One conversation gaining traction in Silicon Valley these days is how the advancement of Generative AI models is slowing down. Deirdre Bosa takes a look at the matter in CNBC’s TechCheck, revealing how rapid genAI advancements are now showing signs of deceleration. She notes how the quality of improvement in OpenAI’s upcoming model, Orion, is expected to be smaller than the leap from ChatGPT-3 to ChatGPT-4. This smaller advancement is largely due to a limited supply of training data, a key factor that could significantly affect how investors view AI companies.
READ ALSO: 15 AI News That Should Not Be Ignored and 10 Trending AI Stocks on Latest Analyst Ratings and News
Nevertheless, OpenAI CEO Sam Altman has boasted on X that ChatGPT is now the eighth-biggest website in the world by traffic. As of October, ChatGPT had 3.7 billion visits, versus Perplexity’s 91 million visits, and Google Gemini’s 292 million visits. Nevertheless, the plateau in technology advancement doesn’t necessarily mean a slowdown. For instance, Mark Zuckerberg proposes that there is a lot of opportunity to build consumer enterprise applications on top of the existing technology.
While that is certainly an option, Reuters has reported that artificial intelligence companies are seeking a new path to smarter AI due to the plateau. Ilya Sutskever, co-founder of AI labs Safe Superintelligence (SSI) and OpenAI, told Reuters recently that scaling up pre-training for AI models, which involves using large amounts of unlabeled data to learn language patterns, has reached a plateau.
“The 2010s were the age of scaling, now we’re back in the age of wonder and discovery once again. Everyone is looking for the next thing. Scaling the right thing matters more now than ever”.
-Sutskever
In light of this, researchers are now looking at a technique called “time testing compute” for improving models during the “inference” phase when such models are being used. The technique will allow the model to test different options instead of giving a single answer. The implications of the technique are far-fetched, having the potential to change the competitive landscape for AI hardware.
Recent AI Developments
Fortune predicts that GenAI funding is going to decelerate this year. However, it also believes that the industry’s recent breakthroughs are among the most profound technological advancements of our time. Regardless of the slowdown in GenAI models, artificial intelligence continues to be a breakthrough in many industries today.
In its first, an artificial intelligence company will be helping publishers rather than attempting to steal its work. While AI isn’t much appreciated in journalism because it seemingly uses journalist work to feed chatbot’s data demands and in turn diverts lesser traffic to the publisher, one startup, founded by Twitter engineers, believes that AI could be a valuable player in the media industry instead. Particle, an AI newsreader, will help readers better understand the news with the help of AI technology, offering more than just a summary.
In other developments, Perplexity, an AI-powered search engine, says it will begin experimenting with ads this week.
“Ad programs like this help us generate revenue to share with our publisher partners. Experience has taught us that subscriptions alone do not generate enough revenue to create a sustainable revenue-sharing program. Advertising is the best way to ensure a steady and scalable revenue stream.”
– Perplexity wrote in a post on its blog.
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. Verint Systems Inc. (NASDAQ:VRNT)
Market Capitalization: $1.55 billion
Verint Systems Inc. (NASDAQ:VRNT) is a technology company that provides customer engagement solutions worldwide. Having launched its AI business software platform in 2023, the company focuses on AI-powered analytics and customer engagement solutions.
On November 11, Verint Systems Inc. (NASDAQ:VRNT) announced that a top telecommunications company raked in $10.5 million in annual savings by leveraging the Verint Intelligent Virtual Assistant (IVA) to power their contact center telephony self-service. Each year, the said telecommunications company receives over seven million calls on topics such as billing, payment, and tech support. The use of Verint AI-powered IVA allowed it to handle half of these calls without live agents, including 80% of billing-related calls. In total, Verint’s solution enables the company to contain 3.5 million calls, avoiding the need to transfer to live agents and helping save $10.5 million annually.
“Verint IVA is built on industry-leading conversational AI that trains on an organization’s unique engagement data. This means the Verint AI-powered bots continuously improve and provide consumers with relevant, accurate responses, even within environments of higher conversational complexity or specificity to the business. With Verint’s leadership in AI-powered self-service bots, organizations are reporting strong AI business outcomes after replacing their legacy telephony-driven IVR systems.”
– Verint’s Heather Richards, vice president, Go-to-Market Strategy.
14. SoundHound AI (NASDAQ:SOUN)
Market Capitalization: $2.71 billion
SoundHound AI (NASDAQ:SOUN) is a voice artificial intelligence platform offering voice AI solutions to businesses. The company is emerging as a leader in conversational AI with more than 200 enterprise brands employing its AI agents across a growing number of verticals.
SoundHound AI (NASDAQ:SOUN) reported its third-quarter financial results on November 12, 2024. The company reported a revenue of $25.1 million, beating the consensus estimate of $23.02 million. It reported an adjusted loss of six cents per share, outperforming analyst estimates of a loss of seven cents per share. According to CEO and Co-Founder, Keyvan Mohajer, this quarter has been the most successful for the company as it takes on and expands into “important new verticals” such as healthcare, finance, and insurance. This growth is further exemplified through its strategic acquisition of Amelia, a global leader in enterprise AI agent software. Conversational artificial intelligence has been leading the company’s scale and market enthusiasm, allowing it to capitalize on emerging opportunities across industries. The company raised its full-year revenue guidance for the upcoming year, now projecting between $155 million and $175 million, up from the previous estimate of $150 million.
“We believe that voice is the ‘killer app’ for applied generative AI. Thanks to our best-in-class technology, mastery of complex vertical integrations, and proprietary AI software, SoundHound is ideally positioned to capitalize on this huge and growing opportunity.”
Keyvan Mohajer, CEO and Co-Founder, SoundHound AI
13. Bloom Energy Corporation (NYSE:BE)
Market Capitalization: $3.08 billion
Bloom Energy Corporation (NYSE:BE) is engaged in the design, manufacture, selling, and installation of solid-oxide fuel cell systems for on-site power generation. It is an AI stock given its potential to power AI data centers.
On November 12, Susquehanna raised the firm’s price target on Bloom Energy Corporation (NYSE:BE) to $16 from $13, maintaining its positive stance. According to the firm, Bloom has been engaging with data center customers for large-scale orders, but it has yet to sign a meaningful deal. Moreover, the company maintained its FY revenue and GM guidance, suggesting a boost in deliveries and margins in the fourth quarter. Management is confident that the company will hit these goals.
12. SentinelOne, Inc. (NYSE:S)
Market Capitalization: $8.62 billion
SentinelOne, Inc. (NYSE:S) is a leading American AI-powered cybersecurity provider that offers top-tier AI-powered security solutions to its clients. The company’s most sophisticated AI-driven platform, Purple AI, has exceeded expectations and played a significant role in the company’s strong Q2 performance, months after its official launch.
On November 12, Deutsche Bank upgraded SentinelOne, Inc. (NYSE:S) to “Buy” from Hold and raised the price target to $32 from $25 due to its strong positioning.
“We are upgrading shares of SentinelOne to Buy from Hold as we believe the company is not only benefitting from positive organic momentum, but also some disruption within the endpoint market post July 19”.
– Deutsche Bank
While the analyst call isn’t reflective of earnings results, it does reflect upon recent conversations and feedback in the field. After the Windows outage in July, channel conversations have “definitely uptick”, and the company’s platform and technology story “is only getting better”, the analyst states in a research note. Finally, the firm sees a path for SentinelOne, Inc. (NYSE:S) to capitalize on its platform strengths centered on AI-powered technology and high-growth sub-segments.
11. Twilio Inc. (NYSE:TWLO)
Market Capitalization: $14.8 billion
Twilio Inc. (NYSE:TWLO) is a leading cloud communications platform-as-a-service (CPaaS) company. The company has been integrating artificial intelligence into its platform since last year and has also introduced several new features that leverage AI to help clients gain more business from customers.
On November 12, Wells Fargo analyst Michael Turrin upgraded Twilio Inc. (NYSE:TWLO) to “Overweight” from Equal Weight and lifted his price target by $40, to $120 from $80. Turrin’s rating upgrade stems from his belief that software vendors are going to be leading the next phase of AI development. According to him, artificial agents will drive increased communications volumes for many years, helping drive sustained growth for Twilio Inc. (NYSE:TWLO), which also provides AI customer engagement services. Pointing to the company’s integration with OpenAI’s Realtime API that allows developers to build low latency speech-to-speech AI agents into applications, Turrin believes that Twilio can serve as a “pick-and-shovel” play for the next wave of AI-native front office and communications-powered genAI applications.
“A new build cycle is here; we expect the future favors the builders … This new set of AI developments is kicking off a new ‘build cycle’ of software development, with most recent example being AI agents, in our view, creating a tailwind for vendors who are able to position themselves as a key component of the new genAI stack”.
-Wells Fargo analyst
10. Keysight Technologies, Inc. (NYSE:KEYS)
Market Capitalization: $27.98 billion
Keysight Technologies, Inc. (NYSE:KEYS) is a global technology company that provides electronic design and test solutions to commercial communications, networking, aerospace, defense and government, automotive, energy, semiconductor, electronic, and education industries. It integrates AI across its development lifecycle to enable faster design and development, supporting the creation and deployment of AI technologies.
On November 12, Morgan Stanley analyst Meta Marshall maintained a “Buy” rating on the stock with a $165.00 price target. The buy rating comes from an expected rebound in demand, particularly in the communications sector, for fiscal year 2025. The company’s position also looks favourable despite a significant upside in the quarter, since there is no potential downside either. The company is also well-positioned to capitalize on key fundamental drivers such as artificial intelligence, network investments, and semiconductor supply chain improvements, all supporting a positive trajectory for the company.
9. Baidu, Inc. (NASDAQ:BIDU)
Market Capitalization: $30.1 billion
Baidu, Inc. (NASDAQ:BIDU) is a Chinese technology company that provides search engine services, artificial intelligence, and cloud computing in China.
On Tuesday, November 12, Baidu, Inc. (NASDAQ:BIDU) unveiled several applications for its artificial intelligence technology, including enhanced text-to-image generation technology and a tool that allows users to develop software applications without coding expertise. The move signifies Baidu’s shifting focus towards the commercialization of large language models (LLMs). The company’s offerings include a text-to-image generator dubbed I-RAG and a no-code developer platform called Miaoda. According to Reuters, I-RAG is a text-to-image technology that leverages Baidu’s search capabilities to improve image accuracy, with the Ernie platform now handling 1.5 billion user queries.
8. Snowflake Inc. (NYSE:SNOW)
Market Capitalization: $41.40 billion
Snowflake Inc. (NYSE:SNOW) is a cloud-based data storage company. It is benefiting from the AI boom considering data warehouses are a critical component in making AI useful for enterprises.
One of the biggest analyst calls for Tuesday, November 12, was Snowflake Inc. (NYSE:SNOW). DA Davidson has reiterated the stock as a “Buy”, even adding it to its “Gold Trophy” best ideas list. The D.A. Davidson Gold Trophy List is a selection of top stock ideas from the firm’s Best-of-Breed Bison list. This elite subset strives to represent the highest quality “buy list” within D.A. Davidson’s coverage.
“Snowflake is the leading cloud data warehousing platform, allowing its customers to run analytics on data that is stored within their database. As more enterprises shift their data to the cloud from on-premise servers, Snowflake offers their customers the ability to gain valuable insights into their data in an easy, and intuitive manner.”
-DA Davidson
7. Micron Technology, Inc. (NASDAQ:MU)
Market Capitalization: $115.42 billion
Micron Technology, Inc. (NASDAQ:MU) is an innovative memory and storage solutions provider. These solutions enable the development of artificial intelligence and generative AI applications.
On November 12, Micron Technology, Inc. (NASDAQ:MU) announced that the 6550 ION NVMe™ is now qualified, meaning it meets all the required standards. The company claims it to be the world’s fastest 60TB data center SSD. The storage solution offers top performance, energy efficiency, and endurance; making it ideal for powerful exascale data center deployments.
“The Micron 6550 ION achieves a remarkable 12GB/s while using just 20 watts of power, setting a new standard in data center performance and energy efficiency. Featuring a first-to-market 60TB capacity in an E3.S form factor and up to 20% better energy efficiency than competitive drives, the Micron 6550 ION is a game-changer for high-capacity storage solutions to address the insatiable capacity and power demands of AI workloads”.
– Alvaro Toledo, vice president and general manager of Micron’s Data Center Storage Group.
6. Alibaba Group Holding Limited (NYSE:BABA)
Market Capitalization: $215 billion
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese multinational technology company that provides technology infrastructure and marketing reach for its users and customers. It is a heavy user of artificial intelligence in its e-commerce business, having recently launched more than a hundred new AI models as part of its AI push.
On Tuesday, November 12, Alibaba Group Holding Limited (NYSE:BABA) revealed an artificial intelligence-powered assistant called “Accio”, after the famous spell used in the Harry Potter series for summoning objects. The search engine aims to help businesses in Europe and America in sourcing supplies, leveraging ChatGPT-like technology in an attempt to increase sales. Businesses can use the tool, with the help of text or image prompts, to find wholesale products, and even assess data such as projected profit and consumer popularity. The tool includes 1 billion product listings and documents covering industries across more than 100 markets from Alibaba.com, the company’s B2B platform.
5. ServiceNow, Inc. (NYSE:NOW)
Market Capitalization: $215.95 billion
ServiceNow, Inc. (NYSE:NOW) is a cloud-based, AI-driven platform, that helps digitize and unify organizations so that they can find smarter, faster, better ways to make work flow.
On November 12, Wells Fargo raised the firm’s price target on ServiceNow, Inc. (NYSE:NOW) to $1,150 from $1,050 and kept an “Overweight” rating on the shares. According to the firm, ServiceNow is among the few companies that are demonstrating tangible AI monetization, i.e. they are really making money from AI. One of the key catalysts that will drive this momentum forward is the launch of its CSM/ITSM agents in Xanadu on November 24. The launch is a major step for the company in enhancing its AI-led customer service offerings. Finally, Wells Fargo expects ServiceNow to take the lead in AI customer service.
4. Cisco Systems, Inc. (NASDAQ:CSCO)
Market Capitalization: $234.02 billion
Cisco Systems, Inc. (NASDAQ:CSCO) is an American multinational digital communications technology company that provides information technology and networking services. It integrates AI-powered capabilities across its entire product and customer service portfolio.
On November 12, Cisco Systems, Inc. (NASDAQ:CSCO) announced their new Cisco Wireless Wi-Fi 7 access points, featuring built-in AI to transform employee and customer experiences. The access points come with a unified subscription that includes the options for both cloud and premises-based management, making it easier for businesses to manage their networks. It is enabled through Cisco’s unified networking subscription, a single license covering Cisco’s entire Wi-Fi 7 solution. Furthermore, there are advanced security features for protecting data and preventing threats, creating smart spaces out of the box for users.
“Just about everything we do blends human behavior with sensors, cameras, or screens—physical experiences in an increasingly digital world. And Wi-Fi is at the center of it all. With Cisco Wi-Fi 7 access points and Cisco Spaces, we are delivering the connectivity, assurance, and data that IT, real estate, and facilities teams need to reimagine employee and customer experiences everywhere”.
– Jeetu Patel, Cisco Chief Product Officer
3. SAP SE (NYSE:SAP)
Market Capitalization: $268.86 billion
SAP SE (NYSE:SAP) is a multinational software company that develops business software, including e-business and enterprise management software, consults on organizational usage of its applications software and provides training services. This market leader in ERP software leverages AI to enhance its enterprise resource planning (ERP) solutions.
On November 11, Business Wire reported that Information Services Group, a leading global technology research and advisory firm, has launched a research study to assess providers in the evolving SAP services ecosystem. This news comes at a time when SAP is enhancing its AI capabilities. The report, SAP Ecosystem 2025, is scheduled to be released in April 2025, allowing enterprise buyers to use report information to evaluate their current vendor relationships, potential new engagements, and available offerings, and letting ISG advisors recommend providers to the firm’s buy-side clients. In September, SAP SE (NYSE:SAP) acquired WalkMe, a leading digital adoption platform company, to enhance its AI capabilities and copilot Joule. Additionally, it continues to push for the adoption of S/4HANA, its digital core, ahead of the planned sunset of its ERP Central Component (ECC) in 2027.
2. Tesla, Inc. (NASDAQ:TSLA)
Market Capitalization: $1.03 trillion
Tesla, Inc. (NASDAQ:TSLA) is an American multinational automotive and clean energy company that designs, develops, manufactures, and sells fully electric vehicles, energy generation and storage systems. It leverages artificial intelligence to develop autonomous technologies and robots that have the potential to revolutionize manufacturing.
Tesla, Inc. (NASDAQ:TSLA) was one of the biggest analyst calls for Tuesday, November 12. Morgan Stanley reiterated the stock as an “Overweight”, stating that it is sticking with the stock heading into the Trump administration. According to the firm, Elon Musk’s public support for Trump has gained him a voice in the upcoming administration, contributing to Tesla’s 40% stock rally. Firms such as Wedbush have similar stances on Tesla, stating how Trump’s return to the White House has the potential to unlock “$1 trillion of incremental AI valuation” for the company.
“As we look ahead to FY25 (and over the next 4 years), we expect to see TSLA’s TAM [total addressable market] aperture expand to far wider domains, many of which are not included in buy-side or sell-side financial models for the company”.
-Morgan Stanley analyst
1. Apple Inc. (NASDAQ:AAPL)
Market Capitalization: $3.39 trillion
Apple Inc. (NASDAQ:AAPL) is a multinational technology company that designs, manufactures, and markets smartphones, tablets, PCs, wearables, and accessories worldwide. The company is a key AI player due to its investments in AI technology and integration of AI in its offerings, such as its latest iPhone 16 which comes with new AI features.
On November 13, Bloomberg reported that Apple Inc. (NASDAQ:AAPL) is about to launch its very own product in the smart home market in an attempt to catch up with its rivals. The product, code-named J490, is an AI Wall Tablet for Home Control, spotlighting the new Apple Intelligence AI platform. The product is designed to be the command center in a home, performing functions such as controlling appliances, handling videoconferencing, and even using artificial intelligence to navigate apps. This new Apple gadget will be competing with Amazon’s Echo Show and Echo Hub smart displays, as well as Google’s Nest Hub.
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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