As the global AI race heated up last month with the launch of DeepSeek R1 and Alibaba’s Qwen 2.5 AI models, US AI firms are working to enhance existing models at a record pace. As a result, OpenAI announced yesterday that it has added a new “deep research” mode to ChatGPT for users to carry out multi-step research on the web for complex tasks.
Deep Research is OpenAI’s second AI agent powered by the latest o3 reasoning model, which is optimized for web browsing and data analysis. The new feature can search, interpret, and analyze vast amounts of texts on the web to create a detailed report close to the level of a research analyst.
However, queries made using the “Deep Research” feature will take up to 30 minutes to return results. The chatbot will automatically notify users when the research is complete.
Furthermore, Nvidia CEO Jensen Huang said in a January 27th interview with journalist Cleo Abram that everyone carry an AI tutor with them for learning diverse topics and assistance with coding, writing, analysis, and reasoning.
“If there’s one thing I would encourage everybody to do, is to go get yourself an AI tutor right away,” he said. “The knowledge of almost any particular field, the barriers to that understanding, have been reduced. I have a personal tutor with me all of the time.”
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).
A professional financial analyst studying data on a computer, illustrating the company’s index investment decisions.
10. zSpace Inc. (NASDAQ:ZSPC)
Number of Hedge Fund Holders: N/A
zSpace Inc. (NASDAQ:ZSPC) offers augmented reality and virtual reality products for education to help learners interact with virtual objects in simulated environments. The company launched the zSpace AI tool to provide personalized assistance to teachers and students and a trove of curated content for students powered by data-driven insights for a better learning experience. Furthermore, the Career Coach AI is the company’s AI-driven assistant for students, helping them learn about various career paths and make well-informed decisions for their educational journey.
On February 3rd, Roth MKM analyst Rohit Kulkarni initiated coverage of zSpace Inc. (NASDAQ:ZSPC) with a “Buy” rating and a $20 stock price target. The brokerage highlighted that the company stock has jumped over 300% since the IPO and is valued at a premium versus peers, but “presents a significant opportunity for medium/long-term investors” due to a growing total addressable market and “significant catalysts” like the recently launched laptop.
9. BlackSky Technology Inc. (NYSE:BKSY)
Number of Hedge Fund Holders: 7
BlackSky Technology Inc. (NYSE:BKSY) claims to offer the most advanced space-based intelligence platform, offering services like real-time satellite imagery, analytics, and high-frequency monitoring of economic assets, critical locations, and global events for government and commercial clients. The company uses AI-enabled systems for object detection, geospatial data processing automation, and extracting actionable intelligence at machine speed.
On February 3rd, H.C. Wainwright increased BlackSky Technology Inc.’s (NYSE:BKSY) target price target to $20 from $12 while retaining a “Buy” rating on the stock. The brokerage said that as the company continues to execute against its current strategy, the path to cash generation becomes clearer, which could attract new investors. Analysts added that the shared outperformance was driven by multiple large, new contract announcements last month.
8. STMicroelectronics NV (NYSE:STM)
Number of Hedge Fund Holders: 18
STMicroelectronics NV (NYSE:STM) is a semiconductor firm that builds communication equipment, computer accessories, microprocessors, and microcontrollers for use in IoT, consumer electronics, and the automotive and industrial industries. Its ST Edge AI suite facilitates using AI on microchips and smart sensors. The company’s proprietary neural processing unit, ST Neural-ART Accelerator, ensures high efficiency in handling AI tasks. Meanwhile, its online STM32 edge AI tool helps developers create and deploy ML algorithms on microcontrollers at reduced costs.
On February 3rd, Baird trimmed STMicroelectronics NV’s (NYSE:STM) target price to $23 from $30 and maintained a “Neutral” rating on the stock. The brokerage highlighted that the downcycle is unfolding, and inventory levels continue to remain high.
7. Samsara Inc. (NYSE:IOT)
Number of Hedge Fund Holders: 30
Samsara Inc. (NYSE:IOT) is an Internet of Things (IoT) specialist offering cloud-based software and sensor hardware solutions, including products like AI dash cams, telematics, maintenance, routing, and driver apps to oversee and optimize industrial operations, including vehicle fleet management for better safety and efficiency through data analysis. The Samsara Gen AI assistant and Intelligent Experiences on their “Connected Operations Cloud” platform help customers address complex operation questions and improve business operations with AI-driven recommendations and insights.
On February 3rd, Berenberg analyst Nay Soe Naing initiated coverage of Samsara Inc. (NYSE:IOT) with a “Hold” rating and a $57 stock price target. The analyst noted that the fast-growing company is effectively bringing “Industry 4.0” to the commercial-vehicle-based and adjacent industries. However, the brokerage is “less enthusiastic about its equity story” and thinks it currently lacks meaningful positive catalysts.
6. Booz Allen Hamilton Holding Corporation (NYSE:BAH)
Number of Hedge Fund Holders: 32
Booz Allen Hamilton Holding Corporation (NYSE:BAH) offers technology consulting, analysis, and engineering services around AI, cybersecurity, cloud computing, mission operations, and digital transformation to government agencies and commercial clients, with an emphasis on national security applications. The company offers end-to-end AI services, including AI training solutions, DataOps for AI, engineering AI solutions, and AI-powered product development and tech scouting products to help government clients implement agency-specific strategy and securely integrate capabilities into enterprise operations.
On February 3rd, Raymond James upgraded Booz Allen Hamilton Holding Corporation (NYSE:BAH) to “Outperform” from “Market Perform” with a $150 price target per share. The brokerage views the “substantive” year-over-year backlog increase, $1 billion share buyback, and 30% post-election selloff as tilting the company’s risk/reward favorably. Analysts stated that the company’s fundamentals remain strong while the Department of Government Efficiency has “dented” its trading multiple, mitigating future multiple compression risks “substantively,” while the budget overhang has Street expectations baking in “ample cushion for DOGE disruption and a conservative guide.”
5. Varonis Systems Inc. (NASDAQ:VRNS)
Number of Hedge Fund Holders: 42
Varonis Systems Inc. (NASDAQ:VRNS) offers cybersecurity solutions through its software platform, which automates the management and safeguarding of unstructured data with patented AI and ML technologies. The AI software showcases user behavior analytics and forensic analysis capabilities via platforms like data advantage, data privilege, and the data classification engine for automated threat identification and remediation. Varonis Systems Inc. (NASDAQ:VRNS) primarily focuses on protecting enterprise data, financial records, intellectual property, and confidential information of individuals.
On February 3rd, JPMorgan reduced the price target on Varonis Systems Inc. (NASDAQ:VRNS) to $55 from $65 but maintained an “Overweight” stock rating as part of the Q4 preview. The brokerage doesn’t expect meaningful copilot and agentic contribution this quarter but anticipates “solid results nonetheless with multiple tailwinds.” Analysts noted that new business traction and installed base conversion over reasonable estimates could improve fundamental upside.
4. Teradyne Inc (NASDAQ:TER)
Number of Hedge Fund Holders: 43
Teradyne Inc. (NASDAQ:TER) designs and manufactures robotics and automated test systems to offer test solutions for semiconductors, electronic systems, and wireless devices. Their offerings, including collaborative robots and analytics tools, enable manufacturers to ensure high product quality and swiftly introduce solutions to markets across industries like healthcare, automotive, and consumer electronics. The company is matching the growing requirement of next-gen AI devices by facilitating the faster roll out of AI chips and components through its Advanced Test Solution capabilities that aid in yield optimization and enhancement of silicon performance.
On February 3rd, Baird reduced Teradyne Inc.’s (NASDAQ:TER) stock price target to $140 from $150 but retained an “Outperform” rating. The brokerage’s decision to lower the stock price target after mixed Q4 results pointed to weakness in the robotics segment.
3. Wix.Com Ltd. (NASDAQ:WIX)
Number of Hedge Fund Holders: 46
Wix.com Ltd. (NASDAQ:WIX) is a free HTML5 website builder for desktop and mobile platforms, known for its popular no-code, drag-and-drop editing features. The cloud-based web development services platform also comes with built-in business tools for eCommerce, marketing, and branding to help users grow their online presence effectively. The company integrated a GenAI model into the platform to create AI images, teaser videos, and text as well as swiftly develop CMS collections with the option to add an AI site assistant for customer query resolution.
On February 3rd, Wells Fargo initiated coverage of Wix.com Ltd. (NASDAQ:WIX) with an “Underweight” rating and a $208 price target. The brokerage views price hikes as a meaningful contributor to the company’s acceleration in creative subscription bookings. As a result, Wells Fargo sees risk to consensus estimates as the contribution from price wanes. Analysts noted that the company’s fundamentals are improving “to some extent,” but the pace of improvement will slow down as it laps price increases in 2025.
2. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 52
Aptiv PLC (NYSE:APTV) is an automotive part company that utilizes AI to improve vehicle safety. The company has integrated AI in its advanced drive-assistance system (ADAS), vehicle connectivity offerings, and sensing and perception products to elevate operating performance. Aptiv PLC (NYSE:APTV) also uses AI to improve interior products and supply chain visibility for company-wide transparency and to devise sustainable business strategies.
On February 3rd, Raymond James downgraded Aptiv PLC (NYSE:APTV) to “Market Perform” from “Outperform” without a price target. The brokerage lowered estimates below the consensus in accordance with the auto industry’s challenges and considering the tariff impacts on the company. Analysts noted that although Aptiv PLC (NYSE:APTV) shares have underperformed broader markets since peaking in early 2022, the stock remained resilient, and estimates were stable since the election, “which seems unlikely to hold over the next few quarters.” The brokerage believes the stock is range-bound in the near term, pending the consummation of the Electrical Distribution Systems business spin in late 2025.
1. Boston Scientific Corporation (NYSE:BSX)
Number of Hedge Fund Holders: 92
Boston Scientific Corporation (NYSE:BSX) designs, manufactures and sells a diverse portfolio of medical devices for interventional medical specialties, including cardiology, neurology, and urology, among other fields. Apart from spearheading its ACURATE Prime aortic valve systems and treatment technology globally, the company also uses AI in the AVVIGO+ systems to assist in interpreting intravascular ultrasound (IVUS) images for advanced vessel imaging and AI-powered lesion assessment as part of efforts to expand its imaging and diagnostics business.
On February 3rd, TD Cowen increased Boston Scientific Corporation’s (NYSE:BSX) target price to $115 from $110 and reiterated a “Buy” rating on the stock. The brokerage anticipates another quarterly outperformance when the company releases its Q4 results and issues its 2025 guidance. Analysts think the Street projections of $4.42 billion is conservative.
While we acknowledge the potential of Boston Scientific Corporation (NYSE:BSX) 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 BSX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
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.
