Generative artificial intelligence has been gaining traction around the world. The latest country to embrace it is Japan. According to The Japan Times, private-sector businesses in the country have begun embracing related information technologies to enhance operational efficiency. GenAI search services, in particular, are proving useful for searching corporate databases.
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The news states how Lion, a leading Japanese consumer goods company, has built a generative AI-powered search system that allows its researchers to search through research reports and conference materials stored in the company’s database efficiently.
“To drive innovation, we need a system that allows researchers to have quick access to technical knowledge when they need it”.
– Shintaro Yamaoka, manager of the digital strategy department
Yamaoka revealed that the time required to locate a desired document has been reduced to an average of one-fifth of that with conventional search systems. The company further states that GenAI is proving beneficial not only for recruits and young employees but also for those transitioning to new workplaces, allowing them to “systematically acquire knowledge in unfamiliar fields”. Even though GenAI comes with its fair share of challenges such as hallucinations and copyright concerns, it also stands to benefit the corporate world in the long run.
In other news, one popular AI chatbot is seemingly facing a technical glitch and preventing it from saying one name in particular: David Mayer. If there is one name in the AI realm that everyone knows about, it’s ChatGPT. The artificial intelligence chatbot has been trained on large amounts of data to create content, including voices, music, pictures, and videos. However, it was recently unearthed by a Reddit user that the AI chatbot is unable to say David Mayer.
According to AI expert Justine Moore, a plausible scenario is that someone named David Mayer went out of his way to remove his presence from the internet. For example, strict privacy laws in the European Union allow citizens to file “right to be forgotten” requests.
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. Nebius Group N.V. (NASDAQ:NBIS)
Nebius Group N.V. (NASDAQ:NBIS) is an AI infrastructure firm that builds full-stack infrastructure to enable the growth of the global AI industry, including large-scale GPU clusters, cloud platforms, and tools and services for developers. On December 2nd, Nebius announced that it was raising $700 million in a private placement from investors including Nvidia (NVDA.O), Accel, and some accounts managed by Orbis Investments, as reported by Reuters. Nebius is said to be driving the development of the foundational infrastructure for artificial intelligence. Founded by Arkady Volozh, former founder and CEO of Yandex, Volozh said that the $700 million financing would allow the company to gain additional firepower for building clusters of graphics processing units (GPUs), cloud platforms, and other tools for AI developers faster and on a larger scale.
14. 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 December 2nd, the company announced that it is expected to participate in two investor conferences in December. It will be showcasing its voice AI technology at two prestigious tech conferences. Nitesh Sharan, SoundHound CFO, will be participating at the UBS Global Technology and AI Conference in Scottsdale, Arizona on December 4, while Keyvan Mohajer, SoundHound CEO, and Nitesh Sharan, SoundHound CFO, will participate at the Barclays Annual Global Technology Conference in San Francisco on December 12.
13. FiscalNote Holdings, Inc. (NYSE:NOTE)
Number of Hedge Fund Holders: 13
FiscalNote Holdings, Inc. (NYSE:NOTE) is a leading AI-driven enterprise SaaS technology provider of global policy and market intelligence solutions. On December 2nd, the company announced new customer agreements with all three branches of the federal government. The agreements demonstrate how FiscalNote’s AI-powered suite of products and services, as well as their expert advisory and news analysis, play an imperative role for key government decision-makers who use them for monitoring, tracking, and analysis of federal policymaking and regulatory activity.
“Our broad and diverse base of public sector customers across all branches of the U.S. Federal government continues to rely on FiscalNote to be their trusted and essential partner. By leveraging our AI-powered suite of products and services, as well as our expert advisory and news analysis, U.S. government decision makers – including lawmakers and their legislative staff, agency and department officials, regulators, and the judicial branch – are positioned to better understand and successfully navigate the complex and evolving policymaking domain to advance their policy objectives and become even more productive and efficient. FiscalNote’s U.S. public sector customer base continues to be strong and diversified, and we take great pride in being a critical component in making government more effective, more responsive, and better informed.”
-Josh Resnik, President and Chief Operating Officer, FiscalNote.
12. TaskUs, Inc. (NASDAQ:TASK)
Number of Hedge Fund Holders: 17
TaskUs, Inc. (NASDAQ:TASK) is an AI and robotics stock and a leading provider of outsourced digital services and next-generation customer experience to the world’s most innovative companies. On December 2nd, TaskUs, Inc. (NASDAQ:TASK) and Red Points, a premium provider of AI-driven brand protection solutions, announced that they are forming a partnership that will allow them to combat fraud and intellectual property violations. The partnership will offer clients an end-to-end digital protection system, combining artificial intelligence (AI) and human talent to defend users against counterfeit items, brand impersonations, fake accounts, and irregular credentials. Such activities tend to damage a brand’s reputation as well as hamper trust and decrease customer loyalty, highlighting the need for brand protection technology to safeguard organizations.
“This partnership and digital protection service comes at the perfect time as counterfeit and IP violations are surging. We believe our extensive knowledge of the marketplace and solution pair perfectly with Red Points’ industry-leading brand protection technology. This partnership further underscores our continued commitment to helping our clients achieve business success while maintaining brand integrity.”
– Phil Tomlinson, SVP, Global Offerings at TaskUs.
11. RingCentral, Inc. (NYSE:RNG)
Number of Hedge Fund Holders: 32
RingCentral, Inc. (NYSE:RNG) is a leading provider of AI-powered trusted business communications for companies of all sizes. On December 2nd, the company announced improvements to its Zendesk integration with the launch of a solution called Zendesk Talk Partner Edition for RingEX™. The solution will integrate RingEX’s world-class voice capabilities and rich call data into the Zendesk customer support platform, enabling users to achieve streamlined workflows and actionable insights that personalize customer interactions and offer an elevated support experience. The solution, designed for departmental use, comes with new features such as Voice Comment and Standard Call Object for a cleaner, more structured view of real-time call information, such as call duration and call recordings. Customers will be using AI-driven insights to switch between voice, chat, email, and social media channels without leaving the Zendesk interface.
“RingCentral’s partnership and ongoing innovation with Zendesk propel our goal for delivering immersive agent experiences within the applications they use every day. With the launch of Zendesk Talk Partner Edition for RingEX, our joint customers benefit from enhanced tools for call handling and data management, which ultimately helps them provide a more seamless and satisfying experience for their customers.”
– Joe Fahrner, VP Small Business Growth, RingCentral.
10. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 37
SentinelOne, Inc. (NYSE:S) is one of the leading artificial intelligence-powered cybersecurity providers. On December 2nd, Baird raised the firm’s price target on SentinelOne, Inc. (NYSE:S) to $32 from $30 and kept an “Outperform” rating on the shares. The firm expects accelerated net new business growth in the second half of the fiscal year. The optimism comes from strong feedback from channels and partners, and a robust pipeline momentum in its non-endpoint solutions. The company’s non-endpoint solutions use AI to secure cloud, IoT, and other advanced areas, expanding its cybersecurity capabilities. Moreover, the firm has also engaged in partnerships that rely on AI, including those with Lenovo and managed security service providers (MSSPs), which are expected to drive growth, especially in the federal sector. The appointment of an experienced CFO and improving profitability metrics further drive the rating.
9. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 44
Cloudflare, Inc. (NYSE:NET) is a cloud services provider that powers AI workloads through its Workers AI platform, enabling developers to deploy machine learning models at the network edge with low latency. On December 2nd, Morgan Stanley upgraded Cloudflare, Inc. (NYSE:NET) from Equal-Weight to “Overweight” and raised its price target from $92 to $130. The firm sees idiosyncratic opportunities in companies with emerging product cycles, particularly those aligned with GenAI. Cloudflare, Inc. (NYSE:NET) is one company that has capabilities as a potential enabler of generative AI, particularly through its serverless platform Cloudflare Workers AI which puts it in a prime spot to capitalize on emerging trends in AI inference at the edge. The company stands in the limelight of the firm’s software coverage due to its large TAM (total addressable market), highly scalable network architecture, and emergence as a potential GenAI enabler as organizations looking to adopt and experiment with LLMs (large language models). It is well-positioned to gain a share in Security and AI/ML.
8. Okta, Inc. (NASDAQ:OKTA)
Number of Hedge Fund Holders: 47
Okta, Inc. (NASDAQ:OKTA) is a workplace cybersecurity company that leverages AI-driven features across its Customer Identity Cloud and Workplace Identity Cloud, enabling clients to take control of their digital presence. On December 2nd, Morgan Stanley upgraded Okta, Inc. (NASDAQ:OKTA) to “Overweight” from Equal Weight and raised the price target to $97 from $92. The firm said it is positive on long-term tailwinds in security. However, it is being more selective into 2025 due to factors such as a “stable but still tough” spending environment, a less favorable U.S. fiscal backdrop, and valuation premium versus broader technology. The firm has upgraded the company as it said that it believes the demand environment is stabilizing, competitive headwinds appear to be easing, and newer product cycles that align with the rising importance of GenAI in cybersecurity are also beginning to take hold.
7. Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 47
Elastic N.V. (NYSE:ESTC) is a search AI company offering cloud-based solutions that enable users to bring in all kinds of unstructured data and make it searchable. On December 2nd, the company announced the general availability of Elastic Cloud Serverless, the fastest method to start and scale security, observability, and search hassle-free. The Elastic Cloud Serverless is powered by a re-architectured Elasticsearch, built on an industry-first Search AI Lake optimized for real-time applications. The solution enables users to perform high-performance tasks such as AI-powered search, threat detection, and data retrieval.
“With our fully managed Elastic Cloud Serverless, we’re helping customers save more, scale fast, and search faster. By removing operational overhead, developers can rapidly build AI-powered search applications without concern for latency or scalability. Our Search AI Lake inherently supports dense vectors and features such as hybrid search, faceted search, and relevance ranking, which are especially vital for applications like GenAI and RAG”.
-Ken Exner, chief product officer at Elastic.
6. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 47
Fortinet, Inc. (NASDAQ:FTNT) is a cybersecurity company that provides enterprise-level next-generation firewalls and network security solutions and is leveraging artificial intelligence across its cybersecurity products. On December 2nd, it was announced that Fortinet, Inc. (NASDAQ:FTNT) has become the new Preferred Partner for NHL Vancouver Canucks Hockey Team for the 2024–2025 season. Canucks Sports & Entertainment (CSE) chose Fortinet’s AI-driven Security Fabric platform for reducing complexity and streamlining the identification and remediation of network and security issues across the group’s facilities.
“We are honored to continue our dedication to Canada by being named as the Preferred Partner for the Vancouver Canucks and to have our Security Fabric platform play a central role in protecting Canucks Sports & Entertainment’s diverse digital infrastructure. By leveraging Fortinet’s integrated solutions, the CSE team can focus on delivering exceptional experiences for their fans and athletes, knowing that their network and data are secure.”
-John Whittle, Chief Operating Officer at Fortinet
5. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity. On December 2nd, Morgan Stanley analyst Hamza Fodderwala said in an investor note that upcoming product cycles, particularly those aligned with GenAI, are expected to benefit companies such as Palo Alto given that a network security refresh is anticipated in the second half of 2025 or 2026. The firm is bullish on “premier consolidators” like Palo Alto despite near-term challenges in the cybersecurity industry, noting how the company is well-positioned due to its platform consolidation efforts and ability to address emerging threats. Moreover, it also noted a minor upside in the near term as the company is deliberately discounted to consolidate market share in the longer term.
4. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 70
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors for data centers. On December 2nd, Marvell Technology, Inc. (NASDAQ: MRVL) announced that it is expanding its strategic relationship with Amazon Web Services (AWS) through a five-year, multi-generational agreement. The agreement includes collaboration across multiple AWS products, use of AWS cloud infrastructure, and covers a broad range of data center semiconductors from Marvell. This includes the supply of custom AI products, optical digital signal processors (DSPs), active electrical cable (AEC) DSPs, PCIe retimers, data center interconnect (DCI) optical modules, and Ethernet switching silicon solutions. Through the partnership, AWS will expand its supplier relationship with Marvell for AI and data center connectivity products, while Marvell will leverage electronic design automation (EDA) in the cloud to deliver its silicon solutions.
“Strengthening our partnership with AWS marks a significant milestone for Marvell, deepening our long-standing relationship in cloud computing and data center semiconductors. EDA solutions will help Marvell rapidly and securely scale our silicon design process and capabilities to deliver industry-leading accelerated infrastructure with best-in-class time to market”.
-Matt Murphy, Chairman and CEO at Marvell
3. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in cloud-delivered endpoint and cloud workload protection products. On December 2nd, Morgan Stanley raised the firm’s price target on CrowdStrike to $390 from $355 and kept an “Overweight” rating on the shares. The firm views less upside in the broader cybersecurity landscape, citing platformization headwinds and valuations above historical average levels. The company’s Falcon platform exemplifies “platformization” by integrating multiple security functions into a single, cloud-native, AI-driven solution. Regardless of such headwinds, the firm remains confident in companies such as Crowdstrike over the longer term.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA), an automotive and clean energy company, is using artificial intelligence to drive advancements in autonomous driving, energy optimization, and manufacturing innovations. On December 2nd, Roth MKM upgraded Tesla to “Buy” from Neutral and raised the price target to $380 from $85. According to the firm, the company has abundant positive catalysts ahead that should fuel its revenue momentum as it transitions into next year.
“The stock is responding to the Trump bump. I don’t see very many negative catalysts if estimates are going to positive revisions. … Things are going to look a lot like they did 11, 12, 13 years ago, where they can literally invent their own milestones and knock them down”.
– Analyst Craig Irwin said on CNBC’s Squawk on the Street.
The company has been surging on factors such as an expanded enthusiast base and a potential market share recovery. Moreover, other factors that are helping the company’s growth include a more relaxed regulatory environment to accommodate its future robotaxi launch, its leadership in artificial intelligence through its self-driving software, and its commercial potential in robotics, particularly humanoid robots.
“Tesla is a large-cap company where the stock is behaving like an emerging growth company. Catalysts will play a primary role in valuation, in our view, as investors discount the longer-term served opportunity and projected earnings power”.
-Irwin
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that has gained popularity in the AI investment theme after the launch of Apple Intelligence, its AI-driven personal system. On December 2nd, Loop reiterated Apple Inc. (NASDAQ:AAPL) as a “Buy” and said that it believes Apple has the opportunity to become the go-to choice for users to use and access generative AI, similar to how the company became essential for social media with the iPhone and digital content with the iPod.
“Our thesis is that AAPL has an opportunity the next few years to solidify itself as consumer’s Gen AI ‘base camp’ of choice, just as it did for social media 15 years ago (with iPhone) and digital content consumption 20 years ago (with iPod)”.
While we acknowledge the potential of AAPL 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 AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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