There is a lot of debate around potential AI policy changes as Donald Trump prepares to take charge as US president. According to a report by news platform Wired, a Trump administration AI policy would likely prioritize ensuring US leadership in AI development, focusing on competition with China. This strategy, per the report, could involve bolstering federal resources to support massive AI projects and maintaining or intensifying sanctions on Chinese tech companies to restrict their access to critical US technology, like advanced chips essential for training powerful AI models. Trump has promised to repeal the executive order on AI by US President Biden, which was introduced to implement safety measures like preventing algorithmic bias and strengthening federal oversight of AI developments. Critics argue that reversing these policies could lead to less oversight in a rapidly evolving field, potentially increasing risks as AI is deployed more broadly.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Another important development that investors should keep an eye on is the influence of Elon Musk on Trump’s policies. Musk aggressively backed Trump during the campaign and his AI startup, xAI, could benefit from friendly Trump policies, per the Wired report. The report also added that the focus on xAI would in turn serve to make OpenAI and Google targets, perhaps threatening the ability of the two firms to secure lucrative future government contracts.
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. Wolfspeed, Inc. (NYSE:WOLF)
Market Capitalization: $1 Billion
Wolfspeed, Inc. (NYSE:WOLF) operates as a bandgap semiconductor company that focuses on silicon carbide and gallium nitride (GaN) technologies. On November 7, Roth MKM analyst Craig Irwin lowered the price target on the stock to $20 from $25 and kept a Buy rating on the shares. The company posted a difficult Q1 result and initiated a larger restructuring than anticipated, reaching beyond the Durham fab, the analyst told investors in a research note. Wolfspeed is reducing its headcount by 20% or about 1,000 positions vs. 500 that worked directly in the Durham fab, and the advisory estimates cash charges being closer to $200 million, Roth added.
14. Coherent Corp. (NYSE:COHR)
Market Capitalization: $16 Billion
Coherent Corp. (NYSE:COHR) develops, manufactures, and markets engineered materials, optoelectronic components, and devices worldwide. On November 8, Stifel raised the price target on the stock to $120 from $85 and kept a Buy rating on the shares after the company’s Q1 revenue came in modestly above guidance and consensus expectations and Q2 revenue guidance was also slightly above consensus estimates. The advisory now looks forward to the company’s investor day in late May 2025, where it expects details on longer-term strategy and financial targets.
13. Datadog, Inc. (NASDAQ:DDOG)
Market Capitalization: $41 Billion
Datadog, Inc. (NASDAQ:DDOG) provides monitoring and analytics services. On November 8, Scotiabank lowered the price target on the stock to $133 from $135 and kept an Outperform rating on the shares. The company reported a Q3 that was just right across the key revenue and operating margin metrics, the advisory told investors. Scotiabank continues to love the company’s leadership in cloud-native observability, end-to-end solutions across the three pillars of observability, and the trend of consolidation within the market.
12. 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. Jackie Kwong, a senior executive at Dell, spoke at the Dell Technologies Forum recently, noting that businesses were eager to jump on the AI bandwagon to improve their efficiency and performance, but the challenge was how to drive efficiencies and optimize processes without manual intervention and complexity. The remarks were made in the context of rising AI adoption in Asia and how businesses were deploying advanced computing infrastructure on premises.
11. Arista Networks, Inc. (NYSE:ANET)
Market Capitalization: $124 Billion
Arista Networks, Inc. (NYSE:ANET) engages in the development, marketing, and sale of data-driven, client-to-cloud networking solutions for data center, campus, and routing environments. On November 8, Barclays raised the price target on the stock to $495 from $341 and kept an Overweight rating on the shares. The company beat Q3 estimates and guided next year to 15%-17%, slightly lower than expectations but likely conservative, the advisory told investors in a research note. The advisory was encouraged by Arista’s artificial intelligence ramp as well as share gains in campus and routing.
10. Arm Holdings plc (NASDAQ:ARM)
Market Capitalization: $149 Billion
Arm Holdings plc (NASDAQ:ARM) architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers. On November 7, JPMorgan analyst Harlan Sur raised the price target on the stock to $160 from $140 and kept an Overweight rating on the shares. Arm delivered solid fiscal Q2 results on licensing upside, guided for a slightly lower Q3 revenue outlook, and maintained its prior fiscal 2025 outlook, the advisory told investors in a research note. The advisory increased estimates to account for a stronger adoption of higher dollar-value CSS solutions in fiscal 2026.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Market Capitalization: $185 Billion
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. On November 12, Cristiano Amon, the CEO of the firm, said at the Web Summit conference in Lisbon that the artificial intelligence boom would not lead to a global chip shortage similar to what happened during the pandemic, even with demand for AI-enabled smartphones rising. Amon added that users, when they thought about buying their next phone, they wanted to buy a better phone. He said he expected that the capabilities of having processing of AI and AI use cases were actually going to continue to accelerate that trend.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Market Capitalization: $240 Billion
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. On November 12, AMD announced the release of the AMD Versal Premium Series Gen 2, an adaptive System-on-a-Chip (SoC) platform designed to deliver the highest levels of system acceleration for a wide range of workloads. The new product helps unlock more memory resources faster to address the growing real-time processing and storage demands of data-intensive applications in AI data centers, communications, test and measurement, and aerospace and defense markets.
7. ASML Holding N.V. (NASDAQ:ASML)
Market Capitalization: $268 Billion
ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. Latest reports, published by news agency Reuters, claim that authorities in the United States are finalizing a rule that will limit US investments in AI and other technology sectors in China that could threaten national security. The rules cover three key sectors, semiconductors and microelectronics, quantum information technologies, and certain AI systems. The new rules will go into effect early next year. Companies in the space include ASML and other chip manufacturers that are already battling tightening US export curbs on chip business with China.
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 8, the company confirmed that investment plans in the United States, which include chip production at a $65 billion facility in Arizona, remain unchanged following the election of Donald Trump as the new US president. The remarks were made by the firm in an email to news agency Reuters. Trump had, earlier on the campaign trail, accused Taiwan of stealing American semiconductor business, per Reuters.
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, the company said that it would reduce the price of Subscription for no ads, and offer people in the EU an additional new choice to use Facebook and Instagram for free with less personalized ads. The new ad option comes amid pressure from EU regulators who believe users should have access to a free version of the company’s apps with less-personalized ads. The latest developments come mere weeks after the firm debuted new AI features for ad targeting that have helped the tech giant surpass rival Alphabet in ad growth over the past few months.
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 e-commerce business. On November 12, news publication Financial Times reported that Amazon was set to release new artificial intelligence chips. Per the reports, the move is part of a larger plan by the tech giant to accelerate the rate of returns on multibillion-dollar semiconductor investments, as well as decreasing reliance on chipmaker NVIDIA. The news publication further claims that the cloud computing division of the company is spending big on custom AI chips, hoping to boost efficiency inside Amazon data centers and bring down the costs to customers of Amazon Web Services.
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. As the race for AI supremacy heats up, tech firms are increasingly reliant on investments in startups that look set for multi-billion IPOs and subscription-based revenue models that are likely to pay dividends in the long term. Alphabet Inc. recently took part in a funding round for Waymo, a software firm working on AI-powered autonomous driving. The funding round raised over $5.6 billion for the software company, valuing the startup at more than $45 billion.
2. Microsoft Corporation (NASDAQ:MSFT)
Market Capitalization: $3.1 Trillion
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. Software firm Fivetran announced recently that it would be partnering with Microsoft to offer data solutions for enterprises. According to the software firm, the partnership will help organizations to efficiently centralize, manage and scale data in OneLake, a data service by Fivetran that is a part of Microsoft Fabric, addressing the growing demand for robust infrastructure to support artificial intelligence and machine learning workloads.
1. NVIDIA Corporation (NASDAQ:NVDA)
Market Capitalization: $3.6 Trillion
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On November 11, Mizuho raised the price target on the stock to $165 from $140 and kept an Outperform rating on the shares ahead of the quarterly report on November 20. The advisory expects in-line January quarter guidance, setting up for a strong 2025 with GB200 and GB300 ramping. The advisory believes Nvidia is dominating the artificial intelligence accelerator market. The stock also remains a Mizuho Top Pick.
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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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