Artificial intelligence has penetrated every aspect of our lives. The latest indication of this comes from the Vatican, which recently revealed new AI-enabled features for Saint Peter’s Basilica, a historic church, that allows virtual access to Renaissance-era architectural treasures for enhanced tours for visitors. News agency Reuters reports that tech giant Microsoft and heritage startup Iconem worked with the Vatican on a new interactive website, a digital replica of the basilica and two AI-enabled exhibitions. Per the report, the 3D model of the area was developed using drones, cameras and lasers. AI algorithms then pieced together, elaborated and completed the data.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
AI has truly revolutionized the world. For example, AI tools that are available in the market today can undertake many time-consuming tasks intelligently, like gathering and organizing information, and drafting documents and presentations. Peter Morici, an American economist, recently noted in an opinion piece for Market Watch that the legal and other liabilities when AI agents are allowed to act on behalf of humans may be without limit. Morici was contextualizing the advancement of AI tools in sectors like education, finance, safety and security, as well as healthcare and medicine.
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).
A graph plotting the trends and performance of stocks on the public equity markets.
13. 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 8, TD Cowen lowered the price target on the stock to $10 from $12 and kept a Hold rating on the shares. The advisory said the company posted light F1Q sales and guided 16% below Street on industrial/EV headwinds affecting both device and materials.
12. 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, Barclays analyst Tom O’Malley raised the price target on the stock to $105 from $85 and kept an Overweight rating on the shares. The analyst said the company’s better revenue trajectory has been offset by higher spend and lower gross margins with the promise of more visibility on strategic action by May being a key takeaway.
11. 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. Mohammed Amin, a senior executive at Dell, spoke at the Dell Technologies Forum 2024 recently, noting that companies were keen to leverage AI but needed to position their data properly to garner real-time insights. According to a report by tech website ITWeb, Amin noted that Dell’s research found that 92% of businesses foresee that AI and GenAI will significantly impact their industry, but 31% were already struggling to keep up with the pace of the disruption.
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. According to Rene Haas, the CEO of the firm, more than 300 billion Arm-based chips have been shipped to customers all over the world. Haas made the comments during the second quarter earnings call. Haas highlighted the importance of AI during his remarks, noting that AI was everywhere and Arm was the only compute platform that could run AI from the edge to the cloud. Per Haas, AI was driving demand for performance and power-efficient compute platforms everywhere.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Market Capitalization: $185 Billion
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. On November 11, Loop Capital initiated coverage of the stock with a Hold rating and $180 price target. The advisory believes that the company needs revenue diversity more than anything, especially considering that Apple is in the early stages of moving to its own baseband modem and that the smartphone market is mature. Loop added that the AI upgrade cycle is showing mixed results, and its review of the moving parts indicates that the stock warrants a neutral stance.
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, Citi analyst Christopher Danely released an investor note on the chip industry, reiterating a Buy rating on AMD stock and noting that semiconductor consensus estimates had declined 11% during earnings and the SOX index sold off 9%, driven mostly by downside from Microchip, NXP Semiconductors, and Intel. However, the analyst believes the selloff is almost over and attention will shift to 2025. Citi estimates global semi sales to be up another 9% year-over-year in 2025, following 17% growth in 2024. The downside from the industrial end market will dissipate soon and the correction in the auto end market should end sometime in the first half of 2025, the analyst told investors in a research note.
7. ASML Holding N.V. (NASDAQ:ASML)
Market Capitalization: $268 Billion
ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. On November 12, investment advisory Bernstein released an investor note on the semiconductor industry, detailing that several semiconductor firms, including ASML, face another possible wave of China export restrictions from US lawmakers. The note contends that potential restrictions could place up to 50% of China WFE at risk. Bernstein analysts, led by David Dai, underlined that companies at risk include ASML, which already guided down 2025 sales to China to drop to 20% of its revenue, during its latest earnings report.
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. Latest reports, published by news platform South China Morning Post, indicate that companies in China are anxiously waiting for updates from TSM about chip supplies amid tightening US curbs on chip exports to China. The US has ordered TSM to halt the supply of advanced AI chips to Chinese firms. Per the reports, Chinese firms are now waiting for TSM to elaborate on whether the US ban on GPU and AI accelerator technology also extends to CPUs, autonomous-driving chips, and high-end smartphone chips.
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. Latest reports, published by news agency Reuters, indicate that Chinese tech giant Baidu has unveiled smart glasses powered by an AI assistant as it prepares to compete with Meta Platforms in AI-capable devices. Like the smart glasses marketed by Meta, the Baidu version also comes with cameras to capture photos and videos and supports voice interactions powered by Ernie. The hardware division of the firm, named Xiaodu, developed the glasses.
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, the tech titan launched a new initiative in India that aims to provide students with hands-on learning in robotics, computing, artificial intelligence, and 3D printing. According to a report from news platform Business Standard, the initiative, named Amazon Future Engineer Makerspace, aims to empower more than 4,000 young innovators by 2025. Amazon has built deep roots in the Asian country. So far, the tech firm has partnered with 11 non-profit organizations to introduce computer science education in more than 17,000 schools.
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. On November 12, news publication The Wall Street Journal reported that Shailesh Prakash, a vice president and general manager for Google News, has resigned from his post. The resignation comes amid ongoing Google disputes with news publications over AI content generation as well as how the search engine drives traffic toward different websites, according to the Journal.
2. Microsoft Corporation (NASDAQ:MSFT)
Market Capitalization: $3.1 Trillion
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. Latest reports, from news platform VentureBeat, indicate that the tech giant has invested money in a new AI startup named Fastino. The startup, based in San Francisco, recently raised $7 million in a pre-seed funding round. The unique thing about this startup is that it is building its own family of enterprise AI models as well as developer tooling. Unlike other large language models, however, the models being developed by Fastino would be capable of running on normal CPUs and would not require the higher computing power required by existing AI models that run on specialized CPUs.
1. NVIDIA Corporation (NASDAQ:NVDA)
Market Capitalization: $3.6 Trillion
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On November 12, Redburn Atlantic initiated coverage of the stock with a Buy rating and $178 price target. In an investor note, the advisory underlined that accelerated computing was further helping to lower the cost of compute as Moore’s law and Dennard scaling slowed. The artificial intelligence coding capabilities developed in the first wave of AI would enable the second wave of accelerated compute by facilitating the update of the foundational software used in general-purpose compute, the advisory told investors in the research note.
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.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
