AI initiatives by businesses across the world are attracting the attention of investors. For example, the latest developments come from Finland, where Nokia, a once powerful phone maker who has now shifted focus towards telecom equipment, recently announced that it had purchased an application programming interface (API) hub and marketplace from US company Rapid. The hub is the largest of its kind in the world and is part of a larger effort by the Finnish company to boost revenues from 5G deployments. 5G tech has been a key reason for AI growth in the past few years. 5G speeds allow faster processing of AI tasks on mobile devices.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Across the pond, AI startup CoreWeave has secured more than $650 million in funding led by top names like Jane Street, Magnetar, Fidelity Management and Macquarie Capital. The startup specializes in providing cloud-based graphics processing unit (GPU) infrastructure to artificial intelligence developers. The company is now valued at more than $23 billion. In May this year, the firm was valued at $19 billion after a funding round led by investment firm Coatue that managed to raise over $1 billion. According to venture capital firm Accel, funding of AI and cloud companies in the US, Europe and Israel is estimated to hit $79.2 billion by the end of the year.
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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15. Rubrik, Inc. (NYSE:RBRK)
Market Capitalization: $8 Billion
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 12, Oppenheimer analyst Param Singh initiated coverage of the stock with a Perform rating and no price target. The advisory sees Rubrik benefiting from the rising importance of data, which is driving backup storage TAM, growing data security breaches and ransomware attacks that align with the company’s security-first approach, and the industry shift to as-a-service platforms. However, the advisory expects management to continue with its heavy investment and expects Rubrik to remain at an operating loss for the next three years.
14. Okta, Inc. (NASDAQ:OKTA)
Market Capitalization: $13 Billion
Okta, Inc. (NASDAQ:OKTA) owns and runs an identity management platform. One of the premier products of the firm is Identity Threat Protection, powered by Okta AI. Per the company, Okta AI is a mixture of machine learning and GenAI algorithms. The company is also working on a governance analyzer that suggests identity solutions for a company based on their policy setups. Last week, Morgan Stanley lowered the price target on Okta to $92 from $100 and kept an Equal Weight rating on the shares after Okta announced that it discovered a vulnerability where organizations without multi-factor authentication and usernames with 52 characters or more could allow its users to log in without a password being entered. The online and press reaction has not been favorable given multiple security incidents from Okta in the last couple of years, but the advisory thinks the impact of this vulnerability is likely minimal.
13. Super Micro Computer, Inc. (NASDAQ:SMCI)
Market Capitalization: $14 Billion
Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high performance server and storage solutions based on modular and open architecture. On November 12, research firm Hazeltree named Super Micro Computer as the second most shorted stock in the Americas region in the month of October. Energy firm Chevron was named the first. The Hazeltree report indicated that Super Micro also had the highest institutional supply utilization of 42.78% – an indicator of how hot a security is in terms of the supply demand dynamic.
12. NXP Semiconductors N.V. (NASDAQ:NXPI)
Market Capitalization: $57 Billion
NXP Semiconductors N.V. (NASDAQ:NXPI) makes and sells various products related to semiconductors. NXP offers a comprehensive portfolio of microcontrollers and processors optimized for AI and machine learning applications in automotive, smart industrial and IoT industries. On November 11, Loop Capital initiated coverage of the stock with a Buy rating and $300 price target. Like other automotive-levered semiconductor companies/stocks, NXP has been a consensus short since the end of 2023, or once automotive tier-ones began bringing down days of inventory hold, the advisory told investors in a research note. NXP checks many of the boxes in automotive secular growth drivers, the advisory adds.
11. Dell Technologies Inc. (NYSE:DELL)
Market Capitalization: $95 Billion
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. On November 13, the company announced an array of updates for Dell NativeEdge, the edge operations software platform it markets, in order to help organizations deploy, scale, and use AI at the edge. The platform now supports multi-node high-availability clustering for NativeEdge Endpoints. The firm is also expanding an existing catalog of 55 pre-built Dell NativeEdge Blueprints for AI applications and frameworks deployment.
10. Intel Corporation (NASDAQ:INTC)
Market Capitalization: $110 Billion
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. On November 12, the company announced that it had lowered its stakes in three publicly traded companies, including semiconductor equipment firm Astera Labs. The other companies on the list include Joby Aviation and Senti Biosciences. The chipmaker is in the process of modernizing in line with other chip firms as it struggles to bring down costs while also maintaining the largest workforce in the chip sector. One of the suggestions on the table is a takeover of the company by a rival firm, but such a deal has been beset with regulatory concerns.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Market Capitalization: $185 Billion
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. On November 13, telecom firm Viettel announced the commercial launch of the Open RAN (O-RAN) 5G Network, featuring key equipment developed in-house with the help of QUALCOMM chips. This is the first O-RAN 5G network in the world. These networks improve on existing 5G technology in terms of speed, enabling seamless running of big data and artificial intelligence applications. Initially, Viettel is deploying the new tech over 300 sites across various Vietnamese provinces in early 2025.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Market Capitalization: $240 Billion
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. The stock has been one of the many chip stocks impacted by comments made by US House Speaker Mike Johnson that the Republican administration, set to take charge of the US government in the coming weeks, may try to repeal the CHIPS Act. Johnson made the comments while answering a question by a reporter. However, he later clarified that the new administration only sought to further streamline the bill.
7. ASML Holding N.V. (NASDAQ:ASML)
Market Capitalization: $268 Billion
ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. The company is planning to hold a biannual Investor Day on November 14. The event has been overshadowed by the threat of US restrictions on chip business with China, per a report by news agency Reuters. The Asian country has been the largest market for the company over the past two years, representing nearly 40% of group sales. The company has guided to 44 billion – 60 billion euros in sales for 2030, implying a growth rate of 8-14%, from a forecast 27.5 billion euros this year.
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Market Capitalization: $851 Billion
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. On November 13, JW Kuo, the minister of economic affairs in Taiwan, said that Taiwan had regulations in place to protect its own technologies. He also added that TSM could not produce 2-nanometer chips overseas currently, although plans were in place to make 2-nanometer chips in the future. However, he clarified that the core technology would stay in Taiwan. The comments appeared on tech website Tech Spot, which cited the Taipei Times as a source. There are concerns in the chip industry that Donald Trump, who is set to become the next US president, would pressure TSM to move advanced chip tech to the United States.
5. Meta Platforms, Inc. (NASDAQ:META)
Market Capitalization: $1.5 Trillion
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family. On November 12, financial news website Barron’s reported that activist hedge fund ValueAct Capital had taken a $1 billion position in the tech giant. According to the report, the position was a validation of the artificial intelligence strategy of the company. Meta Platforms has integrated AI into tools it offers to customers seeking to place advertisements on social media platforms owned by the company. These have helped the firm overtake rival Alphabet in digital ad growth over the past year.
4. Amazon.com, Inc. (NASDAQ:AMZN)
Market Capitalization: $2.1 Trillion
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. On November 13, news publication Business Insider reported that the tech titan was in talks with IBM to provide the latter access to powerful NVIDIA GPUs through Amazon Web Services, the cloud arm of Amazon. According to the report, if the deal is signed, IBM would use EC2 servers at AWS that come equipped with NVIDIA artificial intelligence chips. One source has told Business Insider that the IBM deal is for AI training and the talks are still ongoing in this regard.
3. Alphabet Inc. (NASDAQ:GOOG)
Market Capitalization: $2.2 Trillion
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. On November 13, the company announced in a blog post that it would be running a test in which it would not show results on its News, Search, and Discover platforms from EU-based news publishers. The post comes merely hours after EU regulators and publishers asked the company for additional data about the effect of news content in Search. Google has been battling traffic and AI-related disputes with news platforms over the past few months as AI models capture public attention.
2. Microsoft Corporation (NASDAQ:MSFT)
Market Capitalization: $3.1 Trillion
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. On November 12, Citi analyst Tyler Radke penned an investor note on the tech giant, noting that the company was working on boosting cost efficiencies in various businesses and re-accelerating the all-important Azure unit. Radke said that Microsoft showed confidence that Azure can accelerate in the second-half of the fiscal year. The analyst underlined that the AI demand was also driving halo effects as customers came for AI services but stayed for the platform – core Azure – that tended to be higher margin.
1. NVIDIA Corporation (NASDAQ:NVDA)
Market Capitalization: $3.6 Trillion
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. Jensen Huang, the CEO of the firm, was the keynote speaker at the recent Softbank AI Summit in Japan. During his address, Huang announced that the telecom unit of Softbank would be the first AI system in the world to receive the famous NVIDIA Blackwell chips to build the most powerful supercomputer in the Asian country. The two companies estimate that telco operators can earn about $5 in AI inference revenue from every $1 of CapEx invested in new AI-RAN infrastructure piloted by Softbank.
While we acknowledge the potential of NVDA 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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