In this article, we discuss the 11 AI news and ratings you should not miss.
There has been a lot of buzz around AI startups in the past few years, with funding rounds fetching hundreds of millions of dollars and valuations climbing to record highs. For example, OpenAI, of ChatGPT-fame, has become the most valuable private company in the world with a value of over $150 billion in the past few weeks. No other tech startup in the history of the United States has ever been this valuable before a public offering. This valuation is a reflection of the boundless potential of AI. Latest reports, published by news agency Reuters, reveal that the startup is presently involved in talks with authorities in California, where it is based, over a change in business structure that will allow it to become a for-profit business.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
In 2015, OpenAI was founded as a non-profit AI research lab. The shift towards the for-profit tag is likely to make the company even more attractive to investors. OpenAI has many big tech names among investors, including giants like Microsoft. Reports suggest that since the first billion it invested in the startup back in 2019, the tech giant has invested another $12 billion in the AI firm, bringing total investments in the startup to around $13 billion. The extensive capital spending has led to concerns about threats to fat margins at the company and added pressure on profitability. Market intelligence firm Visible Alpha estimates that the tech giant’s capital spending for a single quarter now is more than its annual expenditure used to be until fiscal 2020.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among 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).
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11. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers. On November 5, the company posted earnings for the second quarter, reporting earnings per share of $0.30, beating market estimates by $0.04. The revenue over the period was $844 million, up close to 5% compared to the revenue over the same period last year and beating analyst expectations by $34 million. During the second quarter, Arm said that royalty revenue rose 23% year-over-year to $514 million, due largely to Armv9, while license and other revenue fell 15% year-over-year to $330 million.
10. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) is an American company that specializes in software platforms for big data analytics. The firm recently posted earnings for the third fiscal quarter, with total revenue coming in at $725 million, up 30% year-over-year and 7% quarter-over-quarter, and well-above the $705 million Street estimate. US commercial business rose 54% year-over-year, versus Street estimates of 47%, with accelerating demand for AIP steering new customer conversions and existing deal expansions. Analysts at Wedbush and Morgan Stanley issued bullish investors notes on the software firm following the results.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 100
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. On November 5, the firm posted earnings for the fourth fiscal quarter, reporting earnings per share of $2.69, beating market estimates by $0.12. The revenue over the period was $10.2 billion, up more than 18% compared to the revenue over the same period last year and beating analyst expectations by $310 million. The firm also issued guidance numbers for the first quarter of next year, saying it expected revenue of $10.5 billion-$11.3 billion, versus $10.61 billion consensus, and Non-GAAP diluted EPS of $2.85-$3.05, versus $2.87 consensus.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. Even amid mounting US sanctions and the imminent arrival of Donald Trump, generally viewed as tough on China, at the White House, chip firms like AMD are presenting their latest products at a major trade fair in Shanghai. On November 5, AMD joined more than 400 such tech firms at the Intelligent Industry & Information Technology exhibition to showcase various AI infrastructure products and solutions. AMD senior vice-president Spencer Pan said on the occasion that through expanded cooperation with Chinese partners, the chipmaker was accelerating digital transformation and industrial upgrade on mainland China.
7. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. On November 5, reports published by news platform Bloomberg suggested that the company had finished talks with peer GlobalFoundries over binding agreements for billions of dollars in grants and loans to support US factories. The agreements come as the administration of US President Joe Biden tries to accelerate Chips and Science grants to companies before the end of term in January. The package for TSM, announced back in April, includes $6.6 billion in grants and as much as $5 billion in loans to support the construction of three semiconductor factories in Phoenix.
6. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 165
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. On November 5, reports published by news publication BNN Bloomberg indicated that a smaller AI hub being built by Alphabet in partnership with a wealth fund in Saudi Arabia is likely to serve as the starting point of a much larger AI hub worth almost $100 billion that the Middle Eastern nation is planning to build to rival the AI investments of neighboring United Arab Emirates. Per initial reports, in the initial project, Alphabet and the Saudi fund are planning to invest between $5 billion and $10 billion, which will include work on creating Arabic language AI models.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On November 5, the company announced an array of new AI and simulation tools aimed at accelerating the development of humanoid robots. The announcements were made at the Conference for Robot Learning held in Germany. The firm also debuted Project GR00T, an initiative designed to accelerate the development of humanoid robots. This project offers six new workflows that provide comprehensive blueprints for overcoming the challenges associated with humanoid robot capabilities, such as motion generation and whole-body control.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. Investment advisory Bernstein on November 5 released an investor note in which it warned that Apple and other US-based hardware manufacturers could face earnings impacts if Donald Trump, who recently won the US Presidential election, decides to go ahead with a plan to impose high tariffs on goods coming into the US from China. Some analysts believe that goods from China might be taxed as high as 60% and the move could be forced through without Congressional approval. Bernstein analyst Toni Sacconaghi noted that should Apple absorb the tariffs without increasing prices, the effect on gross profits might be an estimated 13%, lowering earnings per share by $1.44, or 19%. Should volumes remain steady, the impact on gross profits may be assessed at 13%. Sacconaghi cautioned that if China or another country levies retaliatory tariffs on American companies, the consequences could be more severe.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family. The company was on November 5 named among a basket of equities that investment advisory Wells Fargo believes have above-average growth potential. This Growth List, published by analysts at the advisory, was benchmarked against the Russell Midcap Growth Index. The companies included in the list all have a market value of at least $1.5 billion and annual revenue of at least $500 million. They also have the ability to generate at least a 5% compound annual growth rate in forward EPS over a multi-year period. For Meta, the advisory expects 20% EPS growth for the long term.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. The company on November 5 started rolling out AI-powered features for several Windows applications, including the more than four decade old Notepad application. The new updates are similar to features offered by the Copilot AI assistant. For example, after highlighting text in Notepad, users are given the additional option of changing it with the help of AI. These changes include, but are not limited to changing the size of the text, making it longer, adjusting the tone, or the format. Three different versions of the same text are generated using the Rewrite feature on the Notepad application.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. On November 6, Anthropic, an AI startup backed by tech giant Amazon, announced that it would make the Claude AI model it had developed available to defense agencies in the US through partnerships with Amazon Web Services and Palantir. Anthropic had already integrated Claude into the AWS and Palantir systems earlier this year. Kate Earle Jensen, a senior executive at Anthropic, has said that the company’s collaboration with Palantir and AWS will operationalize the use of Claude.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) 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 timeframe. If you are looking for an AI stock that is more promising than Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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