CNBC’s Deidre Bosa joined ‘Money Movers’ to discuss the potential impact of a second Trump administration on the artificial intelligence trade. Bosa notes that artificial intelligence could be “less regulated” and “more volatile” under Trump’s leadership. However, the president-elect’s AI policy could be a boon to the industry itself, albeit at the expense of necessary guardrails for AI. Back in June, Republicans adopted a new party platform containing a provision related to scrapping Biden’s executive orders on AI.
READ ALSO: 10 AI News You Shouldn’t Miss and 15 Trending AI Stocks on Latest Analyst Ratings and News
Biden’s executive orders sought to tackle new technology threats by requiring developers of powerful AI systems to share their safety test results with the US government and also called on federal agencies to develop guidelines for the responsible use of AI domains. On the other hand, Trump’s allies have been proposing a different executive order that would launch a series of “Manhattan Projects” for developing military technology and immediately review “unnecessary and burdensome regulations” to “Make America Great in AI”.
Trump, however, seems to be only one of the few who thinks imposing guardrails on artificial intelligence could prove detrimental to the US. A poll shared with Time reveals that Americans across the political spectrum are skeptical about the idea that the U.S. should avoid regulating AI to outcompete China. According to a poll by the AI Policy Institute (AIPI), 75% of Democrats and 75% of Republicans believe that “taking a careful controlled approach” to AI is preferable as opposed to “moving forward on AI as fast as possible to be the first country to get extremely powerful AI.”
The Latest Developments in AI
Amid the ongoing debate, recent developments in AI are rapidly shaping the landscape in the backdrop. For instance, Perplexity AI, an AI-powered search engine, is said to be raising new investment that would value the search startup to a staggering $9 billion. The new funding round is set to raise $500 million led by venture capital firm Institutional Venture Partners (IVP), which also holds a board seat in the startup.
In other news, OpenAI, an AI research lab and company, has acquired Chat.com, further adding to its collection of high-profile domain names. An OpenAI spokesperson confirmed the acquisition via email. While such AI-related news is often striking, AI capabilities continue to surprise even the most seasoned experts. In fact, AI can now even help you become a better parent. On Thursday, Andreessen Horowitz’s partner Justine Moore took to X to share an investment idea, advocating for “a new wave of ‘parenting co-pilots’ powered by LLMs and agents. She highlighted companies such as Cradlewise, creators of an AI-driven baby monitor that tracks sleep patterns and rocks the crib, and Nanit, which utilizes AI to analyze crib footage and monitor a baby’s breathing.
“Imagine an AI parenting companion that’s always in your corner – ready to answer questions or talk about how you’re feeling at any time of the day (or night)”.
– Andreessen Horowitz partner Justine Moore
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.
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A pathologist and a laboratory assistant in a laboratory researching medical news and data.
12. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 18
Lumen Technologies, Inc. (NYSE:LUMN) is a facilities-based technology and communications company connecting people, data, and applications. Its AI-driven fiber deals and other digital services have been helping it capitalize on AI growth.
Lumen Technologies, Inc. (NYSE:LUMN) has raised its annual free cash flow forecast this week owing to artificial intelligence deals with large cloud companies, Reuters reported on November 6. The company has secured deals from cloud and tech companies that are worth more than $8 billion. Benefiting from these AI deals, it’s capitalizing on Big Tech’s race towards expanding data centers needed for powerful apps such as ChatGPT.
“AI needs data centers and data centers need to be connected and that’s what we do”.
-Stansbury told Reuters in an interview.
11. Wolfspeed, Inc. (NYSE:WOLF)
Number of Hedge Fund Holders: 29
Wolfspeed, Inc. (NYSE:WOLF) is a next-generation semiconductor technology company. This EV and AI chipmaker develops and manufactures semiconductors for AI data centers, electric vehicles, and more.
On November 7, Canaccord lowered its price target on Wolfspeed, Inc. (NYSE:WOLF) to $18 from $25 and kept a “Buy” rating on the shares. Wolfspeed, Inc. (NYSE:WOLF) reported its first quarter fiscal year results on November 6th, posting weaker-than-expected sales and guidance, as well as job cuts as it moves to simplify its business. The company posted revenue of $194.7 million for the quarter ended September 29, missing analyst estimates of $200.36 million. For the current quarter, it expects revenue between $160 million and $200 million, well below Wall Street’s consensus estimate of $214.6 million. Slowing sales of electric vehicles have impacted the demand for chips made by Wolfspeed, Inc. (NYSE:WOLF). According to Canaccord, Wolfspeed’s core fundamentals have taken a turn for the worse, whereas materials division problems and electric vehicles project delays have also led to weaker guidance for the December quarter.
10. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 31
SAP SE (NYSE:SAP) is a German multinational software company offering enterprise application software and related services. It is the market leader in ERP software. This European AI stock leverages AI to enhance its enterprise resource planning (ERP) solutions.
On November 7, SAP SE (NYSE:SAP) announced in a press release that it took the opportunity of its recently held annual event, SuccessConnect, to reveal 30 new AI features within its SuccessFactors HCM suite. These new AI-based innovations will help in tasks such as helping make AI-assisted 360-degree reviews, leveraging AI assistant Joule to guide new hires through onboarding, and even pushing employees to complete tasks.
“Our mission is to make every employee a success story. We’re really at a special point in the arc of technology. This is why I truly believe the next two years of HR tech, the way we can impact the workforce, is going to be more interesting than the prior two decades….The world is moving very quickly. The world is not standing still. And as a trusted partner, SAP SuccessFactors can help you stay ahead in that always-changing world”.
– Dan Beck, president and chief product officer for SAP SuccessFactors.
9. Coherent Corp. (NYSE:COHR)
Number of Hedge Fund Holders: 47
Coherent Corp. (NYSE:COHR) is an American manufacturer of engineered materials and optoelectronic components. The stock has gained popularity due to its potential for growth driven by artificial intelligence (AI) initiatives. In particular, its datacom transceivers have been valuable for data-center connectivity.
On November 7, Craig-Hallum raised the firm’s price target on Coherent Corp. (NYSE:COHR) to $120 from $85 and kept a “Buy” rating on the shares. Coherent Corp. (NYSE:COHR) reported impressive Q1 fiscal 2025 results with revenue of $1.35 billion- a 28% year-over-year increase-fueled by strong AI-related datacom transceiver growth. According to the firm, Coherent Corp. (NYSE:COHR)’s robust AI-driven quarter hasn’t been surprising. However, an increase in gross margin wasn’t anticipated and will likely appeal to investors as a positive sign.
“We delivered solid growth in the September quarter on both a sequential and year-over-year basis, driven primarily by our AI-related Datacom transceivers. We also drove higher gross margin and operating margin. I continue to be excited by the opportunity to unlock significant long-term shareholder value.”
-Jim Anderson, CEO, Coherent Corp. (NYSE:COHR)
8. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 52
NXP Semiconductors N.V. (NASDAQ:NXPI) is a Dutch company that designs semiconductors and software for mobile communications, consumer electronics, security applications, in-car entertainment, and networking. The company plays a key role in AI through its automotive chips, microcontrollers, and machine-learning platforms that enable autonomous vehicle systems, edge computing, and more.
On November 6, Truist analyst William Stein lowered his price target on NXP Semiconductors N.V. (NASDAQ:NXPI) to $252 from $287 and kept a “Buy” rating on the shares. The analyst wrote in a research note that NXP’s third-quarter results met expectations, but it’s the fourth-quarter forecast that is slightly lower than what experts had predicted. NXP isn’t the only one guiding lower than expectations, as most semi/component companies are facing challenges. The firm further added that the company’s sales and margins should benefit from new products and manufacturing capacity when cyclical demand recovers.
7. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 54
International Business Machines Corporation (NYSE:IBM) is an American global technology company offering integrated solutions and services worldwide. The company is a leading provider of global hybrid cloud and AI, and consulting expertise.
On November 6th, International Business Machines Corporation (NYSE:IBM) announced that it has teamed up with Cognizant to help enterprises with their modernization efforts and innovate with enterprise-scale AI. Known as the FinOps Center of Excellence (COE), the global innovation center is built upon IBM’s leading FinOps software and Cognizant’s cloud and developer platforms. The COE will help global clients deal with challenges such as escalating costs, AI preparedness, cloud governance, and architecture modernization.
“Optimizing cloud, AI, and mainframe solutions are priorities for C-suite leaders the world over. Exploiting automation and AI to reduce manual operations and accelerate productivity will help clients to realize more value from their hybrid cloud environments, reduce technology costs and the barriers to innovation.”
– Stephen Smith, General Manager, IBM Service Partner Ecosystem.
6. Arista Networks, Inc. (NYSE:ANET)
Number of Hedge Fund Holders: 65
Arista Networks, Inc. (NYSE:ANET) is an American computer networking company that provides cloud networking solutions for data centers and computer environments. The company’s products are especially significant for hyperscalers who are ramping up their data center infrastructure to scale their cloud computing capabilities.
On November 7, Arista Networks, Inc. (NYSE:ANET) released its forecast for fourth-quarter revenue and said it expects sales to surpass Wall Street estimates due to the surge in demand for its networking equipment driven by the AI boom. The company forecasts revenue between $1.85 billion and $1.90 billion for the current quarter, while analysts’ average estimate is $1.81 billion. Companies have been fueling investments in AI technologies that require heavy computing power, driving higher demand for data centers. This demand is in turn boosting the need for Arista’s Ethernet switches and routers. Arista also highlighted that it is gaining from enterprise customers upgrading their networking systems to quickly scale up data center capacity.
5. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 69
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cybersecurity technology company that provides cloud-delivered protection of endpoints, cloud workloads, identity, and data. The company uses artificial intelligence to automate and improve cyber protection, learning from more than 2 trillion incidents every day to enhance accuracy.
On November 7, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) announced the launch of CrowdStrike AI Red Team Services at Fal.Con Europe, CrowdStrike’s inaugural premier user conference in the region. The Crowdstrike AI Red Team Services is a set of specialized services that will help detect and fix vulnerabilities in artificial intelligence systems, like Large Language Models (LLMs), allowing companies to develop AI with confidence.
“AI is revolutionizing industries, while also opening new doors for cyberattacks. CrowdStrike leads the way in protecting organizations as they embrace emerging technologies and drive innovation. Our new AI Red Team Services identify and help to neutralize potential attack vectors before adversaries can strike, ensuring AI systems remain secure and resilient against sophisticated attacks”.
– Tom Etheridge, chief global services officer, CrowdStrike.
4. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Constellation Energy Corporation (NASDAQ:CEG) is an American energy company that generates and sells electricity in the United States. This AI power play also supplies the energy needed to power data centers and AI infrastructure.
On November 7, DBS analyst Elizabelle Pang maintained a “Hold” rating on Constellation Energy Corporation (NASDAQ:CEG) and set a price target of $250.00. Pang’s rating comes from a combination of factors, but the most prominent development is that the company has recently secured a 20-year power purchase agreement with Microsoft, expected to boost the company’s EPS at an average yearly growth rate of 13% from 2024 to 2030. The deal will help them restart the Three Mile Island Unit 1 as the Clean Energy Center, expected to be in operation by 2028. Despite such positive developments, the firm notes how Constellation is already at a rich valuation, implying limited upside potential for its shares. Therefore, investors should wait for a better time to invest.
3. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 79
Datadog, Inc. (NASDAQ:DDOG) offers a cloud-based monitoring and analytics program. The enterprise software leader is a player in artificial intelligence offering expertise in cloud computing as well as AI-powered cybersecurity products.
On November 7, Reuters reported that Datadog, Inc. (NASDAQ:DDOG) has raised its annual revenue and profit forecasts on the back of accelerating demand for its artificial intelligence-driven cybersecurity products. A large number of Datadog customers are deploying their AI apps in live production, boosting the usage of its products. Moreover, more businesses are expected to move to Cloud, a good sign for companies such as Datadog, since the AI applications run on it. The company raised its full-year revenue forecast to about $2.66 billion, compared to its earlier expectation of between $2.62 billion and $2.63 billion. Meanwhile, analysts were expecting revenue of $2.63 billion. Furthermore, it sees adjusted profit between $1.75 and $1.77 per share for the full year, compared to $1.62 to $1.66 per share previously.
“Datadog reported very strong results and guided for further impressive growth, some of it driven by AI applications. Shares are up significantly over the last few weeks as investors had very high expectations, which may be leading to some volatility in trading today”.
-Gil Luria, analyst, D.A. Davidson & Co.
2. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 88
Dell Technologies Inc. (NYSE:DELL) is one of the world’s leading technology companies that designs, develops, manufactures, markets, sells, and supports a wide range of comprehensive and integrated solutions, products, and services. The robust demand for Dell Technologies Inc. (NYSE:DELL) artificial-intelligence powered servers has allowed it to capitalize on the flourishing demand for AI infrastructure.
On Thursday, November 7, the South China Morning Post reported that Dell Technologies Inc. (NYSE:DELL) has set up an artificial intelligence (AI) center in Shenzhen, known to be China’s southern tech hub. The move marks a fresh sign of Dell’s commitment to the Chinese market. Opened on Monday, Dell Technologies Inc. (NYSE:DELL)’s AI Smart Solutions Center strives to help businesses adopt AI smoothly. It plans on enhancing their tech infrastructure with PowerEdge servers, PowerSwitch network switches, and PowerScale storage systems. Moreover, Dell is also keen on developing applications for AI PCs, the company said in a statement.
“As the AI wave approaches … clients need a scalable infrastructure to meet the growing need for computing power and the challenge of data management, while achieving green and energy-efficient results”.
-Wu Dongmei, senior global vice-president at Dell and president of the Greater China Region.
1. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 92
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. The stock is driven by the huge power demand from AI data centers.
Donald Trump’s focus on fossil fuels and less attention on renewables has the potential to disrupt the energy space. On November 7, CNBC posted post-election notes from firms such as Jefferies and JPMorgan to discuss the stocks that are most likely to emerge as winners or losers. As per JP Morgan and Jefferies, gas stocks exposed to natural gas are likely to emerge as the biggest winners.
“Under a more carbon-agnostic agenda, we would […] expect the Trump administration to be more supportive of gas generation,” JPMorgan analyst Kevin Kwan told clients in a Wednesday note.
In particular, Vistra Corp. (NYSE:VST) has been soaring to the top of S&P, driven by hopes of securing a deal to power data centers using one of its nuclear plants. According to JP Morgan, the company has “significant assets”, and is likely to benefit from the fossil-fuel-friendly Trump administration.
While we acknowledge the potential of VST 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 VST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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