In this article, we discuss 12 trending AI stocks on latest news and ratings.
Addressing Power Shortages for AI Data Centers
The demand for energy-intensive AI data centers is outpacing supply, and while solutions like crypto site conversions, and nuclear power are promising, substantial action is needed to prevent significant power shortages in the near future.
In an interview on CNBC’s ‘The Exchange,’ Stephen Byrd from Morgan Stanley discussed the potential for converting crypto mining sites into data centers to address the power shortage for AI data centers. He noted that while Bitcoin mining companies have lucrative options, including converting sites into data centers, the high price of Bitcoin complicates decisions.
Byrd estimated a significant power shortfall of over 30 gigawatts by 2028, with solutions like Bloom Energy’s fuel cells and crypto site conversions offering partial relief. However, he warns that connecting new data centers to the grid could take years, and prices for electricity are likely to rise, creating potential political challenges. Other solutions include nuclear power and natural gas turbines, especially in regions like West Texas.
READ ALSO: Top 15 AI Stock News and Ratings Dominating Wall Street and Jim Cramer Discussed 18 Companies That Hit $100 Billion in Market Cap in 2024.
Oil Giants Explore Power Solutions for AI Data Centers
Major U.S. oil companies are considering entering the electricity market by supplying natural gas-powered electricity with carbon capture technologies to meet the growing energy demands of AI data centers. Reuters reported that Chevron has been in talks for over a year to provide natural gas-fired power combined with carbon capture solutions, while Exxon plans to offer low-carbon electricity to data centers by the end of the decade.
The move comes as the rise of AI technologies is driving a significant increase in electricity demand, prompting the need for new energy infrastructure. The companies plan to use their expertise in natural gas and carbon capture to help meet this demand, potentially reshaping the power market.
For this article, we selected AI stocks by going through 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).
Photo by Maximalfocus on Unsplash
12. Symbotic Inc. (NASDAQ:SYM)
Number of Hedge Fund Holders: 15
Symbotic Inc. (NASDAQ:SYM) uses AI-driven automation technology to optimize warehouse operations, focusing on pallet and case processing for retail distribution centers.
On December 13, Symbotic (NASDAQ:SYM) announced the completion of its acquisition of OhmniLabs, a robotics innovator specializing in healthcare solutions. OhmniLabs, known for its autonomous disinfection and telepresence robots, will contribute its talent and innovation to further improve Symbotic’s automation offerings across industries. According to Rick Cohen, Executive Chairman and CEO of Symbotic, the merger combines Symbotic’s expertise in large-scale automation with OhmniLabs’ mobile robots, AI, and vision systems. Cohen Said:
“Combining Symbotic’s expertise in large-scale automation with OhmniLabs’ ground-breaking mobile robots, vision, and A.I solutions will enable the development of unparalleled automation innovations across different settings… We were drawn to OhmniLabs for its impressive talent and industry experience that will enable our expansion beyond the four walls of the warehouse.”
11. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 17
C3.ai, Inc. (NYSE:AI) provides enterprise AI software, including the C3 AI platform for developing AI applications and C3 Generative AI for data retrieval and integration.
It was reported on December 11 that C3.ai (NYSE:AI) and Collins Aerospace have expanded their partnership to develop AI solutions for the defense and intelligence sectors. The collaboration aims to provide federal agencies with advanced AI tools for better decision-making, readiness, and national security. Key initiatives include deploying applications from C3 AI’s Defense and Intelligence Suite, such as C3 AI Readiness and C3 Generative AI for Defense. This partnership is focused on equipping federal agencies with the technology necessary to improve situational awareness and drive national security efforts.
10. STMicroelectronics N.V. (NYSE:STM)
Number of Hedge Fund Holders: 18
STMicroelectronics N.V. (NYSE:STM) designs and manufactures semiconductor products, integrating AI into its solutions across automotive, industrial, and consumer electronics.
On December 11, STMicroelectronics and Qualcomm Technologies launched their first joint product, the ST67W611M1 module, to streamline next-gen wireless IoT solutions. Combining STM’s STM32 ecosystem with Qualcomm’s wireless expertise, the module supports Wi-Fi 6, Bluetooth 5.3, and Thread, and is compatible with the Matter protocol for future IoT integration. It features 4MB Flash, a 40MHz crystal, and advanced hardware security with PSA Certified Level 1 protection. Optimized for AI edge applications, it leverages STM32 tools like STM32Cube.AI and NanoEdge AI. Samples are available now, with OEM release expected in Q1 2025 and wider availability by Q2 2025.
9. Five9, Inc. (NASDAQ:FIVN)
Number of Hedge Fund Holders: 29
Five9, Inc. (NASDAQ:FIVN) offers AI-powered cloud software for contact centers, featuring tools like virtual agents, agent assist, and AI insights to manage customer interactions across multiple channels.
Five9 was awarded the 2024 Aragon Research Innovation Award for AI Contact Centers and recognized as a Leader in two Aragon Research Globe reports: AI Agent Platforms in the ICC, 2025, and Intelligent Contact Center, 2025. The recognition highlights Five9’s strategic vision for AI-driven innovation in customer experience (CX), emphasizing collaboration between AI agents and human agents to deliver personalized, efficient service. Five9’s advancements, including the Five9 GenAI Studio and AI-powered agents, aim to improve CX and industry standards. The award was presented during Aragon Transform 2024.
8. UiPath Inc. (NYSE:PATH)
Number of Hedge Fund Holders: 34
UiPath Inc. (NYSE:PATH) offers an AI-powered automation platform that improves decision-making and information processing through embedded machine learning and natural language processing. Its low-code tools and Automation Cloud enable efficient deployment across industries like banking, healthcare, and manufacturing.
On December 12, UBS initiated coverage of UiPath (NYSE:PATH) with a Sell rating and a $14 price target, citing a growing competitive landscape from major tech companies and AI startups, as per The Fly. The firm expressed concerns over a challenging sales environment and flat customer growth since late 2022. UBS also noted the lack of signs indicating improved net retention rates or the success of UiPath’s recent reorganization efforts. The firm expects net new ARR growth to underperform industry expectations in 2025 and 2026 due to increasing competitive pressures.
7. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 37
SentinelOne, Inc. (NYSE:S) provides AI-driven cybersecurity solutions through its Singularity Platform, offering autonomous threat prevention, detection, and response across endpoints, cloud workloads, and identity systems. Its AI capabilities ensure seamless protection against diverse cyber threats globally.
SentinelOne (NYSE:S) has earned the Customers’ Choice distinction in Gartner’s Peer Insights “Voice of the Customer: Managed Detection and Response Services” report. Built on the AI-powered Singularity Platform, these services combine advanced technology with expert human oversight to provide strong protection against cyber threats. Users highlighted the solution’s proactive nature, including continuous monitoring, fast response times, and comprehensive incident handling, with praise for its AI-driven threat insights and detailed reporting dashboards. SentinelOne’s leadership in cybersecurity is further validated by its recognition in the 2024 Gartner Magic Quadrant for Endpoint Protection Platforms and its perfect score in the MITRE ATT&CK Evaluations.
6. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 49
MongoDB, Inc.’s (NASDAQ:MDB) solutions support AI-driven data management and are used across cloud, on-premises, and hybrid environments.
On December 12, Argus raised its price target for MongoDB (NASDAQ:MDB) to $360 from $336, maintaining a Buy rating after the company’s Q3 results. The firm highlighted MongoDB’s key role in driving innovation and product development, especially with the anticipated growth of generative AI applications. Argus also supports the company’s strategy of investing in go-to-market initiatives and expanding its salesforce, despite a planned reduction in operating margins for FY25.
5. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 64
Hewlett Packard Enterprise Company (NYSE:HPE) integrates AI into its solutions to help businesses analyze data, run AI applications, and manage computing tasks. Its AI tools support businesses in managing and leveraging data efficiently across industries.
On December 12, President & CEO of HPE, Antonio Neri joined the Barclays 22nd Annual Global Technology Conference and discussed HPE’s strategic direction, emphasizing growth through acquisitions, partnerships, and innovation. His vision positions HPE to lead in AI and networking, ensuring continued growth and value for shareholders.
Neri outlined HPE’s future as a networking leader post-Juniper acquisition, focusing on AI-driven infrastructure and expanded market reach. The partnership with NVIDIA aims to simplify AI deployment for enterprises, integrating HPE’s GreenLake cloud with NVIDIA’s software. Neri expressed optimism for HPE’s growth in 2025, driven by AI, server modernization, and networking, with IT spending expected to surpass GDP growth. He believes HPE’s diverse offerings will deliver better margins and value to shareholders.
4. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 71
Datadog, Inc. (NASDAQ:DDOG) provides an AI-driven observability and security platform for cloud applications, offering tools for performance monitoring, log analysis, incident management, and workflow automation.
Macquarie initiated coverage of Datadog (NASDAQ:DDOG) with an Outperform rating and a $200 price target, highlighting the company’s leadership in the observability space. The firm appreciates Datadog’s unified product, expanding platform, and strong, usage-based revenue model. It sees significant potential for market share growth driven by digital transformation, cloud migration, and GenAI spending, with revenue expected to grow at over 20% annually through FY27, along with improved margins.
3. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 78
ServiceNow, Inc. (NYSE:NOW) offers AI-powered workflow automation, incorporating machine learning, process mining, and robotic process automation for digital transformation.
On December 12, KeyBanc downgraded ServiceNow (NYSE:NOW) to Sector Weight from Overweight, citing concerns that the growing influence of Agents in the software sector could diminish ServiceNow’s early AI leadership. Additionally, potential cuts to government spending and high relative valuation amid limited upside to multiple expansions compared to peers led to the downgrade. The firm sees increased risks and reduced potential for further growth.
2. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce, Inc. (NYSE:CRM) integrates AI into its CRM platform, offering tools for predictive analytics, personalized customer insights, and workflow automation. Its AI-driven solutions help businesses optimize processes, predict outcomes, and enhance customer engagement across industries.
On December 13, KeyBanc upgraded Salesforce (NYSE:CRM) to Overweight from Sector Weight, praising its artificial intelligence offering, Agentforce, for setting a new standard in enterprise management software. The firm highlighted strong interest in Agentforce from Salesforce customers, partners, and investors. Although Agentforce is still in its early stages, KeyBanc believes it has the potential to drive demand across Salesforce Clouds. The firm set a $440 price target, noting that significant revenue from Agentforce is not expected until late 2025.
1. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 123
Adobe Inc. (NASDAQ:ADBE) integrates AI across its products to enhance content creation, marketing, and customer experiences.
On December 12, DA Davidson analyst Gil Luria reduced Adobe’s (NASDAQ:ADBE) price target from $685 to $625 while maintaining a Buy rating. The company’s Q4 results exceeded expectations, with both revenue and earnings outperforming consensus. Adobe’s management provided positive commentary on AI, although it emphasized that AI monetization is still in its early stages, the firm noted.
The company’s FY25 outlook, which implied a revenue growth of around 9%, came in lower than expected. However, the analyst views this guidance as potentially conservative, considering Adobe’s growth opportunities, such as monetizing its value for enterprises and expanding its freemium offerings.
While we acknowledge the potential of Adobe Inc. (NASDAQ:ADBE) 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 ADBE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
