Northland Securities recently issued a rating for a stock amidst the DeepSeek AI frenzy. The firm noted that it isn’t concerned about the AI models just yet and that it doesn’t expect big tech giants to cut their capital expenditures when they report their earnings either. In light of this, the CEOs of tech giants such as Meta and Microsoft have recently defended their massive spending, noting how it was crucial to stay competitive in the new field.
Investors panicked after news spread over the weekend about a Chinese startup DeepSeek having released AI models that were built using less power and chips. In response, executives of tech giants are saying that building huge computer networks has been crucial to serving growing corporate needs. Even then, investors have been losing their patience with the huge amounts of spending and a dearth of hefty payouts.
READ NOW: These 29 AI Electricity and Infrastructure Stocks Are Crashing Due to DeepSeek News and 10 AI Stocks to Watch Amid the DeepSeek Buzz
DeepSeek has been causing a stir in the AI world and refuted the gap that previously existed between the AI capabilities in China and the US. After the first Chinese version of ChatGPT was released, there was a lot of disappointment in China considering it was not on par with ChatGPT. However, DeepSeek’s AI models have shifted the AI narrative completely.
Not only has it sparked a frenzy in the US, but even its domestic competition has been pressurized. This was made evident when Alibaba released a rival to DeepSeek’s model on the Lunar New Year. According to the company, the “Qwen 2.5-Max outperforms … almost across the board GPT-4o, DeepSeek-V3 and Llama-3.1-405B”. Even though DeepSeek’s AI models have been impressive, there is still skepticism and confusion regarding the demand for high-end AI chips and the need for power to run AI-centric data centers.
“There’s plenty of uncertainty over what the true demand for state-of-the-art chips, semiconductor fabrication plants and energy will be”.
-Economist Ed Yardeni said in a note.
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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12. Blaize Holdings, Inc. (NASDAQ:BZAI)
Blaize Holdings, Inc. (NASDAQ:BZAI) provides purpose-built, artificial intelligence (“AI”)-enabled edge computing solutions. On January 28, the company revealed its bold vision aimed at transforming real-world applications through advanced AI model efficiency and edge-based solutions. The emergence of the DeepSeek-V3 underscores Blaize’s long-held philosophy that a set of smaller, dynamically executed expert models is better in performance and more efficient than a large, dense model. In Light of this, Blaize’s programmable devices allow computing on less-structured and sparsely accessed data by using low-precision operations.
“As the AI industry shifts from traditional data center processing to more agile and scalable physical world AI applications, Blaize is well-positioned to introduce groundbreaking innovations that address complex challenges in defense, smart cities, emergency response, healthcare, robotics, autonomous systems, and more”.
-Blaize CEO Dinakar Munagala.
11. Guardforce AI Co., Limited (NYSE:GFAI)
Number of Hedge Fund Holders: 3
Guardforce AI Co., Limited (NYSE:GFAI) is an integrated security, AI, and Robot-as-a-Service (RaaS) provider. The company employs artificial intelligence (AI) in its operations, particularly through robotic solutions and data analysis to enhance security and operational efficiency within their cash management services. On January 28, the company announced that Guardforce Cash Solutions Security (Thailand) Company Limited (“GFCS”), the secured logistic subsidiary of Guardforce AI, has renewed contracts with the Government Savings Bank (GSB) in Thailand. The GSB has been its long-term customer and a trusted partner of Guardforce AI for decades. The renewed agreements will allow GFCS to continue delivering cash center operations and secured logistics services for coins under two three-year multi-million-dollar contracts. GFCS offers services including ATM replenishment, maintenance, and coin services to over 1,000 GSB branches across Thailand, representing over 95% of GSB’s nationwide network.
“These renewals extend our decade-long relationship with GSB and validate our position as Thailand’s premier secured logistics provider. The continued trust of a government-backed institution highlights the reliability and quality of our services on a national level.”
-Kelvin Chu, Managing Director at GFCS.
10. Research Solutions, Inc. (NASDAQ:RSSS)
Number of Hedge Fund Holders: 5
Research Solutions, Inc. (NASDAQ:RSSS) is a vertical SaaS and AI company focused on simplifying research workflow for academic institutions, life science companies, and research organizations. On January 28, the company announced that its AI-powered research platform, Scite, has grown by 250 percent year-over-year. The accelerated usage of their platform underscores its unique offering and helps it stand out for its broad access to pay-walled and open-access content, proprietary citation ranking data, expanded AI rights for comprehensive coverage, and flexible AI model integrations. The success of this platform is further exemplified by its implementation at Clemson University, streamlining research workflows and improving access to scientific literature.
“What makes our AI solution unique is our rights agreements with publishers. We have the most comprehensive access to scholarly content which is critical for our customers who require accurate, verifiable, and up-to-date research to make decisions. Additionally, we give customers the ability to choose which underlying AI model they use to ensure they get the best results and have choices as capabilities progress. Pairing this interoperability with our unique data and content access delivers consistently better outcomes for our customers”.
-Josh Nicholson, PhD, Chief Strategy Officer at Research Solutions.
9. BlackLine Inc. (NASDAQ:BL)
Number of Hedge Fund Holders: 23
BlackLine Inc. (NASDAQ:BL) is a leading cloud software provider that helps clients automate financial accounting processes. On January 30, BofA analyst Koji Ikeda upgraded the stock to “Buy” from Underperform with a price target of $75, up from $50. The accounting automation software provider introduced a new pricing and packaging strategy alongside its next-generation platform, Studio360, back in October. Blackline Studio 360 is a comprehensive platform for finance and accounting teams that leverages AI technology. According to the firm, these initiatives have the potential to drive platform usage and monetization.
“We are upgrading accounting automation software vendor BlackLine (BL) to Buy (from Underperform) and raising our PO to $75 (from $50). Three months after announcing a new business strategy (more below), we deduce that BlackLine finally has the right technology and pricing/packaging in place to drive accelerating revenue growth which should be a catalyst.”
8. HealthStream, Inc. (NASDAQ:HSTM)
Number of Hedge Fund Holders: 23
HealthStream, Inc. (NASDAQ:HSTM) is a leading healthcare technology platform for workforce solutions. On January 27, the company announced the launch of the HealthStream Learning Experience™ (HLX), an AI-powered learning experience application. The application will use a wide range of learning modalities to allow the healthcare workforce to access personalized, self-directed, and intelligent learning pathways. A wide variety of data will be used to make smart recommendations of content and development pathways for every healthcare professional. The application will also be integrated with HealthStream’s Learning Center® and HealthStream’s Competency Suite, allowing it to assess each individual’s unique skills and competencies and help identify career growth objectives and gaps.
“We are excited to already have three large healthcare organizations that have chosen to make the HLX a centerpiece of their employee development experience: two as designated launch partners and each demonstrating a forward-thinking approach to developing their respective workforces. They understand that in order to achieve maximum engagement, it is beneficial to now provide employees with tools that are more like what they use in their personal lives. I believe the HLX is exactly the application that will take their employees’ learning experiences to the next level.”
-Kevin O’Hara, Senior Vice President, Platform Solutions & Product Strategy, HealthStream.
7. 8×8, Inc. (NASDAQ:EGHT)
Number of Hedge Fund Holders: 12
8×8, Inc. (NASDAQ:EGHT) is an integrated Platform that provides enterprise communications solutions. On January 30, the company announced advancements to its 8×8 Platform for customer experience, i.e. CX. The advancements include expanded 8×8 Secure Pay capabilities, AI-powered 8×8 Intelligent Customer Assistant innovations, and new customer engagement and employee collaboration enhancements. The goal of these innovations is to elevate CX, boost employee productivity and efficiency, as well as empower organizations to engage with customers across their preferred channels.
“8×8 continues to empower businesses to redefine how they connect, collaborate, and deliver exceptional customer and employee experiences. These innovations, from AI-powered solutions to enhanced security and streamlined workflows, ensure our customers stay ahead in an ever-evolving digital landscape. Our customers are given the tools to transform their CX strategy and adopt AI-powered technologies efficiently, eliminating complexity and technology risk, resulting in immediate business impact.”
-Hunter Middleton, Chief Product Officer at 8×8, Inc.
6. Celestica Inc. (NYSE:CLS)
Number of Hedge Fund Holders: 40
Celestica Inc. (NYSE:CLS) offers a range of product manufacturing and related supply chain services. On January 30, Barclays raised the firm’s price target on the stock to $139 from $91 and kept an “Overweight” rating. The rating has been issued following quarterly results. According to the firm, investors are valuing Celestica based on 2026 projected earnings, driven by the demand for specialized chips called ASICs which remain a medium-term trend. In particular, 2026 captures the run rate revenue of the TPUv6, Google’s latest generation AI accelerator. The firm further noted that Meta Platforms aims to launch a new ASIC program that could compete with the TPU program in terms of expertise and capability.
5. Zebra Technologies Corporation (NASDAQ:ZBRA)
Number of Hedge Fund Holders: 42
Zebra Technologies Corporation (NASDAQ:ZBRA) is a digital solutions provider offering enterprise asset intelligence solutions in the automatic identification and data capture solutions industry. On January 30, the company announced that it has expanded its Zebra Symmetry™ Fulfillment, Zebra’s comprehensive software solutions leveraging autonomous mobile robots (AMRs) and other technologies for improving warehouse productivity and reducing costs. The AI-powered solution integrates the functions of a warehouse execution system (WES) with robot fleet management and powerful analytics. The Zebra Symmetry™ Fulfillment will allow frontline workers to load and unload orders to and from carts without the need for the AMR to remain permanently attached to each cart, thereby increasing utilization and reducing the number of AMRs required in the fulfillment system. The workers, or pickers, will be able to pick more items in less time. They will be able to do this by coordinating each picker with a team of robots in a precise, directed workflow.
“The Zebra Symmetry Fulfillment solution is designed to help warehouse operations maximize the benefits of AMR-assisted picking to reduce costs and boost productivity. We are excited to bring intelligent automation to our warehouse customers to help ensure every movement is purposeful, every task is completed with precision, and throughput reaches its peak as this solution helps them optimize their labor and robotics resources.”
-Matthew Wicks, Vice President and General Manager, Robotics Automation, Zebra Technologies.
4. Dynatrace, Inc. (NYSE:DT)
Number of Hedge Fund Holders: 45
Dynatrace, Inc. (NYSE:DT) provides a software intelligence platform for monitoring and optimizing applications, infrastructure, and user experiences. On January 30, William Blair analyst Jake Roberge maintained their bullish stance on the stock, giving a “Buy” rating. The firm highlighted Dynatrace’s impressive third-quarter performance for its optimism, which exceeded market expectations in key areas. The company has also benefitted from its Dynatrace Platform Services (DPS) customers, a major driver of its subscription revenue growth. The company’s on-demand consumption trend is expected to continue, offering it a long-term growth opportunity as customers renew at higher tiers. Additionally, the company has made noteworthy advancements in its go-to-market strategy, with enhancements in pipeline development and enterprise deal closures. This is despite challenges in its commercial segment. Growth prospects were further bolstered by factors such as engagement with AI technologies and the rapid adoption of its Logs on Grail product, a log management and analysis feature within the Dynatrace platform.
3. Core Scientific, Inc. (NASDAQ:CORZ)
Number of Hedge Fund Holders: 58
Core Scientific, Inc. (NASDAQ:CORZ) has transitioned into an AI business by leveraging advanced infrastructure and expertise in HPC (high-performance computing). On January 30, analyst Gautam Chhugani from Bernstein maintained a “Buy” rating on the stock and kept the price target at $17.00. Chhugani’s buy rating reflects Core Scientific’s strategic positioning in the AI and Bitcoin mining landscape. Even though it recently faced a setback, it is in a good position to benefit from AI-focused initiatives leveraging its robust infrastructure. The company has reaffirmed its position as a hyperscaler with its readiness in power access and strategic partnerships with cloud partners such as CoreWeave. Moreover, its growth potential is supported by its ability to develop hybrid data centers within a limited time frame. The firm also noted that the company’s ambitions to enhance power capacity reflect its leadership in the sector. As such, the stock’s current valuation aligns more closely with Bitcoin mining rather than data center valuations. This is an attractive investment opportunity considering 70% of Core Scientific’s capacity is dedicated to AI.
2. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 89
GE Vernova Inc. (NYSE:GEV) is an energy equipment manufacturing firm that offers products and services essential for the generation, transmission, and storage of electricity worldwide. On January 28, Engine No. 1, Chevron U.S.A. Inc., and GE Vernova Inc. announced a partnership to build a new company that will develop scalable, reliable power solutions for US-based data centers running on U.S. natural gas. The initiative aims to launch the first multi-gigawatt-scale co-located power plant and data center during President Trump’s second term. The initial “power foundry” projects will utilize seven U.S.-made GE Vernova 7HA natural gas turbines and are anticipated to serve co-located data centers in the U.S. Southeast, Midwest, and West regions. Together, the companies will leverage the project to provide affordable, reliable energy to meet the significant demand for electricity to power U.S. data centers. The plans will deliver up to four GW, equal to powering 3-3.5 million U.S. homes. The initial in-service targeted is by the end of 2027.
“We are excited to enable the advancement of data center growth in the U.S. by supporting delivery of critical power needs to customers using innovative solutions. GE Vernova is uniquely positioned to provide the energy systems and support required to make this large-scale endeavor possible, as the leading U.S. energy manufacturer.”
– Scott Strazik, chief executive officer for GE Vernova.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On January 30, Scotiabank analyst Nat Schindler raised the firm’s price target on the stock to $627 from $583 and kept a “Sector Perform” rating on the shares. According to the firm, Meta has reported strong metrics throughout Q4, demonstrating broad-based strength and boasting a revenue beat. However, their concern regarding containing costs and driving monetization through AI over the years remains. The firm acknowledges Meta’s needs to continue its advancements but is uncertain whether these will contribute to the company’s earnings growth.
While we acknowledge the potential of META 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 META 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.
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