On October 31, CNBC’s Steve Kovach joined ‘Money Movers’ to discuss big tech’s AI spending. Kovach observes that, apart from ChatGPT, no other AI product has achieved a breakthrough, despite ongoing efforts from many companies. Currently, most of the money is going to chip makers and cloud businesses, and there is no evidence of meaningful sales or engagement around AI products that people may want to use every day. Kovach’s observation implies that tech giants continue to invest heavily in foundational AI advancements and that high-engagement consumer products may still have time to launch. Additionally, many of these big tech companies have reported that they will continue to step up their already high spending on AI infrastructure.
READ ALSO: 15 AI News You Should Not Miss and Top 10 Trending AI Stocks in Q4.
For many like Kovach, OpenAI represents the leading and most mainstream AI breakthrough, with each of its moves highly anticipated. After all, the company is widely credited for bringing artificial intelligence tools into widespread use. In its latest breakthrough, OpenAI has launched “ChatGPT Search”, the company’s new search engine, positioning the high-powered AI startup to compete with search engines like Bing, Perplexity, and Google. This search feature within ChatGPT provides up-to-the-minute sports scores, stock quotes, weather, and more, driven by real-time web searches and partnerships with news and data providers.
“I find it to be a way faster/easier way to get the information I’m looking for. I think we’ll see this especially for queries that require more complex research. I also look forward to a future where a search query can dynamically render a custom web page in response!”
– Sam Altman said in a Reddit AMA on Thursday.
In a notable advancement towards more accessible AI products and services, SpotAI, a leader in AI camera systems, announced the launch of its Video AI Agents. The announcement strives to bring agentic AI capabilities from the digital to the physical world. These agents assist organizations in identifying and resolving incidents, offering measurable ROI in sectors such as manufacturing, education, retail, and automotive services; all without the need for human intervention.
In a similar development within the AI landscape, OSARO, a global leader in machine-learning-enabled robotics for high-volume fulfillment centers, has launched OSARO AutoModel. The OSARO AutoModel allows robots to automatically learn and adapt to new items, processes, and workflows with zero downtime; unlike previous robots that need updating for new SKUs.
Continuing the trend of leveraging artificial intelligence in our increasingly AI-driven world, Bolster, a leader in multi-channel phishing protection, announced on Thursday its newest feature called Bolster AI Security for Email. The Bolster AI Security for Email automates the analysis and mitigation of cyber threats reported through customer abuse mailboxes. The new feature combines crowdsourced customer reports and AI-driven automation to protect brands from fraud schemes in real-time.
A scientist at a computer station, surrounded by a neural network of artificial intelligence code.
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For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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15. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 18
C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company. The company is involved in building and operating enterprise-scale AI applications and accelerating digital transformation.
On Thursday, October 31, C3.ai, Inc. (NYSE:AI) announced the issuance of a new U.S. patent (US 12,111,859) for its advanced AI agent generative AI technology. The patent outlines a system that coordinates multiple AI agents to orchestrate actions using multimodal foundation models within the C3 Generative AI architecture, reinforcing the company’s commitment to innovation and leadership in generative AI. The C3 Generative AI architecture orchestrates AI agents, tools, and smaller machine-learning models to retrieve information across both structured and unstructured data, reason on information, take actions, produce natural language summaries, and identify actionable insights.
“This award marks a significant milestone in our mission to lead the industry in state-of-the-art Enterprise AI solutions. This innovation fundamentally changes the nature of the human computer interface in Enterprise AI applications across all domains: supply chain optimization, predictive maintenance, process optimization, defense, intelligence, AML detection, CRM, you name it”.
-Thomas M. Siebel, primary inventor of this patent, and CEO, C3 AI.
14. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 18
Lumen Technologies, Inc. (NYSE:LUMN) is a global communications services provider connecting people, data, and applications. The telecom company has been benefitting from soaring AI demand as it provides the fiber networks necessary for AI data processing as well as other digital services that are helping it ride the AI growth wave.
On October 30, Lumen Technologies, Inc. (NYSE:LUMN) announced that it has entered an agreement with Amazon Web Services (AWS) “to strengthen data center connectivity and optimize network delivery of cloud technologies for hundreds of millions of customers across the United States”. The company will be using AWS technologies, including Artificial Intelligence (AI), Machine Learning (ML), and security for modernizing its applications and driving innovation in its portfolio of communications, network services, security, and voice products. Moreover, Lumen will also be offering fiber connectivity to AWS data centers, enabling enterprise customers to develop and deploy highly scalable AI applications across AWS regions and AWS Local Zones.
13. Zebra Technologies Corporation (NASDAQ:ZBRA)
Number of Hedge Fund Holders: 35
Zebra Technologies Corporation (NASDAQ:ZBRA) is a digital solutions provider offering enterprise asset intelligence solutions in the automatic identification and data capture solutions industry worldwide. The company leverages artificial intelligence to power Zebra’s portfolio of hardware, software, services, and solutions to digitize and automate workflows across different industries.
On October 29, Investors Business Daily reported that Zebra Technologies Corporation (NASDAQ:ZBRA) is adding artificial intelligence technologies to its products to add value for its customers. Data collected by Zebra’s inventory and asset monitoring technology can be used in AI models to generate useful insights, Chief Financial Officer Nathan Winters stated. Also, the company is developing “an AI companion or a digital assistant for frontline workers” for those who use its handheld computers, he said. Those devices will help workers with sales, merchandising, operating procedures, and other things, he noted.
12. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) is a multinational semiconductor and software design company that designs microprocessors, physical Internet protocol (IP), and related technology and software, and sells development tools. Arm Holdings is an AI stock because its advanced semiconductor designs power many AI applications, from edge devices to data centers, driving the AI revolution.
On Thursday, October 31, Investment firm Bernstein downgraded Arm Holdings plc (NASDAQ:ARM) to “Underperform” from Market Perform and kept a price target of $100. This downgrade stems from worries about the company’s revenue prospects outside of artificial intelligence. Analyst Sara Russo said most things artificial-intelligence related are “holding up fine”, supporting royalty rates for Arm’s v9 architecture in both mobile and data centers. However, anything beyond is still a concern.
“While the story has remained relatively unchanged in an overall gloomy semiconductor environment (beyond AI), Arm’s share price has rallied nearly 40% since our upgrade less than a quarter ago. The long term equity story remains very appealing: strong v9 penetration, share gain in datacenter and incremental CSS benefits–but at what price? Despite using a generous and merited 45x FY26 P/E, we struggle to find upside.”
– Analyst Sara Russo wrote in a note to clients
11. Reddit Inc (NYSE:RDDT)
Number of Hedge Fund Holders: 39
Reddit Inc (NYSE:RDDT) is an American social news aggregation, content rating, and forum social network. The company has embraced artificial intelligence by licensing its data to train AI models, securing data licensing agreements totaling over $200 million over the coming years.
On October 30, Bernstein raised the firm’s price target on Reddit (RDDT) to $85 from $65 and kept an “Underperform” rating on the shares. The firm’s bearish outlook comes from Reddit’s expensive valuation. However, the analyst also points out the company has the potential to be an artificial intelligence beneficiary. The analyst describes Reddit as a real Dr. Jekyll and Mr. Hyde story.
“The clouds around Reddit have quickly defogged into a real Dr. Jekyll and Mr. Hyde story. Pre-IPO Reddit felt stuck unable to grow users or monetize the platform or viewed as real business — this is Mr. Hyde. But post-IPO Reddit looks like a company that’s suddenly an AI winner, growing ad revenues at an unprecedented clip, has a user growth cheat-code in translation + Google, and hitting years-long profitability targets in months — this is Dr. Jekyll. And right now, Dr. Jekyll is in charge”.
– Analyst Mark Shmulik
10. Juniper Networks, Inc. (NYSE:JNPR)
Number of Hedge Fund Holders: 45
Juniper Networks, Inc. (NYSE:JNPR) is considered the industry’s first AI-native networking platform. The company designs, develops, and sells network products and services worldwide.
On October 30, Juniper Networks, Inc. (NYSE:JNPR) announced that Thai Airways has modernized the network infrastructure of its headquarters by deploying Juniper’s AI-Native Networking Platform, incorporating Wi-Fi 6E technology via Juniper AP45 access points and EX Series Ethernet switches. Mist AI, a key part of Juniper’s AI-Native Networking Platform, is at the heart of the transformation, leveraging purpose-built AIOps trained on nearly a decade of insights and data science development. This helps deliver rich insights into user experiences and proactive fault resolutions that can reduce network-related trouble tickets by up to 90%.
“We are honored to support Thai Airways as it embarks on its digital transformation journey toward growth. With Juniper’s AI-Native Networking Platform, we are confident that Thai Airways will continue delivering the best possible and future-proof networking user experiences across all its internal and external stakeholders. Alongside Thai Airways, we look forward to continuously providing the networking connectivity enabling international travel connectivity, in support of their strong growth trajectory across the ever-evolving aviation landscape.”
– Perry Sui, Area Vice President, ASEAN & Taiwan, Juniper Networks
9. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 52
NXP Semiconductors N.V. (NASDAQ:NXPI) is a Dutch semiconductor manufacturing and design company. Their product portfolio includes microcontrollers; application processors, including i.MX application processors, and i.MX 8 and 9 family of applications processors; communication processors; and more.
On October 29, NXP Semiconductors N.V. (NASDAQ:NXPI) announced that it has added two new tools to its eIQ AI and machine learning development software. The two new tools, the eIQ Time Series Studio, and the GenAI Flow, simplify AI deployment and use across a full spectrum of edge processors. The eIQ Time Series Studio “features an automated machine learning workflow that streamlines the development and deployment of time series-based machine learning models across MCU-class devices”, while the GenAI Flow offers the building blocks for Large Language Models (LLMs) powering generative AI solutions.
“AI is the key to a world that anticipates and automates based on user wants and needs, but it must be developed in a way that is practical for edge deployment. With ready-to-use tools suitable for both small AI models on MCUs like the MCX portfolio, crossover MCUs like the i.MX RT700 as well as larger, generative AI models running on more powerful devices like the i.MX 95 applications processor, NXP is delivering an unparalleled breadth of options for developers across the full spectrum of AI models and AI-enabled edge processors. NXP is making edge AI truly practical for developers across a wide range of markets.”
-Charles Dachs, Senior Vice President and General Manager, NXP Semiconductors.
8. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 54
Twilio Inc. (NYSE:TWLO) is an American cloud communications company offering customer engagement platform solutions in the United States and internationally. The company leverages AI with products like Voice Intelligence and Verify, along with integrations with OpenAI.
On October 30, 2024, Twilio Inc. (NYSE:TWLO) announced its third quarter results. The company delivered impressive Q3 results, surpassing guidance with $1.134 billion in revenue, which marks a 10% year-over-year increase. The figures are largely driven by customer growth, with the company reporting over 320,000 active customer accounts at the end of the quarter, up from 306,000. It is also well-positioned to leverage AI and machine learning to enhance its platform’s differentiation and improve customer engagement.
“Twilio continues to operate with financial discipline, operating rigor, and focused innovation, which has enabled us to deliver a strong third quarter of double-digit revenue growth and solid free cash flow generation. Twilio is uniquely positioned to bring the power of communications, plus contextual data, plus AI together to drive better customer experiences. Our continued product innovation and the outsized outcomes that we are delivering for customers illustrates our ability to be a winner in the age of AI.”
-Khozema Shipchandler, CEO of Twilio.
7. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 55
KLA Corporation (NASDAQ:KLAC) is a semiconductor manufacturing corporation engaged in the design, manufacture, and marketing of process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide.
On Thursday, October 31, Oppenheimer upgraded KLA Corporation to “Outperform” from “Perform” and raised its price target to $850 per share from $750 per share. The rating upgrade follows the company’s strong Q1 2025 results and robust outlook. With shares down 20% from their peak and investor sentiment around ASML swinging sharply, now is an opportune time to buy, as per the analyst. The firm also sees a favorable 6-9 month window opening as government intervention activity is closing for this year, letting investors refocus on the robust AI growth theme.
6. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 93
Oracle Corporation (NYSE:ORCL) is one of the world’s largest database management companies offering products and services that address enterprise information technology environments globally. The company boasts one of the world’s first autonomous databases, as well as the industry’s broadest and deepest suite of AI-powered cloud applications.
On October 29, Oracle Corporation (NYSE:ORCL) previewed its next-generation electronic health record (EHR) at the Oracle Health Summit in Tennessee. The brand new EHR features fresh cloud and artificial intelligence capabilities and is the company’s most significant healthcare product update since it acquired the medical records giant Cerner for $28 billion back in 2022. The new EHR will help doctors pull up patient information with the help of their voice, helping them spend less time searching for information and more time helping the patients. This new offering is also highly likely to help Oracle strengthen its position in the competitive EHR market.
“One of today’s most important and widely used healthcare technologies, the EHR, has not lived up to its promise. Most EHRs were built in the 90s and are ill-equipped to meet the complex security requirements and clinical needs of today’s healthcare networks, practitioners, and patients. That is why we are completely reinventing the EHR. Oracle Health’s next-generation EHR is not just a scribe or an assistant. It’s the doctor’s best resident, the administrator’s most productive analyst, and the payer’s most efficient partner in reviewing and authorizing treatment and payment.”
– Seema Verma, executive vice president and general manager, Oracle Health and Life Sciences.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) is an American multinational corporation known for designing and developing computer processors and graphics technologies. By incorporating technology across CPUs, GPUs, and NPUs, it strives to create a strong ecosystem that supports the development of powerful AI applications.
On October 30, AMD Staff published a whitepaper claiming that its Ryzen AI 9 HX 375 processor can outshine Intel Core Ultra 7 258v processor in throughput and latency for AI workloads. The company claims that Ryzen™ AI 9 HX 375 processor achieves up to 27% faster performance than its competition when looking at tokens per second, which is a key metric for LLM performance. Another benchmark proving AMD’s processor superiority is its “time to first token”. The time to first token measures the latency between the moment you submit a prompt and the time it takes for the model to start generating tokens. As per the company, the AMD Ryzen™ AI HX 375 processor is up to 3.5x faster than a comparable competitor in larger language models.
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 165
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate and the parent holding company of Google. The company is a strong player in the AI sector, innovating at “every layer of the AI stack, from chips to agents and beyond”.
Alphabet Inc. (NASDAQ:GOOG) announced its third-quarter results on October 29, 2024. The company beat analysts’ estimates on the top and bottom lines, driven by strong growth in its cloud business. In particular, Google CEO Sundar Pichai emphasized the growth of the cloud unit, noting that the company’s AI portfolio is enticing new customers and leading to larger deals. Cloud revenue for the quarter was $11.4 billion, up 35% from the same period last year, surpassing expectations. The excitement and potential around artificial intelligence means Google is all in on the AI craze, and it’s certainly helping its productivity, too. In the earnings call, Pichai noted how more than a quarter of new code created at Google is generated by AI. Using AI for coding has been boosting productivity and efficiency for the company.
“More than a quarter of all new code at Google is generated by AI, then reviewed and accepted by engineers”.
-CEO Sundar Pichai said on the company’s third quarter 2024 earnings call.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is an American technology company known for its consumer electronics, software, and services. Apple is considered a very important AI stock, having integrated artificial intelligence and machine learning in every aspect of its ecosystem.
On October 30, Apple Inc. (NASDAQ:AAPL) announced the new MacBook Pro, powered by the M4 family of chips — M4, M4 Pro, and M4 Max. Built for Apple Intelligence (Apple’s personal intelligent system), the new MacBook Pro is designed to transform how users work, communicate, and express themselves, all while protecting their privacy. The 14-inch MacBook Pro is available in space black and silver finishes, and includes blazing-fast performance of M4 and three Thunderbolt 4 ports, starting with 16GB of memory, for $1,599. Meanwhile, the 14- and 16-inch models with M4 Pro and M4 Max offer Thunderbolt 5 for faster transfer speeds and advanced connectivity. The new MacBook Pro is now available for preorder, with availability beginning November 8.
“MacBook Pro is an incredibly powerful tool that millions of people use to do their life’s best work, and today we’re making it even better. With the powerful M4 family of chips, and packed with pro features like Thunderbolt 5, an advanced 12MP Center Stage camera, an all-new nano-texture display option, and Apple Intelligence, the new MacBook Pro continues to be, by far, the world’s best pro laptop.”
-John Ternus, Apple’s senior vice president of Hardware Engineering.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META) is an American multinational technology conglomerate offering social networking, advertising, and business insight solutions. The company is a leader in AI amongst social media stocks, with strong AI and metaverse ambitions as it tries to build diverse revenue streams.
Meta Platforms, Inc. (NASDAQ:META) announced its fiscal third-quarter earnings after the closing bell on October 30. The company beat expectations on the top and bottom lines. It reported a revenue of $40.59 billion, while analysts’ estimates were $40.29 billion. Moreover, net income was $15.69 billion, an increase of 35%. The company’s strong quarter was driven by advancement in AI across its products and strong momentum with Meta AI, Llama adoption, and AI-powered glasses. Despite the big earnings beat, Meta shares sank in after-hours trading due to the company’s capital expenditure, up 36% to $9.2 billion. Meta CEO Mark Zuckerberg further warned of a “significant acceleration” in artificial-intelligence-related infrastructure expenses next year, sending mixed signals to investors about whether the company’s digital ad sales from its social media business would continue to cover the cost of its massive AI buildout. Dan Ives, Wedbush managing director, on CNBC’s Closing Bell, notes that Meta stock dropping is actually the “wrong reaction” here.
“The formula around building out the infrastructure is maybe not what investors want to hear in the near term, that we’re growing that. But, I just think that the opportunities here are really big, we’re going to continue investing significantly in this and I’m proud of the teams that are doing great work to stand up a large amount of capacity so that way we can deliver world-class models and world-class products.”
-Mark Zuckerberg
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is an American multinational technology company engaged in the development and selling of software, services, and hardware. It is one of Wall Street’s favorite AI stocks, known for investing heavily in new AI initiatives, its significant investment in OpenAI, and its expanding cloud computing infrastructure.
Microsoft Corporation (NASDAQ:MSFT) reported its fiscal first-quarter earnings after the bell on October 30, 2024. The company beat top and bottom lines on the back of its cloud business and Office software, with AI leading to gains in its Azure cloud platform. Revenue was $65.6 billion, an increase of 16% and beating analysts’ expectations of $64.57 billion, while net income rose 11% to $24.7 billion. The company’s cloud service sales came at $38.9 billion versus expectations of $38.1 billion. Meanwhile, its Intelligent Cloud segment, including its Azure business, raked in $24.1 billion in the quarter, up 20% year over year. However, guidance for the current quarter projects revenue between $68.1 billion and $69.1 billion, suggesting 10.6% growth but falling short of analyst expectations of $69.83 billion. This is largely due to delays from outside suppliers in delivering data center infrastructure, hampering its ability to meet demand.
“AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process. We are expanding our opportunity and winning new customers as we help them apply our AI platforms and tools to drive new growth and operating leverage.”
– Satya Nadella, chairman and chief executive officer of Microsoft.
Overall, MSFT ranks first among the 15 AI News Investors Should Not Miss. While we acknowledge the potential of MSFT 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 MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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