Paul Hickey, Bespoke co-founder, joined CNBC’s ‘Closing Bell: Overtime’ to discuss the market’s reaction to the election results and earnings. According to Hickey, as the President-elect’s cabinet takes shape, it will provide insight into what to expect moving forward. However, he notes that election results can be overstated. Over the past 16 years, we’ve had some “very good” market returns for Obama, Trump, and Biden, he notes. Looking ahead, Hickey suggests that the AI bull market is likely to persist, driven by momentum, and will likely only change course if influenced by a significant external force.
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Hickey’s remarks demonstrate how the market is resilient in adapting to different administrations. The current AI boom stands to be a case in point, where innovations in artificial intelligence and machine learning have been attracting investors and consequently driven substantial capital inflows. Therefore, it is safe to say that companies harnessing AI for productivity gains, efficiency improvements, and new revenue streams have become the focal point of market optimism. As more industries integrate AI technology into their operations, the resulting growth potential could sustain the bull market for an extended period.
Developments in the AI Landscape
With AI momentum showing no signs of slowing down, there seemingly isn’t anyone who doesn’t want to reap all the benefits that AI delivers. Every year, more than a thousand startups join Station F, an iconic startup in Paris. Station F selects the top 40 most promising startups from the pool of 1000, sharing a list of what it calls the “Future 40”. 34 of the 40 startups this year have been using artificial intelligence, implying the significance of the technology.
Artificial intelligence is just as much a focal point nationally as it is at the local level. That said, OpenAI recently revealed its plans to work with the new administration on AI policy. Known as the official “blueprint for U.S. AI infrastructure”, it involves artificial intelligence economic zones, tapping the U.S. Navy’s nuclear power experience and government projects funded by private investors, notes CNBC. The blueprint also includes a North American AI alliance to compete with China’s initiatives and a National Transmission Highway Act “as ambitious as the 1956 National Interstate and Defense Highways Act.”
As per OpenAI, investment in the US AI is going to result in tens of thousands of jobs, GDP growth, a modernized grid that includes nuclear power, a new group of chip manufacturing facilities, and billions of dollars in investment from global funds. While Trump plans on repealing Biden’s executive order on AI, OpenAI has, in turn, highlighted a plan of AI economic zones co-created by state and federal governments “to give states incentives to speed up permitting and approvals for AI infrastructure”, amongst other things.
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.
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. Navitas Semiconductor Corporation (NASDAQ:NVTS)
Market Capitalization: $334.37 million
Navitas Semiconductor Corporation (NASDAQ:NVTS) is a pure-play, next-generation power-semiconductor company. Its GaN chips have the potential to play a crucial role in powering AI data centers and other high-performance computing applications.
On November 12, Navitas Semiconductor Corporation (NASDAQ:NVTS) and Richardson Electronics, Ltd. announced an expanded distribution partnership for next-gen silicon carbide (SiC) power semiconductors for Europe, the Middle East, and Africa (EMEA). The partnership will be focusing on Navitas’s GeneSiC product line, including Navitas’ latest family of Gen-3 Fast MOSFETs that offer cool-running performance and 3x longer life.
“We are excited to partner with Richardson Electronics to support our expanding silicon carbide portfolio beyond the Americas into the EMEA region. Richardson Electronics provides excellent technical and sales support and has a strong reach within our key focus markets. We are looking forward to expanding our customer base in EMEA”.
– David Carroll, Senior Vice President of Worldwide Sales at Navitas Semiconductor Corporation (NASDAQ:NVTS).
14. Penguin Solutions, Inc. (NASDAQ:PENG)
Market Capitalization: $912.32 million
Penguin Solutions, Inc. (NASDAQ:PENG) is a technology company that designs, builds, deploys, and manages high-performance, high-availability enterprise solutions. Its products and services help data centers and tech companies fulfill AI’s enormous memory requirements.
On November 13, Penguin Solutions, Inc. (NASDAQ:PENG) announced that its end-to-end AI infrastructure solutions will be on display at the Supercomputing 24 (SC24), an international conference for high-performance computing (HPC), networking, storage, and analysis, taking place in Atlanta from November 18-22. The AI solutions being demonstrated include an AI factory solution, intelligent cluster management, as well as advanced computing and memory technologies.
13. Box, Inc. (NYSE:BOX)
Market Capitalization: $4.97 billion
Box, Inc. (NYSE:BOX) is a cloud-based content services platform enabling organizations of various sizes to manage and share their content from anywhere on any device. The company leverages artificial intelligence through its Box AI platform, positioning itself as a key player in the “intelligent content management” space.
On November 12, Box, Inc. (NYSE:BOX) announced a new set of AI-powered innovations to revolutionize content management for enterprises. The new Box AI studio and Box Apps will help businesses create and deploy powerful custom Box AI agents, as well as easily build applications for critical business processes like contract management, invoice processing, employee onboarding, and more. The company has also introduced Enterprise Advanced, a new plan integrating the entire Box Intelligent Content Management platform into a single offering.
“90 percent of the data in an enterprise is unstructured – and the vast majority of that data is content. Innovation in LLMs has transformed our ability to more easily structure that data, freeing it from data silos and connecting it with business processes. That’s all changing with Intelligent Content Management from Box. For the first time ever, businesses of all sizes will be able to realize the full value of their content and leverage the data inside their files to drive innovation, automate processes, and secure their most important information at a fraction of the cost of legacy systems”.
– Aaron Levie, Co-founder and CEO of Box.
12. Cirrus Logic, Inc. (NASDAQ:CRUS)
Market Capitalization: $5.33 billion
Cirrus Logic, Inc. (NASDAQ:CRUS) is a fabless semiconductor company engaged in the development of analog and mixed-signal integrated circuits for audio and energy markets. The chipmaker benefits from the production of leading-edge chips for smartphones and artificial intelligence applications.
On November 12, Loop Capital initiated coverage of Cirrus Logic, Inc. (NASDAQ:CRUS) with a “Buy” rating and a $130 price target. According to the firm, Cirrus is poised to benefit from a step-up in annual iPhone unit shipments in 2026, which is what investors will be looking out for over the year. Loop states that the company is also set to gain from its improvements in battery player capabilities, especially considering the growing needs of smartphones and PCs using genAI.
11. Pure Storage, Inc. (NYSE:PSTG)
Market Capitalization: $16.34 billion
Pure Storage, Inc. (NYSE: PSTG) is an advanced data storage platform that stores, manages, and protects the world’s data at any scale. The company offers advanced data storage solutions for supporting artificial intelligence workloads.
On November 13, Pure Storage, Inc. (NYSE:PSTG) announced its strategic investment in CoreWeave, the AI Hyperscaler™, to boost innovation in AI Cloud services. Besides the investment, the two companies also unveiled that they will be entering into a partnership where customers will be able to leverage the Pure Storage platform within CoreWeave Cloud which will help them accelerate the development and deployment of AI.
“Our strategic collaboration with CoreWeave reflects a shared commitment to delivering AI innovation at scale and marks a major milestone in delivering the flexibility and scalability that AI-driven organizations need to thrive. Integrating the Pure Storage platform into CoreWeave’s specialized cloud service environments enables customers that require massive scale and flexibility in their infrastructure the ability to tailor their infrastructure and maximize performance on their own terms.”
– Rob Lee, Chief Technology Officer, Pure Storage
10. Snowflake Inc. (NYSE:SNOW)
Market Capitalization: $41.40 billion
Snowflake Inc. (NYSE:SNOW) is a cloud-native platform that develops database architecture, data warehouses, query optimization, and parallelization solutions. It enables businesses to build, manage, and scale AI and machine learning applications.
On November 12, Snowflake Inc. (NYSE:SNOW) announced new developments to the Snowflake Platform, the company’s market-leading platform that allows users to store, analyze, and manage large volumes of data. Announced at the annual developer conference, BUILD 2024, the advancements will help enterprises simplify data management and enhance artificial intelligence capabilities. Some of its latest offerings include the Snowflake Open Catalog, which allows users to adapt to organizational needs by integrating new engines, the general availability of Document AI to help businesses extract insights from documents using natural language processing, and new security features in the Snowflake Horizon Catalog.
9. Vertiv Holdings Co (NYSE:VRT)
Market Capitalization: $46.74 billion
Vertiv Holdings Co (NYSE:VRT) offers digital infrastructure technology and services for data centers, communication networks, and commercial and industrial facilities. Its offerings, such as its cooling and power systems, are crucial to ensure that data centers run smoothly.
On November 13, Evercore lifted its price target on Vertiv Holdings Co (NYSE:VRT) to $150 from $135 and reiterated an “Outperform” rating. According to the firm, this power and cooling equipment manufacturer is on track towards growth, gaining from artificial intelligence market expansion and also gaining share in an expanding market.
“We think the company is well-positioned to not just capture secular tailwind AI infrastructure tailwinds, but also gain share in an expanding market, and more importantly, do so in an increasingly more profitable manner,”
-Evercore.
8. NXP Semiconductors N.V. (NASDAQ:NXPI)
Market Capitalization: $56.67 billion
NXP Semiconductors N.V. (NASDAQ:NXPI) is a global semiconductor company creating solutions that enable secure connections for a smarter world. The company plays a key role in AI through its automotive chips, microcontrollers, and machine-learning platforms that enable autonomous vehicle systems, edge computing, and more.
On November 12, NXP Semiconductors N.V. (NASDAQ:NXPI) announced the i.MX 94 family, a new set of application processors designed for industrial and automotive uses. By integrating features such as communications, safety, and real-time control into a single chip, the i.MX 94 family aims to simplify complexity, ensuring optimized end-to-end performance when coordinating real-time communication and actions.
“Connectivity is more complex than ever before, and the i.MX 94 family is designed to help simplify that complexity. The i.MX 94 family delivers the high-performance edge processing needed for today’s industrial automation, as well as automotive telematics applications, with the advanced networking, security, safety, and AI capabilities needed to enable tomorrow’s innovations”.
-Charles Dachs, Senior Vice President and General Manager, Industrial and IoT, NXP.
7. Fortinet, Inc. (NASDAQ:FTNT)
Market Capitalization: $74.33 billion
Fortinet, Inc. (NASDAQ:FTNT) provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products.
On November 13, Baird raised the firm’s price target on Fortinet, Inc. (NASDAQ:FTNT) to $95 from $88 and kept an “Outperform” rating on the shares. The price target raise comes from increased optimism surrounding the company’s major FY25 refresh cycle. 2026 will witness a record number of FortiGate firewalls, which are next-generation firewalls backed by FortiGuard AI-Powered Security Services, reach end-of-support status. Consequently, customers will start the refresh cycle sometime in 2025, boosting the company’s performance. This optimism is crucial to the company given its cautious Q4 billings guidance.
6. Amphenol Corporation (NYSE:APH)
Market Capitalization: $87.20 billion
Amphenol Corporation (NYSE:APH) is engaged in the design, manufacture, and marketing of electrical, electronic, and fiber optic connectors. Its products play a vital role in the progress of IT and AI, providing key connectors and sensors that are integral to AI-driven technologies.
On November 13, Evercore increased its price target on Amphenol Corporation (NYSE:APH) to $80 from $75 and maintained an “Outperform” rating. According to the firm, the electrical connector manufacturer has the ability to “sustain double-digit revenue growth and mid-teens EPS growth with high consistency and low volatility”. Moreover, even though artificial intelligence is one of its drivers, it is not the only one. It is also exposed to several different end markets, meaning it wins both when certain segments show signs of recovery or continued strength.
5. Micron Technology, Inc. (NASDAQ:MU)
Market Capitalization: $115.42 billion
Micron Technology, Inc. (NASDAQ:MU) provides innovative memory solutions. These memory and storage solutions are crucial components in GPUs used for AI processing.
On November 12, shares of Micron Technology, Inc. (NASDAQ:MU) fell by 5.3% in morning trading following a note from Edgewater Research. The report had advised caution about the Dynamic Random-Access Memory (DRAM) market, painting a bearish picture for Micron and the long-term benefits it is likely to receive from the AI boom. Mizuho Securities analyst Jordan Klein warned of the event the same day:
“Edgewater (after destroying MPWR yesterday) is out with a CAUTIOUS DRAM [dynamic random access memory] call today…expect selling pressure (and likely shorts pressing) Micron today”.
4. Arista Networks, Inc. (NYSE:ANET)
Market Capitalization: $124.14 billion
Arista Networks, Inc. (NYSE:ANET) delivers software-driven cloud networking solutions for large data center storage and computing environments.
On November 13, Evercore raised its price target on Arista Networks, Inc. (NYSE:ANET) to $450 from $425 and reiterated an “Outperform” rating. According to Evercore analysts, a number of drivers will boost revenues for the company in 2025, including new customers. There is room for upside stemming from the accelerating demand for AI Ethernet switching and the growth of campus networks.
“Arista was predictably conservative with the CY25 revenue guide (15-17%), which leaves room for upside as we go through the year. The team sees a path to at least 20% revenue growth in 2025 and 2026, which should edge the stock toward $500”
3. ServiceNow, Inc. (NYSE:NOW)
Market Capitalization: $215.95 billion
ServiceNow, Inc. (NYSE:NOW) is a cloud-based, AI-driven platform, that provides end-to-end intelligent workflow automation platform solutions for digital businesses.
On November 13, ServiceNow, Inc. (NYSE:NOW) introduced new generative AI and governance innovations on its Now Platform for improved speed, scale, and security. Adding more than 150 GenAI innovations to its portfolio, the single architecture of the Now Platform ensures that strong governance is built into its Now Assist GenAI solutions, models, and agents, regardless of where they are used in the organization. The new updates will provide customers with the tools needed for responsible AI, allow interaction with GenAI prompts in the user’s native language, and deliver purpose-built solutions.
“Enterprises across every industry are embracing a future of greater autonomy and productivity, all in service to their employees, customers, and overall business impact. The ServiceNow platform was built to empower this transformation, offering smarter, faster ways of working through AI-enabled automation. With governance at the core, these new innovations bring more personalized, collaborative, trusted experiences to life across the enterprise”.
– Jon Sigler, senior vice president of Platform and AI at ServiceNow.
2. Salesforce Inc (NYSE:CRM)
Market Capitalization: $326.68 billion
Salesforce Inc (NYSE:CRM) provides cloud-based customer relationship management (CRM) software. The company’s strategic collaborations with AI partners and its investments in generative AI make it a key player in the AI space.
On November 13, OTR Global upgraded its view of Salesforce Inc (NYSE:CRM) to Positive from Mixed. The view upgrade comes after insights drawn from its partner checks. These have pointed to favorable trends in the company’s performance during fiscal Q3, including a slight uptick in new-logo activity and larger deal sizes. The positive momentum aligns with Salesforce’s broader strategic focus on integrating advanced AI capabilities into its offerings.
1. Apple Inc. (NASDAQ:AAPL)
Market Capitalization: $3.39 trillion
Apple Inc. (NASDAQ:AAPL) is a multinational corporation and technology company. This AI player has been heavily investing in artificial intelligence technology. Recently, it revealed its personal artificial intelligence system, Apple Intelligence, across many of its devices.
On November 13, Evercore ISI reiterated Apple Inc. (NASDAQ:AAPL) as “Outperform” with a price target of $250. The analysts deem it as one of their top picks heading into 2025, affirming that the tech giant is set to benefit from artificial intelligence in the long term.
“The impact of Apple Intelligence on iPhone sales remains highly debated and while it is unlikely we will see a super cycle this year, we do not think this should be overly concerning for investors”.
As more AI features get incorporated, iPhone growth is also ticking higher, analysts note. Moreover, they state that the company’s AI strategy isn’t just limited to iPhones, rather, the company also possesses the ability to monetize third-party AI efforts. This ability will enable them to reap the AI rewards without the massive uptick in CapEx witnessed by their mega-cap peers, they penned.
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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