OpenAI has been making headlines in the artificial intelligence realm ever since its existence, and it seems the company has something new to share almost every day. However, not all the news surrounding the company is positive. In the latest news shared by The Washington Post, OpenAI has suspended access to its latest, highly anticipated video generation tool, Sora. This suspension followed a small group of artists who had leaked access to the tool to protest the treatment they’ve been receiving at the company.
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Arguing that the company used them as “PR Puppets” without pay, the artists created a webpage allowing anyone to make AI videos using Sora. OpenAI granted hundreds of artists free access to the video generation tool so that they could test out the new artificial intelligence video generator. However, 20 of these artists argued that the company had taken advantage of their unpaid labor. This is what the group of artists wrote on Hugging Face, an open-source repository for artificial intelligence projects.
“Hundreds of artists provide unpaid labor through bug testing, feedback and experimental work for the program for a $150B valued company”.
The artists further added that the opportunities offered in return for helping the company, such as being selected to have their Sora-created films screened, offer “minimal compensation which pales in comparison to the substantial PR and marketing value OpenAI receives. The tool was public three hours before it was shut down. OpenAI spokesperson Niko Felix said that the company has temporarily shut down user access to Sora while it looks into the situation.
“Hundreds of artists in our alpha have shaped Sora’s development, helping prioritize new features and safeguards. Participation is voluntary, with no obligation to provide feedback or use the tool.”
-Felix wrote in a statement from OpenAI.
In other news, Axios reported that President-elect Donald Trump is considering naming an “AI czar” in the White House that will be coordinating federal policy and governmental use of artificial intelligence. While Elon Musk isn’t going to be the AI czar, he is expected to be involved.
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. Informatica Inc. (NYSE:INFA)
Number of Hedge Fund Holders: 22
On November 26, Informatica Inc. (NYSE:INFA), a leader in enterprise AI-powered cloud data management, announced that Australian and New Zealand brewer Lion has chosen the company to support its data management transformation. Lion has been facing low data maturity, data silos, and limited knowledge sharing for many years. Recently, it has embarked on a journey to create a next-generation digital enterprise for its business. It has chosen to implement Informatica’s Cloud Data Governance and Catalog, a service supported by Informatica’s AI-powered Intelligent Data Management Cloud™ platform. The service will help Lion gain visibility into the organization’s data sets and enable it to uplift the quality of its data.
“We are extremely pleased to be chosen by Lion to help them on their data journey to improve data quality and literacy across their organization for innovation and greater customer experience. With Informatica’s cloud data governance solution, Lion can quickly and accurately organize, manage data, leverage trustworthy data and share it confidently across their organization to drive data intelligence for better business outcomes.”
– Alex Newman, Country Manager for Informatica Australia and New Zealand.
14. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 25
On November 26, UBS raised the firm’s price target on Bloom Energy Corporation (NYSE:BE) to $33 from $21 and kept a “Buy” rating on the shares. Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation and is helping meet the growing energy demands of AI data centers. The company has recently secured a deal with American Electric Power, making it the largest procurement of fuel cells to date. AEP has placed an order for 100 megawatts of fuel cells and orders for expansion are expected in 2025. According to UBS, this order paves the way for further orders. Moreover, the company is well-positioned considering the demand for electricity-intensive computing resources continues to surge with data centers and AI-driven applications.
13. Rambus Inc. (NASDAQ: RMBS)
Number of Hedge Fund Holders: 34
Rambus Inc. (NASDAQ: RMBS), a long-time DRAM memory technology pioneer and key performance enabler in AI systems, was initiated with an “Outperform” rating by Baird on November 26th. The firm stated that the memory interface chip company is an under-the-radar data center beneficiary.
“Rambus’ technology and IP is central to the AI-driven performance increase in data centers, with first-to-market solutions addressing performance bottlenecks between processor and memory. Rambus should be a core holding within the AI-enabling memory technologies investment thesis”.
The analyst forecasts strong secular revenue growth for Rambus Inc. as bandwidth requirements continue to rise for chips. According to Baird, the company has a $1.35 billion data center chipset opportunity.
12. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
According to a Jefferies analyst, the rally in software stocks – led by Palantir Technologies Inc. (NYSE:PLTR), which is a leading provider of AI systems, and one other stock — will continue in 2025. The two key drivers behind this growth are improved earnings estimates and the monetization of generative artificial intelligence.
“We view four key catalysts to drive higher growth and valuation in 2025: improving fundamentals; accelerating AI monetization; a more favorable M&A environment; and budgets unlocking following election overhang.”
11. Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 47
On November 25, Citi analyst Tyler Radke raised the firm’s price target on Elastic N.V. (NYSE:ESTC), the search AI company, to $150 from $136 and kept a “Buy” rating on the shares. The company has had a great second quarter, recovering from mistakes and bouncing back with accelerated bookings, billings growth, and ramping generative artificial intelligence contribution, the analyst told investors. The analyst firm believes that generative AI is “driving a renaissance in the company’s core search business”.
10. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 51
On November 25, BofA raised the firm’s price target on AppLovin Corporation (NASDAQ:APP), a prominent marketing platform driven by AI technology, to $375 from $252 and kept a “Buy” rating on the shares. The firm said that the buy rating comes after several positive developments and “bullish” events ever since the company’s performance boost in Q3 from AI-driven advertising. The reasons include increased investor participation; the stock joining the Nasdaq 100 index on November 18; the company’s announcement of a transition to an all-unsecured debt capital structure on November 19; and S&P upgrading AppLovin Corporation (NASDAQ:APP) to investment grade on November 7.
9. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 54
Baidu, Inc. (NASDAQ:BIDU), a Chinese internet giant and AI pioneer, was downgraded by Susquehanna International Group on Monday, November 25th. Analyst Shyam Patil downgraded the stock to “Neutral” from Positive and also cut his price target to $85 from $105. According to Patil, macro-related pressures and AI search monetization headwinds” are expected to weigh on Baidu’s revenue. As such, Baidu’s challenge lies in making its AI efforts profitable. The analyst noted that queries that its search engine answers using generative AI are currently monetizing at a lower rate than traditional search because they don’t always direct users to ads.
8. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
On November 25, analyst Gregg Moskowitz from Mizuho Securities reiterated a Buy rating on Palo Alto Networks, Inc. (NASDAQ:PANW), a leader in AI-powered cybersecurity, and kept the price target at $450.00. Moskowitz has given his buy rating due to Palo Alto’s strong performance and prospects. It demonstrated a 14% year-over-year revenue growth in the first quarter, surpassing market expectations, as well as an impressive 40% growth in next-gen security ARR. Moskowitz is optimistic about the company given its strong position in cloud security as well as its shifts towards higher-growth recurring revenue streams. Looking at the company’s guidance for the second quarter and the full year, the management is optimistic about its continued growth and has also raised revenue and next-gen security ARR forecasts. Overall, the firm believes in the company’s potential for higher expected growth and favorable margins compared to its peers.
7. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 70
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors. On November 26th, Wells Fargo raised the firm’s price target on Marvell Technology, Inc. (NASDAQ:MRVL) to $110 from $90 and kept an “Overweight” rating on the shares. Wells Fargo expects faster growth in custom AI ASICs and steady improvement in core revenue to boost confidence in achieving over $4 per share in earnings by fiscal year 2026.
6. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 71
On November 22, Citi raised the firm’s price target on Snowflake Inc. (NYSE:SNOW), an artificial intelligence data cloud company, to $225 from $183 and kept a “Buy” rating on the shares. The rating comes amid Snowflake’s so-called “redemption” quarter, characterized by “robust” sales outperformance, accelerating bookings strength, ramping new product contribution, and stabilizing recurring revenue. The management is optimistic, highlighting new artificial intelligence and data engineering products, which outweighed challenges like storage and optimization issues.
5. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
On November 25, Evercore ISI raised the firm’s price target on CrowdStrike Holdings, Inc. (NASDAQ:CRWD), a leader in AI-driven endpoint and cloud workload protection, to $400 from $325 and kept an “Outperform” rating on the shares. According to the analysts, the July outage is “seemingly forgiven”, as evident in the firm’s survey results this quarter. The environment for the AI-powered cybersecurity firm is stabilizing, and partner and customer conversations are also positive this quarter.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
On Monday, November 25th, UBS raised the firm’s price target on Tesla, Inc. (NASDAQ:TSLA) to $226 from $197 and kept a “Sell” rating on the shares. Tesla is an American multinational automotive and clean energy company that leverages AI to drive advancements in autonomous driving, robotics, and smart manufacturing. According to the analysts, Tesla shares have surged 40% since the U.S. election, adding over $350M of market cap. The firm is skeptical over the valuation of Tesla’s artificial intelligence initiatives, including robotaxis and the humanoid robot, Optimus. The analyst further asserted that the rise in Tesla’s stock is largely driven by momentum.
3. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 107
On November 25, Mizuho analyst Vijay Rakesh reiterated an “Outperform” rating and a $135.00 price target on Micron Technology, Inc. (NASDAQ:MU), a US-based innovative memory and storage solutions provider that supports the development of artificial intelligence and generative AI applications. As per the firm’s projections, the HBM3e market is expected to grow sevenfold, reaching over $35 billion by 2026. Moreover, Micron could secure 20-25% of the market by qualifying its 12Hi HBM3e product by the end of 2024. The company is also set to witness a 42% increase in TSV capacity in 2025, driving 10% growth in overall DRAM production. A key driver for DRAM evolution that the firm recognized is 3D stacking technology. All in all, the firm has raised its fiscal 2026 top-line and EPS estimates for Micron. The raise comes from the anticipated revenue surge from HBM3e and strong margins through fiscal 2026.
2. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
On November 25, Wedbush raised the firm’s price target on Salesforce Inc (NYSE:CRM) to $375 from $325 and kept an “Outperform” rating on the shares. Salesforce Inc (NYSE:CRM) is a cloud-based CRM company that has gained traction after the launch of its AI-powered platform called Agentforce. The analyst affirms that it’s time for the broader software sector to join in on the AI party, expressing bullish sentiments about the software sector’s role in the upcoming phase of the artificial intelligence (AI) revolution. The anticipated adoption of large language models and generative AI by 2025 is the major force behind their optimism. This shift is expected to significantly boost enterprise consumption of AI technologies.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) has been facing problems with releasing its artificial intelligence models for iPhones and other products in China. Apple Inc. (NASDAQ:AAPL) is a technology company that has recently begun leveraging Apple Intelligence, its AI-driven personal system, to enhance its devices and services worldwide. Meanwhile, a top Beijing official has warned that foreign companies will continue to face problems to win approvals regarding deployment of AI technologies unless they partner with local groups. Monday, November 25th marked Tim Cook’s third visit to China as the company tries to navigate the complex landscape of the country, aiming to bring Apple Intelligence to the devices sold in the country. Cook also visited China in October, acknowledging the country’s complicated regulations. He stated that there is a specific regulatory process behind this and that the company needs to complete it.
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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