DeepSeek may have astounded the tech world following its emergence, but not everyone seems to be a fan. In the latest news report, Reuters reported that South Korea’s industry ministry temporarily blocked access to Chinese artificial intelligence startup DeepSeek due to security concerns. The government urges caution on generative AI services, particularly calling out ministries and agencies about using AI services such as ChatGPT and DeepSeek at work.
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State-run Korea Hydro & Nuclear Power reported blocking the use of AI services including DeepSeek earlier this month. The defense ministry has done the same for its computers that are for military use, reported officials. Yonhap News Agency has further reported restricting access to DeepSeek in computers that connect to external networks. South Korea, however, isn’t the only country that despises DeepSeek for its security vulnerabilities.
BBC has also reported on the matter, stating that Australia has banned DeepSeek from all government devices and systems. The country is concerned over the security risk the Chinese artificial intelligence (AI) startup poses. Its government further insisted that the ban comes not because the startup is Chinese, but because of the “unacceptable risk” it poses to national security. The move specifically requires government entities to “prevent the use or installation of DeepSeek products, applications, and web services”, as well as remove any previously installed, on any government system or device. As a result, a wide range of workers won’t be able to use DeepSeek in the country.
Similarly, the US Navy has also banned the use of DeepSeek, as reported by CNBC last week. The Navy reportedly said that DeepSeek’s AI was not to be used “in any capacity” due to “potential security and ethical concerns associated with the model’s origin and usage.”
“We would like to bring to your attention a critical update regarding a new AI model called DeepSeek,” The memo said it’s “imperative” that team members do not use DeepSeek’s AI “for any work-related tasks or personal use.”
-The Navy’s warning to the distribution list OpNav, Operational Navy.
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12. Inspira Technologies Oxy B.H.N. Ltd. (NASDAQ:IINN)
Number of Hedge Fund Holders: –
Inspira Technologies Oxy B.H.N. Ltd. (NASDAQ:IINN) is a medical technology company. On February 5th, the company announced that it has integrated a next-generation oxygenation indicator into its AI-powered HYLA™ blood sensor technology. The integration will help detect critical oxygen-related conditions without the need for intermittent blood draws. The advanced AI-powered system works by indicating the level of lung function and monitoring vital blood parameters. This is done through the use of sophisticated optical sensors and machine-learning algorithms that deliver continuous monitoring of blood parameters and oxygen levels. Clinical validation of the technology is currently underway at Sheba Medical Center.
“This advancement marks an important step in transforming critical care monitoring. The integration of this new oxygenation indicator into HYLA will enable healthcare providers to monitor and respond to changes in tissue oxygenation in real-time. We continue to advance in our clinical evaluation program and look forward to sharing preliminary clinical results with the public in the near future, which we hope will further validate the HYLA’s unique technological offering and superiority over traditional blood sensors in the market.”
-Dagi Ben-Noon, chief executive officer of Inspira.
11. BigBear.ai Holdings, Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 7
BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions. On February 5th, the company announced that it had been awarded a contract by the Department of Defense (DoD) Chief Digital and Artificial Intelligence Office (CDAO) to advance BigBear.ai’s Virtual Anticipation Network (VANE) prototype. Through this initiative, BigBear.ai will support the CDAO and Office of the Secretary of Defense (OSD) by using custom AI models to analyze news media from countries considered potential foreign adversaries. It will enhance CDAO’s capability to identify key trends and topics related to potential foreign adversarial areas of interest, in turn helping efficiently assess media data crucial for national security. VANE has been developed to aggregate and analyze vast data points so that it can predict adversarial activity in complex situations.
“We are honored to continue our support in the modernization of our nation’s defense efforts. This award underscores the importance of leveraging cutting-edge AI technologies to address complicated geopolitical challenges. By advancing VANE within CDAO, we are arming our warfighters with sophisticated intelligence capabilities to leverage foreign insights critical to the safety of our Nation and those protecting it.”
-Ryan Legge, President of National Security at BigBear.ai.
10. SoundHound AI (NASDAQ:SOUN)
Number of Hedge Fund Holders: 11
SoundHound AI (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses. On February 5th, the company announced the launch of Brand Personalities, a cutting-edge feature for its SoundHound Chat AI Automotive voice assistant. The SoundHound Chat AI Automotive voice assistant is an innovation that allows automakers to customize unique personas for their in-vehicle voice assistants, enhancing both user experience and brand loyalty for Original Equipment Manufacturers (OEMs). Building on the core features of SoundHound Chat AI Automotive’s best-in-class voice assistant, this is the first-of-its-kind feature that will allow automakers to keep the end user in focus. Car makers can customize everything from response style, character, and vivaciousness tailored to their specific needs, and even introduce seasonal characters for campaigns. SoundHound’s unique software architecture allows car makers to create multiple personas for specific sub-brands or model lines, thereby rendering different personalities to reflect the unique needs of their customers.
“As automakers look to differentiate their offerings, SoundHound designed Brand Personalities to elevate the in-car experience beyond what’s expected, giving brands complete control over how they engage with their consumers. This innovation goes beyond functionality. It is a fully customizable, deeply engaging experience that builds meaningful connections and long-term brand loyalty.”
-Michael Zagorsek, COO of SoundHound AI.
9. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 25
Strategy, formerly known as MicroStrategy Incorporated (NASDAQ:MSTR), offers AI-powered enterprise analytics software and services. It is the largest corporate holder of Bitcoin and the world’s first Bitcoin Treasury Company. On February 5, the company announced that it had changed its name to Strategy, reflecting on Bitcoin and AI as the two transformative technologies of the industry. Strategy will continue to trade under the ticker MSTR. The company reported financial results for the fourth quarter of its 2024 fiscal year on the same day. It reported a loss of $3.03 per share, compared to earnings of 50 cents last year. Revenue also declined 3% to $120.7 million. The consecutive quarterly loss stems from booking an impairment charge on its stockpile of the cryptocurrency. The company booked impairment losses from digital assets of $1.01 billion in the quarter, as compared with $39.2 million a year ago.
“Earlier today, we announced that we are now Strategy, a new name that powerfully and succinctly conveys the universal and global appeal of our company. Strategy is at the cutting edge of innovation, championing the two most transformative technologies of the 21st century: Bitcoin and AI. We have completed $20 billion of our $42 billion capital plan, significantly ahead of our initial timelines, while leading the digital transformation of capital in the financial markets. Looking ahead to the rest of 2025, we are well-positioned to further enhance shareholder value by leveraging the strong support from institutional and retail investors for our strategic plan”.
-Phong Le, President and Chief Executive Officer.
Strategy has been splurging on cryptocurrency and also announced plans to raise even more funding.
“The fourth quarter of 2024 marked our largest ever increase in quarterly bitcoin holdings, culminating in the acquisition of 218,887 bitcoins acquired for $20.5 billion, since the end of Q3. We carried this strong momentum forward into Q1, raising an additional $584 million through the launch and upsize of the inaugural STRK convertible preferred offering which was supported by both institutional and retail investors. 2025 will take our evolution further with the introduction of the BTC $ Gain KPI and when we adopt fair value accounting for our bitcoin holdings with our Q1 results, transforming our financial results and bringing more transparency to the value generation and profitability of our treasury operations”.
-Andrew Kang, Chief Financial Officer.
8. Cognizant Technology Solutions Corporation (NASDAQ:CTSH)
Number of Hedge Fund Holders: 39
Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is a professional services company that provides consulting technology and outsourcing services. On February 5th, the company reported its fourth quarter and full-year 2024 financial results. The company’s revenue stood at $5.08 billion, compared to analysts’ expectations of $5.07 billion, according to data compiled by LSEG. Moreover, adjusted profit came in at $1.21 per share in the quarter ended December 31, compared with estimates of $1.12 per share. The company forecast annual revenue below estimates due to uncertainty about the path of future interest rate cuts which has forced companies to temper spending on IT services and consultancy. High capital costs have been straining IT spending, compelling enterprises to cut back on consultancy services and prioritize investments in AI-related projects. Chief Executive Officer Ravi Kumar S. further highlighted accelerated investments in their AI-led platforms and the addition of new capabilities with the acquisitions of Thirdera and Belcan, strengthening and diversifying the company portfolio.
“I am deeply grateful to our employees for their commitment to our strategic priorities and rigorous execution, which drove fourth quarter revenue growth to the high end of our guidance range. We exited the year with momentum — closing a record 29 large deals during the year — highlighting the effectiveness of our strategy. In 2024, we accelerated investments in our AI-led platforms and added new capabilities with the acquisitions of Thirdera and Belcan, further strengthening and diversifying our portfolio. Our focus on client centricity, agility, and innovation is helping clients unlock the next wave of hyper productivity and enterprise-grade generative AI adoption.”
-Ravi Kumar S, Chief Executive Officer.
7. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On February 5, Tyler Radke from Citigroup reiterated a Hold-equivalent “Neutral” rating on the stock and raised his price target to $110 from $42 previously. The analyst has reservations about the stock, despite Palantir reporting blockbuster earnings driven by robust artificial intelligence demand. Acknowledging that Palantir’s earnings were “impressive,” Radke expressed concerns about its valuation with the stock trading at more than 500 times future earnings estimates.
“While metrics point to inflecting AI growth, we could get more constructive if PLTR showed sustainable levels of upside revisions. There was likely some non-repeatable budget flush in Q4 and now hitting softer Q1 seasonality.”
-Tyler Radke
The analyst has noted that the rise in share price for Palantir has been due to demand driven by the company’s suite of artificial intelligence (AI) products. However, the company’s updated regression implies an enterprise value-to-sales multiple of 56 times for 2026. The return profile for software companies trading above 50 times forward EV/sales “hasn’t been good.”
6. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 56
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products. On February 5, David Grossman from Stifel Nicolaus maintained a “Buy” rating on the stock with a price target of $290.00. IBM’s growth prospects and financial outlook have led to the buy rating for the stock. The company’s management has presented a new financial roadmap that focuses on moderate revenue growth, a projected annual expansion of operating margin, and free cash flow growth exceeding revenue growth. The analyst noted that IBM has several avenues for achieving revenue growth targets, especially through accelerated software growth. The company has already witnessed its software segment recording its biggest revenue jump in five years in Q4, with customers prioritizing spending on cloud infrastructure amidst a rush to adopt the data-intensive generative artificial intelligence technology. Additionally, its current trading position at a fair valuation combined with its dividend yield suggests potential price appreciation. Free cash flow generation is also improving, increasing IBM’s ability to invest in growth.
5. 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 February 5th, Tipranks reported that Mizuho Securities analyst Maheep Mandloi has reiterated their bullish stance on the stock, giving a “Buy” rating on January 29. The buy rating is guided by GE Vernova’s strong growth potential and market position. New strategic partnerships have led to robust pricing power for the company in its gas business. The company’s power and electrification segments also demonstrate strength, and there are expectations of continued improvement in free cash flow conversation and growth from wind energy recovery and zero-carbon technologies. Mandloi is also optimistic about GE Vernova benefiting from increased AI investments that support the demand for its gas and grid operations. Improving productivity in the company has led to an increase in power GW deliveries, which it is selling at higher selling prices due to rising power prices. Lastly, strategic partnerships are helping the company enhance its ability to deliver zero-carbon solutions.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops semiconductors, providing processors and graphics technologies for gaming, data centers, and AI-driven high-performance computing. On February 5th, analyst Blayne Curtis from Jefferies maintained a “Buy” rating on the stock and a $135.00 price target. The firm’s buy rating stems from AMD’s strong performance in the Client and Server segments. Both of these segments are currently outperforming and even gaining market share from competitors such as Intel. The artificial intelligence segment may have slowed down for now, but the release of the MI350x scheduled for the latter half of the year will drive future growth. Additionally, recent financial results show AMD’s strength in the PC client business and gaming sectors, contributing to the revenue beat. Curtis is concerned about the AI segment’s performance, but overall growth in AMD’s core business warrants a buy.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On February 3rd, Bernstein reiterated the stock as “Outperform”, noting that it sees little effect from tariffs on stocks such as Nvidia at the moment.
“Overall we continue to see little direct impact to our space or coverage from potential tariff increases on Mexico, Canada, and China; rather indirect effects, as well as escalation remain the larger potential worry as overall semiconductor imports (from all countries) might be large enough to be affected by more broad-based actions should the new administration feel so inclined.”
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. One of the biggest analyst calls on Wednesday, February 5th, was for Alphabet Inc. Bank of America reiterated the stock as “Buy” with a $225 price target. The firm said it is sticking with its buy rating following the company’s “solid” earnings results on Tuesday. It said it is motivated by Search growth and that Wall Street may be underestimating the revenue potential of AI Overviews in 2025.
“We are encouraged to see another quarter of strong Search growth and think Street could be underestimating Al Overview benefits for Search monetization in 2025.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. On February 5th, Reuters reported that the company is set to release its long-awaited – and delayed – Alexa generative artificial intelligence voice service. The press event has been scheduled for later this month to preview. The report further elaborates that Amazon sent press invites on Wednesday to an event to be held on February 26 in New York. This event will be featuring the head of its devices and services team, Panos Panay. While the spokesperson said the event will be Alexa-focused, they declined to elaborate. The new generative AI-powered Alexa is designed to be able to converse with humans, and the company hopes it can eventually convert some of its hundreds of millions of users into paying customers. This is an attempt to generate returns for the unprofitable business. Company executives have said that AI service will be able to respond to multiple prompts in sequence and even act as an “agent” on behalf of users. February 14 marks a Go/ No Go meeting to make a final decision on the “street readiness” of Alexa’s generative AI revamp.
While we acknowledge the potential of 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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