In this article, we discuss the 13 AI news that broke the internet.
AI Moving from Prompts to Problem-Solving
As artificial intelligence continues to evolve, a new generation of AI systems is emerging. The new systems go beyond answering questions to autonomously completing tasks and solving problems. These “agentic” AI systems are set to revolutionize industries, from healthcare to finance, by taking on complex objectives and driving productivity in ways we have yet to fully experience.
Matt Wood, PwC’s global commercial technology and innovation officer, discussed this evolution of AI on CNBC’s ‘Squawk on the Street’. He highlighted the transition from basic question-answering systems to more advanced agentic systems capable of completing tasks on behalf of users. These systems will be able to respond to objectives like booking flights or managing investments by creating and completing to-do lists autonomously.
He predicts that within the next 12 months, agentic AI will become more integrated into everyday life, similar to how apps improve the functionality of smartphones. Wood also pointed out that AI is being adopted rapidly in regulated industries such as finance, healthcare, and manufacturing due to existing investments in data governance, which provide a solid foundation for leveraging generative AI.
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According to a Bloomberg report from December 13, companies like OpenAI, Salesforce, and McKinsey are already deploying agents to improve efficiency and reduce the need for human intervention in routine tasks. Agents can take on roles like personal assistants, collaborative coworkers, and supervisors, enabling employees to focus on higher-value work.
Although the agents won’t fully replace jobs, AI agents are expected to transform work environments, create new roles, and foster greater productivity, especially in sectors with complex, regulated processes. The widespread adoption of these agents could lead to changes in staffing models and workplace dynamics by 2025, with companies using fewer but more skilled workers.
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).
A macro view of a 5G/4G chips and modules, displaying the cutting edge technology of the company.
13. Hut 8 Corp. (NASDAQ:HUT)
Number of Hedge Fund Holders: 22
Hut 8 Corp. (NASDAQ:HUT) operates as a Bitcoin miner and energy infrastructure provider and provides services for energy optimization, equipment monitoring, and digital asset mining.
Local news channel WBRZ reported that West Feliciana Parish is set to host a $12 billion AI data center by Hut 8 (NASDAQ:HUT), which will create thousands of new jobs. Located off Hwy LA-964, the project follows the announcement of a Meta AI data center in the area. Hut 8 plans to complete the first phase by the end of 2025, which includes two 450,000-square-foot buildings and will employ 1,500 to 2,000 construction workers. The project will also bring permanent, high-end jobs in fields such as instrumentation, electrical work, welding, and pipefitting, boosting the local economy.
12. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 47
Fortinet, Inc. (NASDAQ:FTNT) offers AI-powered cybersecurity solutions and AI-driven tools for threat detection, security orchestration, and endpoint protection.
Mizuho raised the firm’s price target on Fortinet (NASDAQ:FTNT) to $78 from $68 and kept an Underperform rating on the shares as part of a 2025 outlook for the software group, as reported by The Fly on December 13. The firm increased price targets on several companies, largely a reflection of recent increases in comp multiples. It believes the most important trends benefiting software vendors today and in the future are digital transformation, generative artificial intelligence, data and analytics, contact center cloud migrations, DevOps, and next-generation security. Mizuho believes the industry’s risk/reward is more balanced entering 2025, but still attractive overall.
11. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 52
Twilio Inc. (NYSE:TWLO) provides a customer engagement platform with AI-driven solutions, including real-time data unification and automation for omnichannel campaigns.
Twilio’s (NYSE:TWLO) CEO Khozema Shipchandler joined Barclays 22nd Annual Global Technology Conference and shared his excitement about Twilio’s partnership with OpenAI, emphasizing the potential for AI to reduce costs and increase revenue for businesses, especially in customer service and sales. He highlighted how AI can strengthen the customer experience by resolving issues efficiently, boosting customer satisfaction, and enabling upselling opportunities.
Twilio’s integration with OpenAI allows businesses to leverage voice AI while utilizing their own customer data through unified profiles, ensuring data privacy. He also discussed the natural progression of AI across various communication channels, with a focus on voice and text, and mentioned the importance of data interoperability for running AI workloads. Shipchandler expressed confidence that Twilio’s contextual data, integrated with AI, provides a competitive edge in the CPaaS market.
10. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Palo Alto Networks, Inc. (NASDAQ:PANW) provides cloud-native security, threat intelligence, and network protection services across industries, focusing on leveraging AI for enhanced security automation and management.
Palo Alto Networks (NASDAQ:PANW) and Bell Canada have formed a strategic partnership to offer comprehensive, AI-powered cybersecurity services in Canada. This collaboration combines Bell’s expertise in Managed and Professional Services with Palo Alto Networks’ advanced security platform to provide strong protection against evolving cyber threats. Bell will support various Palo Alto Networks solutions, including Prisma Access, NGFW, Prisma Cloud, and Cortex XSIAM, to deliver improved threat prevention, operational efficiency, and secure digital transformation.
9. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 68
Intel Corporation (NASDAQ:INTC) designs and manufactures a range of products focused on AI, including processors, accelerators, and memory solutions. The company provides advanced technologies for AI workloads, supporting areas like data processing, security, and networking, while also delivering platforms for AI-driven automation and edge computing.
Reuters reported that Intel (NASDAQ:INTC) co-CEOs, Michelle Johnston Holthaus and David Zinsner, acknowledged that the company may have to sell its manufacturing operations if its upcoming 18A chipmaking technology, set for release next year, fails. This technology is crucial for Intel to bring a key PC chip back in-house after outsourcing production to Taiwan Semiconductor Manufacturing. While the company is already operationally separating its manufacturing division into Intel Foundry, with its own board and processes, the possibility of a complete separation remains undecided. Intel’s struggles have led to a significant loss in value, and the company is seeking to regain its footing in the competitive chip market.
8. Arista Networks Inc (NYSE:ANET)
Number of Hedge Fund Holders: 70
Arista Networks Inc (NYSE:ANET) develops and sells data-driven networking solutions, including AI-powered Ethernet switching platforms for data centers, campuses, and routing environments.
At Raymond James 2024, TMT & Consumer Conference Call, Arista executives (NYSE:ANET) Chantelle Breithaupt (CFO) and Ashwin Kohli (Chief Customer Officer) discussed the company’s outlook for 2025. Arista projects a 15% to 17% revenue growth, driven primarily by cloud and AI sectors. They emphasized the importance of maintaining growth across multiple verticals, including traditional data centers and cloud service providers while expanding into enterprise and campus markets.
Chantelle Breithaupt said:
“So if you look at Arista’s guide going into next year, the 15% to 17% revenue guide that you mentioned. That is — that scenario is based on what we anticipate to be more of a mix in cloud and AI, cloud AI is how we’re mentioning it. And so we’re very excited about the opportunity as we go into 2025. But we are very excited about all pieces of the company, enterprise, data center, enterprise campus, Tier 2 cloud service provider, et cetera. So we’re excited about the whole book of business. But going into 2025, our planned scenario for that guide is cloud and hyperscaler AI-oriented.”
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) develops and commercializes technologies for wireless communication, with a focus on AI-driven solutions for mobile, automotive, and IoT applications. The company invests in AI, cloud, and extended reality industries, advancing connectivity and performance in a range of products.
On December 12, Qualcomm (NASDAQ:QCOM) announced that Dr. Baaziz Achour will become Chief Technology Officer of Qualcomm Technologies, Inc., effective February 3, 2025, as Dr. James Thompson retires. Currently, Deputy CTO, Dr. Achour will oversee Qualcomm’s R&D and engineering efforts, focusing on wireless communications, computing, and AI.
Dr. Achour, who joined Qualcomm in 1993, has contributed significantly to the development of wireless technologies, including the launch of 5G, and will guide the transition to 6G. He holds degrees in Physics and Electrical Engineering and has 24 U.S. patents in wireless communications. Qualcomm’s CEO, Cristiano Amon, praised both Achour’s leadership and Thompson’s 33 years of contributions to the company.
6. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 89
GE Vernova Inc. (NYSE:GEV) provides a range of energy solutions, including gas, nuclear, and wind technologies, along with grid, solar, and storage systems. The company focuses on electrification and power conversion, offering solutions to support the growing demand for electricity driven by AI and other technologies.
GE Vernova (NYSE:GEV) has signed multiple contracts for natural gas turbines to power large data centers, with plans for 5-gigawatt campuses expected to begin operating by 2028, as reported by Bloomberg on December 12. In the past month alone, the company secured 9 gigawatts of turbine reservations from data center and power plant developers.
The growing demand for electricity, driven by AI and other technologies, is forecast to significantly increase U.S. power consumption, and fossil fuels, especially natural gas, are expected to play a major role in meeting this demand. GE Vernova is also planning to integrate carbon capture technology at its facilities in the coming decade to reduce emissions.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops a variety of processors, graphics, and AI-focused products, including GPUs, accelerators, and adaptive systems-on-chips. The company provides solutions optimized for AI workloads, data processing, and network acceleration, supporting applications across data centers, gaming, and embedded systems.
At Barclays 22nd Annual Global Technology Conference, AMD’s CFO and Treasurer, Jean Hu mentioned that she sees continued momentum, especially with the launch of the Turin family of products. She acknowledged the growing demand for AI but emphasized that general compute workloads, powered by CPUs, remain strong and will drive further growth. Looking ahead to 2025, AMD expects to build on the success of the MI300 series, with new products like the MI325 and MI350, and a broadening customer base. AMD continues to engage with major players like Microsoft and Meta while expanding into new sectors and applications for AI and general compute workloads.
Jean Hu also discussed AMD’s ongoing efforts to expand its presence in the GenAI market, emphasizing the importance of system expertise and software investment. She highlighted the company’s acquisition of VT Systems as a key step in developing system-level solutions, with the full benefits expected from their MI400 product in 2026.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOGL) offers a wide range of products, with a significant emphasis on AI technologies, including machine learning, data analytics, and cloud infrastructure. The company integrates AI across its services, enhancing its capabilities in cybersecurity, enterprise collaboration, and infrastructure solutions.
As reported by Bloomberg, Alphabet’s (NASDAQ:GOOGL) Google and Samsung have teamed up to enter the mixed-reality market with a new operating system, Android XR, and a Samsung-built headset, Project Moohan. This collaboration aims to challenge Apple’s and Meta’s mixed-reality products. Android XR will allow several companies to develop XR devices, including headsets and glasses, leveraging AI advancements. Samsung’s Project Moohan, which resembles Apple’s Vision Pro, offers features like switching between augmented and virtual reality modes, a larger field of view, and improved comfort for extended use. The headset will be priced more affordably than Apple’s Vision Pro and is expected to launch next year. Google is also working on augmented-reality glasses using AI to enhance everyday tasks.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) is heavily invested in AI and also focuses on AI-driven solutions for communication, content sharing, and augmented/virtual reality experiences to enhance user interaction across various platforms.
On December 12, Meta (NASDAQ:META) released a set of new research contributions aimed at advancing machine learning capabilities. These include Meta Motivo, a behavioral model for controlling virtual humanoid agents, and Meta Video Seal, an open-source watermarking model for video content. The team is also releasing several other artifacts focused on agent development, model strength, and innovative architectures for scalable learning.
Key highlights include Meta Motivo’s ability to solve tasks with human-like behavior and robustness, Meta Video Seal’s resilient watermarking technology for video traceability, and Flow Matching, a generative framework for diverse applications. Meta’s research supports open science and collaboration to promote responsible AI development and improve the community’s ability to build upon these advancements.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) provides a wide range of AI-powered solutions, including cloud services, productivity tools, and enterprise applications, enhancing business processes and security. The company integrates AI into its offerings, such as cloud computing, data analytics, and automation, to optimize customer and business experiences globally.
Microsoft’s (NASDAQ:MSFT) AI head, Mustafa Suleyman, is forming a new consumer health team in London, recruiting key figures from his previous work at DeepMind, Financial Times reported. The hires include Dominic King, former leader of DeepMind’s health division, and Christopher Kelly, a clinical research scientist and doctor. This team will focus on using generative AI for consumer health, addressing queries on conditions, symptoms, and mental health. Microsoft sees health as a vital area for AI innovation and continues to strengthen its team.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) provides a wide range of services, including cloud computing, machine learning, and data analytics, driving innovation across e-commerce, media, and advertising. The company is heavily investing in AI and also leverages it to enhance product offerings, optimize operations, and improve customer experiences.
TD Cowen has increased Amazon’s price target from $240 to $265 while maintaining a Buy rating. The firm identifies three main growth factors for 2025: improved operating margins supported by AWS and Advertising, cost efficiencies in eCommerce, and faster AWS revenue growth. Additionally, rising net cash is expected to offer flexibility in capital allocation.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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