Mark Mahaney, Senior Managing Director at Evercore ISI, discussed how AI is reshaping the tech industry with Bloomberg’s Alix Steel and Paul Sweeney at the Bloomberg Invest conference in New York City. Amid a market downturn, with the Nasdaq 100 now trading below its 200-day moving average, Mahaney cited two reasons for the tech part of the sell-off.
First, he said the tech sector has witnessed phenomenal outperformance in the last two and a half years. Therefore, a mean reversion scenario implies that stocks that have significantly outperformed will eventually face downward adjustments. The second reason that he quoted is the tariff issues upending businesses, depending on how well-hedged they are.
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“Equity valuations have been very elevated and there’s been yellow flags all over the horizon given moves to cut government spending. Now on top of that, we have all this rhetoric around tariffs.”
-Ben McMillan, chief investment officer at IDX Insights in Tampa, Florida.
It’s not only the tech stocks that are going to be affected by the tariffs issue. According to McMillan, Wall Street is really concerned. “The likelihood of tariffs will lead to higher prices and therefore lower spending.”
“The fear here is that it’s going to slow (economic) growth. And when you have a slowdown in economic conditions, it’s a situation where banks specifically make less money because fewer goods and services are traveling through the economy.”
-Adam Sarhan, CEO of 50 Park Investments in New York.
Market volatility and tariff concerns may be shaping the tech sector, but another key factor has been influencing investor sentiment. When asked about a misconception in the AI world, Mahaney pointed to DeepSeek, stating that there was a misapprehension that the innovation would be highly disruptive for the hyperscalers.
He believes that the opposite has happened and that infrastructure has become a lot cheaper, with investors likely to get the money they have spent on capital expenditure, as well as a better return.
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. The hedge fund data is as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An array of news articles and video clips with the company logo.
12. Blaize Holdings, Inc. (NASDAQ:BZAI)
Blaize Holdings, Inc. (NASDAQ:BZAI) provides purpose-built, artificial intelligence (“AI”)-enabled edge computing solutions. On March 4th, the company announced that it has entered into a joint technology agreement with the South Korea-based KAIST Institute for NanoCentury (“KINC”) of the Korea Advanced Institute of Science and Technology (“KAIST”). The university and business research and development collaboration aims to co-develop prototypes and technology solutions as well as produce new edge AI computing applications. The two organizations also plan to exchange personnel with each other to trade information, provide education, engage in joint research, as well as hold joint workshops and conferences to broaden comprehension of the applications of AI-based chips and edge computing.
“KAIST is at the cutting edge in scientific and engineering discovery, producing groundbreaking research in fields such as robotics, artificial intelligence and nanotechnology. Blaize is excited to partner with KAIST to develop the next generation of edge AI computing technologies.”
-Dinakar Munagala, chief executive officer of Blaize.
11. Freight Technologies, Inc. (NASDAQ:FRGT)
Freight Technologies, Inc. (NASDAQ:FRGT) is a logistics management innovation and technology company that provides a vast portfolio of technology-driven solutions. On March 4th, the company announced the launch of its advanced AI Tendering Bot, an innovative solution aimed at automating and streamlining the load tendering process for shippers and freight brokers. This innovation marks a strategic shift to a Software-as-a-Service (SaaS) model, enabling the company to achieve operational improvements and efficiencies through new technology.
The AI Tendering Bot identifies key load information, posts structured load data into the Fr8app marketplace, and then automates the transcription and organization of load requests, thereby reducing manual intervention. It has been fully integrated also with Fleet Rocket, Fr8Tech’s cutting-edge Transport Management Systems (TMS) solution for brokers, achieving enhanced efficiency, cost reductions, improved accuracy, and real-time visibility.
“Our new AI Tendering Bot represents a significant milestone in Fr8Tech’s digital transformation journey. By automating the load tendering process, we are not only driving down operational costs but also delivering faster, more reliable service to our customers. This innovation aligns perfectly with our 2025 targets: to automate our operations, enhance service levels for key enterprise clients, and expand the innovative capabilities of our SaaS TMS solution, Fleet Rocket. Developed in collaboration with Trebu.ai, a Y Combinator-backed startup specializing in AI automation, this bot leverages cutting-edge technology to streamline freight management like never before.”
-Javier Selgas, CEO of Fr8Tech.
10. IGC Pharma, Inc. (NYSE:IGC)
Number of Hedge Fund Holders: 3
IGC Pharma, Inc. (NYSE:IGC) is a pharmaceutical company engaged in developing treatments for Alzheimer’s disease. The company integrates cutting-edge AI technologies into its drug discovery processes. On March 4, IGC Pharma announced that it has advanced its Artificial Intelligence platform with the development of a new AI-driven model. The model aims to improve the diagnosis of Alzheimer’s disease (AD) and other causes of dementia. Trained on multi-modal clinical data from leading public research databases, it analyzes neuroimaging biomarkers, cognitive assessments, genetic risk factors, medical history, neurological exams, and demographic information to enable precision in its diagnostic framework. As a result, reliable, personalized insights can be generated across different patient populations.
“The AI model is a potential game changer for our growth strategy. Our AI platform is a key driver of IGC Pharma’s long-term growth strategy, reinforcing our commitment to precision medicine and targeted treatments for neurodegenerative diseases. Misdiagnosis remains a significant challenge, often delaying treatment for patients who need it most. Our AI-driven model aims to close this gap, ultimately improving patient outcomes.”
-Ram Mukunda, CEO of IGC Pharma.
9. Lantronix, Inc. (NASDAQ:LTRX)
Number of Hedge Fund Holders: 17
Lantronix, Inc. (NASDAQ:LTRX) designs and sells IoT products and services globally. On March 4th, the company announced a breakthrough in AI-powered camera technology with the integration of its high-performance Open-Q™ System-on-Module (SoM) solutions with Teledyne FLIR’s thermal infrared (IR) camera modules and Prism™ embedded software. This advancement will allow the development of next-generation AI-enabled camera solutions in autonomous navigation/drones, surveillance, and robotics.
“With Lantronix’s Open-Q SoMs, developers can confidently build AI-powered solutions knowing they are backed by industry-leading embedded compute technologies that deliver longevity, reliability and continuous innovation. By integrating with Teledyne FLIR’s advanced thermal camera modules, Lantronix provides a turnkey embedded AI solution that maximizes performance while simplifying development and deployment.”
-Mathi Gurusamy, Chief Strategy Officer at Lantronix.
8. Synaptics Incorporated (NASDAQ:SYNA)
Number of Hedge Fund Holders: 27
Synaptics Incorporated (NASDAQ:SYNA) is a global developer and fabless supplier of premium mixed-signal semiconductor solutions that enable interaction with connected devices and data. On March 5th, the company announced that it will be showcasing its latest innovations in Edge AI and wireless connectivity at Embedded World 2025 in Nuremberg, Germany. It will unveil a new family of microcontroller units (MCUs) and wireless systems-on-chips (SoCs) designed for a wide range of ultra-low-power devices with smart AI and strong connectivity. IoT system designers will be able to create smarter, efficient devices at lower costs. Synaptics’ new products will be able to support devices such as smartwatches and other wearables, consumer audio, appliances, security cameras, asset trackers, and factory automation systems, enabling powerful functions such as predictive maintenance, and enhanced security.
7. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 63
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On March 5, Palantir CEO Alex Karp and TWG Global’s team including Mark Walter, Thomas Tull, and Drew Cukor announced a joint venture to revolutionize AI deployment in banking and other financial services. TWG Global is a management consulting firm that operates businesses and investments in technology and AI, financial services, private lending, sports, and media. Palantir will be integrating its AI infrastructure with TWG’s deep expertise in business operations and financial services, empowering financial institutions to integrate AI at scale.
The two companies have already been working throughout the past year to embed AI into TWG’s companies. This joint venture is the next step towards their collaboration, embedding intelligence across every core function of financial institutions and insurance companies to achieve several advantages such as risk mitigation, reshoring capabilities, adaption to shifting labor dynamics, and future-proofing of banks and insurers against market volatility and regulatory pressures.
“Palantir is proud to partner with TWG Global to further seamlessly weave AI into the fabric of financial services and help forward-looking companies unlock enormous opportunity. By combining TWG’s deep industry expertise with Palantir’s world-leading software, we are empowering businesses to not just navigate today’s complex global market, but to position themselves for dominance in it by remaining at the forefront of the AI revolution.”
-Alex Karp, co-founder and chief executive officer of Palantir Technologies.
6. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 77
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection. On March 4th, the company reported its fourth quarter and fiscal year 2025 results. Its EPS of $1.03 was $0.17 better than the analyst estimate of $0.86, while revenue for the quarter came in at $1.06B versus the consensus estimate of $1.03B. Looking ahead, the company forecast first-quarter revenue slightly below estimates, as it struggles with weak spending on its cybersecurity products. It expects first-quarter revenue between $1.10 billion and $1.11 billion, the midpoint of which is slightly below analysts’ estimates of $1.11 billion as per data compiled by LSEG.
“Delivering $224 million of net new ARR, which brings our ending ARR to $4.24 billion, places us firmly on the flight path to our $10 billion ending ARR goal. As businesses of all sizes rapidly adopt AI, stopping the breach necessitates cybersecurity’s AI-native platform. We are seeing strong momentum in our Next-Gen SIEM, Cloud Security, and Identity Protection businesses, surpassing $1.3 billion in combined ending ARR. With 97% gross retention and accounts adopting Falcon Flex adding over $1 billion of in-quarter deal value, customers are increasingly consolidating on the Falcon platform as their AI-native SOC for today and tomorrow.”
-George Kurtz, CrowdStrike’s Founder and CEO.
5. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 95
AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology. On March 5th, Arete analyst David Mak downgraded the stock to “Sell” from Neutral with a $200 price target. According to the firm, there are risks to AppLovin’s ecommerce growth story. The company is “failing to provide compelling” return on ad spend at scale across typically low quality, long-tail mobile gaming ad inventory. The firm’s prior bull case has been priced into the stock, and consensus estimates “now appear too high on any reasonable view”.
Besides the sell rating from Arete, AppLovin has also recently been the subject of claims from short seller reports alleging how the company has been misrepresenting the benefits of its AI advertising platform. CEO Adam Foroughi has since refuted these claims, and several analyst firms have also backed the company platform stating that it complies with App Store and Google Play policies, and that its business model is focused on genuine user engagement rather than artificial metrics. AppLovin is also being audited by a Big Four firm, reflecting on its high standards of financial reporting.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 126
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On March 5th, Goldman Sachs reiterated the stock as “Neutral” with a price target of $320. The firm said it sees “difficult conditions ahead” for Tesla. In particular, it talked about weaker-than-expected vehicle deliveries in key regions and ongoing demand challenges.
“We lower our below consensus delivery estimates for Tesla reflecting the quarter to date data for key regions (i.e. China, Europe, and the US), as well as what we believe are broader demand trends,” analysts wrote.
Discussing its Full Self-Driving (FSD), the firm said that it sees progress with version 13 but believes Tesla may struggle to monetize it in China, where “multiple competitors… are also offering hands-free ADAS solutions without an incremental software package needing to be purchased.”
“We remain Neutral rated on the stock, and we lower our 12-month price target to $320 from $345. We continue to expect Tesla to face difficult fundamental conditions in the near-term, and our EPS estimates are below the Street for 2025.”
3. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 162
Salesforce Inc (NYSE:CRM) is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce. On March 4th, the company announced the launch of AgentExchange, the trusted marketplace and community for Agentforce. This new marketplace and community, integrated directly into its AI CRM platform, empowers partners, developers, and the Agentblazer community to build and monetize agentic AI components.
It comprises more than 200 initial partners and hundreds of ready-made actions, topics, and templates that have gone through rigorous security and customer reviews to enable organizations to create and deploy AI agents to improve productivity, efficiency, and innovation. Last week, Salesforce AI executive Alice Steinglass said that “This is going to be the last generation of managers who manage a wholly human workforce. According to her, the launch of AgentForce has meant tremendous growth and success with 3,000 deals already.
“Customers want this new form of digital labor.” While Agentforce is a digital labor platform for Salesforce, AgentExchange is the marketplace on top of Agentforce that developers can use to create and sell AI agents, or businesses can even look through, test, and buy pre-built AI actions, templates, and agent solutions.
“When we launched AppExchange in 2005, it helped our customers get even more value from our platform with prebuilt apps, workflows, and integrations. It also gave our partners an opportunity to participate in the emerging cloud economy and build thriving businesses. With AgentExchange, we’re doing much the same — opening up Agentforce for partners, startups, and Agentblazers to participate in the digital labor market and build agentic AI on Salesforce.”
-Brian Landsman, EVP & GM, Global Business Development & Partnerships at Salesforce.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. One of the biggest analyst calls on Wednesday, March 5th, was for Apple Inc. Bank of America reiterated the stock as “Buy” and retained the price target of $265.00. The firm said it is sticking with the stock following data that shows App Store revenue increasing. App store revenue has witnessed a year-over-year revenue increase of 14% in the second fiscal quarter of 2025, driven by the expansion in its Productivity app category due to applications like ChatGPT.
Apple has also been broadening its ecosystem, including the Apple TV App on Android devices, which is anticipated to boost long-term subscription revenues. The company is also positioning itself to capitalize on advancements in AI on edge devices, another reason why the firm is optimistic on Apple’s earnings resilience and stable cash flows.
“Our Buy rating on Apple is based on 1) expected strong iPhone upgrade cycle in F25, F26 driven by the need for latest hardware to enable Gen AI features, 2) higher growth in Services revenue…”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. One of the biggest analyst calls on Wednesday, March 5th, was for Nvidia Corporation. Bank of America reiterated the stock as “Buy”, stating that it is adding the stock to its global contenders list and says it sees above average earnings momentum.
“NVIDIA is a Contender this month.”
While we acknowledge the potential of NVDA 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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