing and HVAC, which recently went public. He sees the IPO as a sign of more companies following suit in 2025, with a strong pipeline of potential filings for the coming year.
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).
9. Aehr Test Systems, Inc. (NASDAQ:AEHR)
Number of Hedge Fund Holders: 12
Aehr Test Systems, Inc. (NASDAQ:AEHR) offers semiconductor test solutions that support AI-related devices. Its tools enable wafer-level testing, burn-in, and stabilization, catering to integrated circuit manufacturers worldwide.
On December 16, Aehr (NASDAQ:AEHR) announced that it received its first AI customer order for multiple high-power FOX-XP wafer level test and burn-in systems, valued at over $10 million. The order includes proprietary WaferPak Contactors and marks a significant milestone for the company. The systems will ship within 90 days, with the first system set to ship immediately. This breakthrough expands Aehr’s market opportunities for testing AI processors, offering cost efficiency, improved yields, and better scalability in semiconductor manufacturing. Aehr is now the only company offering both wafer-level and package-level test and burn-in solutions for AI processors. Gayn Erickson, President and CEO of Aehr Test Systems remarked:
“With this solution, we are now able to offer our customers the ability to do production wafer level burn-in of their AI processors and accelerators in addition to our offering of both reliability qualification and production burn-in at package part with our Sonoma ultra-high-power test and burn-in system that we are now shipping in volume to many manufacturers around the world. Aehr Test Systems is the only company in the world that can now offer both wafer level and package level turnkey test and burn-in solutions for these AI processors.”
8. DigitalOcean Holdings, Inc. (NYSE:DOCN)
Number of Hedge Fund Holders: 22
DigitalOcean Holdings, Inc. (NYSE:DOCN) offers cloud computing solutions that support AI and machine learning applications, providing GPU-powered virtual machines, interactive development environments, and deployment tools for scaling and managing AI models.
Stifel increased its price target for DigitalOcean to $40 from $35, keeping a Hold rating on the stock. The firm highlighted that after a slow start to 2024, the year is ending on a positive note due to stabilizing growth rates, signs of AI monetization among large software companies, lower interest rates, and solid economic growth. While the firm expects management to take a more cautious approach to Q1 guidance, it anticipates that overall top-line growth will at least match the latter half of 2024, driven by these favorable conditions.
