Merely days after Donald Trump won a tightly-contested election for the top office in the US, Elon Musk, one of his most prominent backers, received further good news as xAI, the AI startup he founded in 2023, raised $5 billion in a funding round. The latest round of funding brought the valuation of the startup to over $50 billion. News publication The Wall Street Journal reported that Valor Equity Partners, Sequoia Capital, and Andreessen Horowitz were part of the raise, while the sovereign wealth fund of Qatar also participated in the funding process. This set of investors had also backed the startup with $6 billion in funding earlier this year.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
xAI has developed Grok, one of the leading AI chatbots in the world. It rivals the performance of chatbots from tech powerhouses with far greater resources. The firm also controls Colossus, one of the most powerful supercomputers globally. The supercomputer will become fully operational by the end of this year and Musk plans on expanding the hardware at the center of this endeavor to 200,000 GPUs. Last year, the startup also released PromptIDE, an integrated development environment designed for prompt engineering and interpretability research.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among 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).
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14. Rubrik, Inc. (NYSE:RBRK)
Number of Hedge Fund Holders: 23
Rubrik, Inc. (NYSE:RBRK) provides data security solutions to individuals and businesses worldwide. The cybersecurity platform of the firm uses AI and machine learning to monitor for threats and provide sophisticated data recovery. On November 20, Barclays raised the price target on the stock to $51 from $42 and kept an Overweight rating on the shares ahead of the earnings report on December 5. The advisory thinks the shared setup is solid given positive data points from resellers and industry commentary and improving annual recurring revenue contribution margin.
13. UiPath Inc. (NYSE:PATH)
Number of Hedge Fund Holders: 34
UiPath Inc. (NYSE:PATH) provides an end-to-end automation platform that offers a range of robotic process automation (RPA) solutions primarily in the United States, Romania, and Japan. Banco Azteca, a financial institution based in Mexico, recently announced that it had implemented a series of artificial intelligence and automation technologies offered by UiPath to improve efficiency and customer service. The firm has developed 190 automations as part of a broader digital transformation for a variety of use cases.
12. Fabrinet (NYSE:FN)
Number of Hedge Fund Holders: 42
Fabrinet (NYSE:FN) offers optical packaging, along with precision optical, electro-mechanical, and electronic manufacturing services. The company produces fiber-optic cables that power telecommunications, AI data centers, and the global Internet infrastructure. On November 20, B Riley downgraded the stock to Sell from Neutral with a price target of $178, down from $194. The advisory believes the trend of unbundling Nvidia’s GPU platforms will adversely impact Fabrinet’s optics business. The change won’t impact Nvidia’s GPU business but will impact Nvidia’s optics business, contends Riley.
11. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix, Inc. (NASDAQ:EQIX) is a California-based real estate trust that operates data centers and other technology assets. The firm helps AI businesses host AI infrastructure for AI model development and offers network-rich interconnected locations for AI inference. On November 19, the company announced that it would be building a new data center in Singapore with an initial investment of $260 million. The firm said the new facility will be strategically designed to support next-generation workloads, including artificial intelligence.
10. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 60
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. On November 20, the company announced that it would be introducing new AI innovations that help Dell and Microsoft customers simplify AI adoption, speed deployment and power demanding workloads in multi cloud environments. The announcement was made by Arthur Lewis, the president of the Infrastructure Solutions Group at Dell Technologies. Lewis said that the Dell-managed Dell APEX File Storage for Microsoft Azure will be available in public preview beginning in the first half of 2025.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. On November 20, investment advisory Bank of America maintained a Buy rating on the stock with a price target of $245. In an investor note, the advisory said that after having attended Qualcomm’s analyst day, which focused on diversification away from handsets into other semiconductor strategies across automotive, PC and IoT, it walked away upbeat given Qualcomm’s strong market positioning and long-term revenue targets, which suggest healthy growth potential across new segments.
8. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 91
Vertiv Holdings Co (NYSE:VRT) designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. On November 19, Citi raised the price target on the stock to $141 from $134 and kept a Buy rating on the shares. After attending the company’s investor day, the advisory thinks the company’s updated roadmap for the upcoming years, including accelerated organic growth, a solid margin expansion runway, and a flexible capital allocation plan, should support continued share price outperformance over time.
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. On November 19, MiTAC Computing Technology Corporation, a server platform design manufacturer, revealed a new server lineup at the Supercomputing Conference 2024. The new servers integrate the latest AMD EPYC 9005 Series CPUs, AMD Instinct MI325X GPU accelerators, Intel Xeon 6 processors, and professional GPUs to deliver enhanced performance optimized for HPC and AI workloads.
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. On November 21, financial news platform Forex Live reported, citing comments from the economy minister of Taiwan, that TSMC was expected to construct one new fabrication facility annually in Taiwan over the next decade. The minister further said that Taiwan needed to ensure adequate power and water resources to support these facilities. The minister also highlighted that new TSMC fabs in Kaohsiung, southern Taiwan, were ready to go, indicating they would be operational soon.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. On November 20, Rezolve AI, a firm that offers AI-driven solutions for retailers, announced that it had signed a strategic partnership with Google to accelerate the transformation of retail and consumer commerce through advanced artificial intelligence and cloud infrastructure. Through this collaboration, Google Cloud will resell Rezolve AI’s Brain Suite. Under this partnership, the two firms expect sales channels to generate over 50% of Rezolve AI’s forecasted revenues over the next several years.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On November 20, Loop Capital maintained a Buy rating on the stock with a price target of $175 price. In an investor note, the advisory noted that there has been increased noise throughout the Gen AI ecosystem of late, but analysis suggests that Nvidia’s anticipated demand trajectory remains intact. The note further detailed that GB200 NVL72 at material volume was really a July-September 2025 event, but it may not matter much as the amount of increased Hopper production may outweigh the amount of Blackwell forgone by the push out.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family. On November 20, investment advisory Jefferies maintained a Buy rating on the stock with a price target of $675. In an investor note, the advisory said it was bullish on the Meta hiring of Clara Shih, the former Salesforce CEO of AI. It termed the update a big step forward in Meta’s push to monetize its AI with businesses and enterprises. The advisory thinks Clara’s experience at CRM building Agentforce will be advantageous in Meta’s efforts to build Gen AI tools and agents for the more than 200 million businesses that leverage WhatsApp, Instagram and Facebook each month.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. On November 19, news publication The New York Post reported that Sam Altman, the founder of Microsoft-backed OpenAI, was raising funding for a new semiconductor startup named Rain AI. Per the report, the startup plans to raise $150 million in a funding round that would value the firm at more than $600 million. The processors made by the firm are more powerful and efficient than those made by chip powerhouse NVIDIA, per the publication.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. On November 20, news platform Spot Media reported that the tech giant was closing an AI and machine learning department it had set up in Romania. As part of the closure plans, nearly 400 people employed by the department are to be laid off. According to Spot Media, those who are being laid off have already been informed. The department, named AGI Data Services, managed and validated data to feed AI models and applications.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ: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 Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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