No conservation about artificial intelligence today stands complete without the mention of DeepSeek. As reported by The Information, the Chinese AI startup that has startled the world of AI with its self-proclaimed cheaper and more efficient AI models is now looking for outside funding. The startup has drawn interest from names such as Alibaba and state funds, the report noted. These low-cost AI models that DeepSeek has presented recently have stirred up investor skepticism, making it quite evident that China is leaving no stone unturned to keep up in the AI arms race.
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With fame, however, comes challenges. For DeepSeek, the surge in demand has caused outages at the small startup. Due to this reason, the company needs more AI chips and servers so that it can handle the fast-growing usage of its models, all while supporting model development. According to the report, funds that have contacted DeepSeek include China Investment Corp and the National Social Security Fund. It further noted that the startup’s executives and hedge fund parent, High-Flyer Capital Management, are also discussing the potential shift to building a business that generates revenue, eventually profiting from research.
The move is in line with China’s efforts to bolster the country’s economy and advance its technological capabilities. This has been made evident from China’s President Xi Jinping’s recent meeting with private sector business leaders, including Alibaba co-founder Jack Ma and Liang Wenfeng, founder of DeepSeek.
“It’s a tacit acknowledgement that the Chinese government needs private-sector firms for its tech rivalry with the United States. The government has no choice but to support them if it wants to compete with the United States.”
-Christopher Beddor, deputy China research director at Gavekal Dragonomics in Hong Kong.
In a similar move announced before this news, OpenAI also plans to revamp its for-profit arm into a public benefit corporation. The move intends to ease restrictions imposed by its current non-profit parent and also increase investments.
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. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 37
SentinelOne, Inc. (NYSE:S) is one of the leading artificial intelligence-powered cybersecurity providers. On February 19, Hamza Fodderwala from Morgan Stanley maintained a “Hold” rating on the stock with a price target of $27.00. Fodderwala’s hold rating stems from the pricing pressures from competitors that SentinelOne is facing. This is despite expectations for growth in products such as Cloud Security and Purple AI. Since larger platform players can offer higher discounts, it is restraining the company from capturing a considerable market share.
Moreover, the company is also dealing with rising cloud hosting costs and increased investment efforts, leading to declining gross margins. The forecasted EBIT margin for Fiscal Year 2026 is expected to stay flat, a point of concern for the firm. Overall, even though the stock valuation may look attractive, declining margins and growth challenges have led the analyst to maintain a hold rating.
14. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 47
Fortinet, Inc. (NASDAQ:FTNT) is a cybersecurity company that provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products. On February 19, the company announced significant enhancements to FortiAnalyzer, Fortinet’s powerful and streamlined log management, analytics, and reporting platform that offers broad coverage for on-premises and cloud environments.
The enhancements have transformed FortiAnalyzer into an AI-driven security operations platform specifically tailored for teams and midsize enterprises facing cyber skills shortages. Some enhancements that the FortiAnalyzer incorporates are a unified data lake for centralized visibility, advanced threat detection and AI-powered analysis, automated incident response, and embedded GenAI assistance.
“Security teams today are stretched thin, yet they’re expected to defend against increasingly complex and targeted threats. With the latest advancements in FortiAnalyzer, we’ve eliminated the need for additional SecOps tools, making it the ideal turnkey AI-driven security operations platform supporting on-premises and cloud environments. This is a game-changer for lean security teams, allowing them to enhance threat detection, automate incident response, and streamline critical security operations functions from a single platform.”
-Nirav Shah, Senior Vice President, Products and Solutions at Fortinet.
13. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 54
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country. On February 19, Bernstein raised the firm’s price target on the stock to $108 from $87 and kept a “Market Perform” rating on the shares. According to the firm, Baidu has reported in-line results, with AI Cloud performing particularly well. The firm noted that AI Cloud grew 26%, and that Baidu has also discussed about more buybacks this year – with up to $3.3B quota to spend till December 2025.
12. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 70
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers. On February 19, Vivek Arya from Bank of America Securities reiterated a “Buy” rating on the stock with an associated price target of $150.00. The firm is optimistic about Marvell given its advancements in AI technology and its strategic partnerships. In the upcoming quarters, Arya anticipates improved financial performance on the back of its strong presence in AI optics.
Marvell is also well-established in custom AI application-specific integrated circuits (ASICs), predominantly with major cloud service providers like Amazon Web Services, Google, and Microsoft. Moreover, its increasing cloud capital expenditures and fast-growing total addressable market (TAM) for AI further support its robust pipeline and execution strength. Arya also highlighted the company’s potential to capture a larger share of the AI accelerator market, potentially leading to substantial revenue gains over the next few years. With the Investor Day coming up, there is also a chance for further positive developments.
11. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection. One of the biggest analyst calls for Wednesday, February 19, was for Crowdstrike Holdings Inc. Morgan Stanley reiterated the stock as “Overweight” and raised its price target to $429 per share from $390. The firm’s channel checks have revealed that Crowdstrike is on the road toward a faster recovery post the July outage. It also noted that despite the recent run in share price, the firm sees further upside for the stock.
“Our checks indicate a faster than expected recovery for CRWD post the July outage.”
Crowdstrike heavily relies on artificial intelligence as a core component of its cybersecurity platform Falcon. Ahead of its earnings report, Truist has also raised the firm’s price target on the stock to $460 from $385 and kept a “Buy” rating. Stating similar findings, the firm said that Crowdstrike’s Q3 results were solid, driven by the strong adoption of its AI-powered platform and traction with Falcon Flex deals.
10. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 78
Constellation Energy Corporation (NASDAQ:CEG) is an energy provider specializing in clean, carbon-free energy solutions. On February 19, the leading energy company reported its financial results for the fourth quarter and full year 2024. It beat Wall Street estimates for fourth-quarter profit driven by lower expenses and rising demand for power. The energy company posted adjusted earnings per share of $2.44 for Q4, topping the analyst consensus of $2.19. Meanwhile, revenue for the quarter came in at $5.38 billion, beating estimates of $4.75 billion.
Looking ahead, it has also reaffirmed its adjusted earnings guidance for 2025 of $8.90-$9.60 per share, while analyst consensus was $9.43. Key developments for the company include its definitive agreement to buy Calpine largely driven by the rapid growth of AI data centers, completing $1 billion in share purchases, and signing of a 20-year power purchase agreement with Microsoft, supporting the launch of the Crane Clean Energy Center.
“The 14,000 women and men of Constellation remain the driving force behind our strong operational and financial performance in 2024. Whether it’s AI and the many technologies of the future, or the everyday needs of families and businesses across our nation, Constellation provides the reliable and sustainable energy needed today and is investing billions of dollars to power our country for decades to come. We know that reliable, affordable and sustainable power is the key to America’s freedom and the life-blood of our economic prosperity, and over the past three years we have built a company that can meet that need for power with unmatched capabilities. As we look forward to closing the Calpine acquisition later this year, Constellation will create new capabilities that will increase product offerings across America to help families and businesses thrive and grow. There has never been a more exciting time for our country and for the energy industry. We are privileged to be at the heart of it all.”
-Joe Dominguez, president and CEO, Constellation.
9. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On February 18, Dan Levy from Barclays maintained a “Hold” rating on the stock with a price target of $325.00.
On the same day, analyst Adam Jonas from Morgan Stanley maintained a “Buy” rating on the stock and kept the price target at $430.00. The analyst views the company as “one of the leading enablers of humanoid robotics in the Western world”. He expects growing investor interest in Tesla’s role in this potential “multi-trillion” addressable end-market, pointing out that its current valuation of Tesla does not factor in any value for Optimus, its humanoid robot currently under development.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops semiconductors, providing processors and graphics technologies for gaming, data centers, and AI-driven high-performance computing. On February 18, Vultr, a privately-held cloud infrastructure company, announced that it has deployed AMD’s Instinct™ MI325X GPUs in its Chicago data center region.
The deployment of AMD GPUs makes Vultr the first cloud provider to offer these cutting-edge AI solutions. The news follows Vultr’s growth financing at a $3.5 billion valuation and an expanded collaboration with AMD to provide access to AMD Instinct™ MI300X GPUs and the ROCm™ open software ecosystem. Through the AMD-Vultr collaboration, businesses have the power to build and scale AI-native applications on robust cloud infrastructure.
“Designed for exceptional performance and efficiency, the AMD Instinct MI325X accelerators excel in demanding AI tasks such as foundation model training, fine-tuning, and inferencing. With the addition of the AMD Instinct MI325X, Vultr is empowering businesses with cutting-edge AI technology to harness the necessary computational power and efficiency to drive AI advancement and accelerate growth.”
-Negin Oliver, corporate vice president of business development, Data Center GPU Business Unit, AMD.
7. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce Inc (NYSE:CRM) is a cloud-based CRM company that has gained popularity after the launch of its AI-powered platform called Agentforce. On February 19, Stifel Nicolaus analyst J. Parker Lane maintained a “Buy” rating on the stock and set a price target of $425.00. The firm’s optimism stems from growing interest and investment in its AI-powered Agentforce product which various customers are testing and deploying at the moment.
Even though Agentforce is in the preliminary phase, it has still garnered significant interest. To encourage its broader adoption this year, the company is actively promoting it within its customer base and exhausting resources toward research and development (R&D) and go-to-market (GTM) strategies. Looking ahead to the company’s earnings call, the firm anticipates updates on the customer base for Agentforce, the adoption of Data Cloud services, and also when these initiatives will start contributing to Salesforce’s financial performance in a significant manner.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company. One of the biggest analyst calls for Wednesday, February 19, was for Apple Inc. Bank of America reiterated the stock as “Buy”, stating that Apple may need to raise prices to offset any tariff impact.
“We est. that Apple sells 50mn iPhones, 15mn iPads, and 10mn Macs in the U.S. per year. We assume that 100% of devices sold in the U.S. will be subject to a 10% tariff.”
In another note issued on February 18, Evercore ISI reiterated the stock as “Outperform” with a $260 price target. Talking about the iPhone SE, the firm noted that the phone will feature notable hardware upgrades, and come at a slightly higher price tag of $499 versus $429 for the last launch. It is also expected to support Apple Intelligence.
However, Apple has confirmed that their new phone is the iPhone 16e, featuring the A18 chip, Apple Intelligence, extraordinary battery life, and a 48MP 2-in-1 camera system. Pre-orders begin Friday, February 21, with availability beginning Friday, February 28.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On February 19, UBS analyst Timothy Arcuri said in a research note that he expects Nvidia to deliver solid results and guidance at or above expectations, particularly for total revenue and data center performance. Investor sentiment should shift from bullish to mixed, the analyst noted.
Looking ahead, the firm anticipates a “very strong” Blackwell ramp through the calendar year 2025 and maintains its high-on-street revenue and EPS estimates. UBS maintained its “Buy” rating and $185 price target on the stock.
“We expect a strong set of results with guidance that is in-line to better than FQ1 (April) investor bogeys of ~$42.5-43B for total revenue and ~$38.5B-39B for data center.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. The company has just introduced its AI co-scientist today, February 19th. Sharing the news on its blog, Google stated that the AI tool will act as a virtual collaborator for biomedical scientists. Tested at the Stanford University in the U.S. and Imperial College London, the tool will empower scientists to use advanced reasoning, helping them synthesize vast amounts of literature and generate novel hypotheses, the company said.
The multi-agent AI system is built on Gemini 2.0 and mirrors the reasoning process underpinning the scientific method. It will generate novel research hypotheses, a detailed research overview, and also experimental protocols. Scientists will be able to interact with these systems, helping them accelerate the clock speed of scientific and biomedical discoveries. Over time, the tool will also improve solutions generated by experts.
“While this is a preliminary finding requiring further validation, it suggests a promising avenue for capable AI systems… to augment and accelerate the work of expert scientists”.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On February 14, the company announced one of its most ambitious subsea cable endeavors yet: Project Waterworth. The project, once completed, will span across five major continents and will be the longest subsea cable project in the world using the highest-capacity technology available.
Providing “industry-leading connectivity” to the U.S., India, Brazil, South Africa, and other key regions, Project Waterworth will enable greater economic cooperation, digital inclusion, and opportunities for technological development within the said regions. This multi-billion dollar, multi-year investment will scale and strengthen the world’s digital highways by opening three new oceanic corridors leading to high-speed connectivity essential to driving AI innovation worldwide.
“AI is revolutionizing every aspect of our lives, from how we interact with each other to how we think about infrastructure – and Meta is at the forefront of building these innovative technologies. As AI continues to transform industries and societies around the world, it’s clear that capacity, resilience, and global reach are more important than ever to support leading infrastructure. With Project Waterworth we can help ensure that the benefits of AI and other emerging technologies are available to everyone, regardless of where they live or work”.
-Meta
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On February 19, the company announced its first quantum computing chip, Majorana 1. Quantum computing can solve complex problems within seconds, potentially leading to breakthroughs in medicine, chemistry, and many other fields.
The challenge of quantum computers, however, is that the fundamental building block called a qubit, is incredibly fast, extremely difficult to control, and also prone to errors. Microsoft said that its Majorana 1 chip is less prone to those errors than rivals. Powered by the new Topological Core architecture, Microsoft expects the computing chip to realize quantum computers that can solve meaningful, industrial-scale problems in a matter of years.
According to the company, the power of quantum computing, combined with AI tools, would allow scientists and engineers to design new materials for various industries with unprecedented accuracy.
“Any company that makes anything could just design it perfectly the first time out. It would just give you the answer. The quantum computer teaches the AI the language of nature so the AI can just tell you the recipe for what you want to make.”
-Matthias Troyer, Microsoft Technical Fellow
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com Inc (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. On February 18, The Information revealed that Amazon is shutting down its TikTok-style shopping feed Inspire. Inspire was launched in 2022 and was located in the Amazon app. As such, the move marks another failed attempt by the company to break into social commerce. Amazon has admitted that product discovery often happens off-platform. In other words, Amazon realizes that customers seek inspiration in social feeds – not just on Amazon itself.
“Beyond Amazon, we know that customers look for inspiration and product recommendations in social feeds”.
In turn, the company has pointed toward Rufus, its AI shopping assistant, as an alternative discovery tool.
“Customers can continue to get inspiration across the Amazon store with Shop by Interest, the new Window Display on homepage, Creator storefronts, curated collections, and more. In addition to these features and our powerful search engine, we make it easy to find and discover products through our AI features such as visual search, AI Shopping Guides, and our shopping assistant, Rufus.”
While we acknowledge the potential of AMZN 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
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