Artificial intelligence continues to achieve remarkable breakthroughs, yet its latest contribution might come as a surprise to many. According to a report by CNBC, AI can solve one of the biggest problems facing the USA: its skyrocketing fiscal deficit. According to three economists from the Brookings Institution, artificial intelligence could prove a positive “critical shock” for the country’s fiscal health.
READ NOW: 15 Buzzing AI Stocks Making Headlines and 15 AI Stocks to Watch: News and Analyst Ratings
The Center on Regulation and Markets at Brookings released a working paper last month stating that under the most optimistic scenario, AI could reduce the annual U.S. budget deficit by as much as 1.5% of gross domestic product by 2044. This would lower annual budget deficits by roughly one-fifth at the end of the 20 years.
“The use of AI presents the rare — possibly unique — opportunity to expand access to health care information and services while simultaneously reducing the burden on the conventional health care system”.
– Paper’s authors, Ben Harris, Neil Mehotra and Eric So.
While adopting AI in healthcare is optimistic, Ajay Agrawal, a professor at the University of Toronto’s Rotman School of Management, reveals how economists’ outlook on AI and healthcare is “a mix of enthusiasm and despair”.
“Enthusiasm because there’s probably no sector that stands to benefit more from AI than health care. … But there’s friction due to regulation, due to incentives — because of the way things are structured and how people are paid for things — and friction due to the associated risks and liabilities”.
-Agrawal said.
In other news, CNBC reported that OpenAI has allowed its employees to sell about $1.5 billion worth of shares in a new tender offer to SoftBank. Current and former OpenAI employees will be able to cash out their shares this way, while the Japanese tech conglomerate will be able to get a larger slice of the pie of the AI startup. The tender offer follows the persistence of SoftBank founder Masayoshi Son after he made a $500 million investment in OpenAI’s recent funding round, also reflecting his growing interest in AI.
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. Laser Photonics Corporation (NASDAQ:LASE)
Number of Hedge Fund Holders: 2
Laser Photonics Corporation (NASDAQ:LASE) is an AI-enabled laser company. Their CleanTech Robotic Cell Enclosure is an AI-capable system designed to automate laser cleaning processes.
On November 27, Laser Photonics Corporation (NASDAQ:LASE) announced that preorders for its soon-to-be-launched CleanTech Industrial Roughening Laser 3060 (CTIR-3060) are now open. The new CTIR-3060 is an industrial-grade fiber laser solution for laser cleaning and surface conditioning designed for aerospace and defense applications. The system can work as a standalone unit or be integrated into a CleanTech Robotic Cell for an AI-ready automated solution.
“Our team has worked tirelessly to develop a next-generation high-powered pulsed laser that is ideal for thermally sensitive applications. With the CleanTech CTIR-3060, operators can now quickly and effectively clean and process delicate and thin material with little to no damage to the underlying substrate. We are excited to continue leading the way in laser technology innovation and look forward to the future”.
– Wayne Tupuola, chief executive officer of Laser Photonics.
14. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 36
SAP SE (NYSE:SAP) is a market leader in ERP software. It leverages AI to enhance its enterprise resource planning (ERP) solutions.
On November 27, SAP SE announced the November release of SAP Signavio Process Transformation Suite, a cloud-based software suite designed for business process management (BPM). Joule, SAP’s AI Copilot, is now fully integrated into the SAP Signavio Process Collaboration Hub and is available to SAP Signavio customers in Germany and the U.S. through a dedicated SAP Early Adopter Care program. This will allow users to perform tasks like finding information, performing actions, and gaining insights using simple commands. In addition, SAP Signavio solutions will offer text to insights capability with the new AI-assisted process analyzer. This capability is available via a beta program offered to SAP Signavio Process Intelligence customers.
13. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 42
HP Inc. (NYSE:HPQ) is a technology company and Quant AI stock specializing in personal computing and printing solutions.
On November 27, JP Morgan analyst Samik Chatterjee maintained an “Overweight” rating on HP Inc. (NYSE:HPQ) and lowered the price target to $40 from $41. The analyst noted near-term challenges in the PC market including higher memory costs and competitive prices. However, there are recovery opportunities driven by pent-up demand, Windows 11 refresh cycles, and AI PC adoption by enterprise customers in 2025. The print segment surpassed expectations with $4.5 billion in revenue and improved margins of 19.6%, while personal systems (PS) revenue slightly missed expectations at $9.6 billion. The analyst considers long-term growth drivers for the company to be enterprise PC replacements tied to Windows 10’s end-of-life and AI PC adoption.
12. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of AI systems. Palantir Technologies Inc. (NASDAQ:PLTR) is one of 2024’s best-performing AI stocks. On November 26, the company began trading on the NASDAQ exchange, reinforcing the company’s image as a strong force in the AI industry. This is because the NASDAQ is mostly affiliated with the tech sector. Following the shift, Bank of America analyst Mariana Perez Mora has raised the price target for the AI darling from $50 to a street-high of $75 and maintained a “Buy” rating on the stock.
11. Juniper Networks, Inc. (NYSE:JNPR)
Number of Hedge Fund Holders: 47
Juniper Networks, Inc. (NYSE:JNPR) is a leader in secure, AI-Native Networking that delivers the best and most secure user experiences from the edge to the data center and cloud.
On November 26, Juniper Networks, Inc. (NYSE:JNPR) and Finnish telecom and digital service provider Elisa Oyj announced a collaboration for the world’s first deployment of 800Gbps Ethernet services over 800ZR coherent transceivers. This collaboration will allow Elisa to enhance its network infrastructure and set the stage for more scalable and efficient mobile and optical fiber networks across the country. Juniper’s networking solutions will enable Elisa to increase the speeds and capacity of their optical fiber and mobile networks. As AI and cloudification progress, more and more data will be transferred between data centers, requiring them to develop their backbone network.
“Juniper is proud to serve Elisa Oyj with our innovative 800G coherent CORA solutions as they lead the way to a truly notable and exciting achievement, the world’s first 800Gbps coherent ZR service deployment. This milestone underscores our shared commitment to advance digital infrastructure throughout the world, while ensuring a robust, sustainable and future-proof network for Finland’s expanding data demands and exacting user expectations”.
-Steffen Gienger, Vice President, Service Provider, EMEA, Juniper Networks.
10. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 51
AppLovin Corporation (NASDAQ:APP) operates a prominent AI-powered marketing platform. On November 27, Piper Sandler analyst James Callahan CFA maintained a “Buy” rating on AppLovin Corporation (NASDAQ:APP) and set a price target of $400.00. The rating comes after a series of meetings and discussions with the company’s CFO, Matt Stumpf, and Head of Investor Relations, David Hsiao. Investor sentiment is mixed-positive, as many are still familiarizing themselves with the company’s prospects after its strong AI-driven Q3 performance. The firm’s discussion with the management has led to the Overweight rating, where topics such as the CFO’s approach to financial leadership, potential optimizations in the company’s business model, and opportunities within E-Commerce were discussed. There is also confidence in the company’s direction and position in the competitive mobile app market.
9. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 55
Autodesk, Inc. (NASDAQ:ADSK), a multinational software corporation, leverages generative AI technology to drive innovation across the design, construction, manufacturing, and entertainment industries.
On November 26, Autodesk, Inc. (NASDAQ:ADSK) delivered strong third-quarter results beating estimates on the top and bottom lines. In Q3, revenue reached $1.57 billion, surpassing the estimated $1.56 billion, and the adjusted EPS was $2.17, exceeding the forecast of $2.12. The company anticipates full-year revenue of $6.12 billion to $6.13 billion versus estimates of $6.11 billion. Revenue from AutoCAD and AutoCAD LT grew by 8%, while AEC and manufacturing segments saw increases of 12% and 16%, respectively. The company incorporates AI into AutoCAD and AEC to optimize design processes, enhance automation, and improve efficiency.
8. Western Digital Corporation (NASDAQ:WDC)
Number of Hedge Fund Holders: 66
Western Digital Corporation (NASDAQ:WDC) develops, manufactures, and sells data storage devices and solutions and stands to gain from a rise in SSD demand, particularly for AI-related tasks.
On November 26, TD Cowen analyst Krish Sankar maintained a “Buy” rating on Western Digital Corporation (NASDAQ:WDC) and set a price target of $80.00. The company’s performance and strategic positioning have led to the buy rating. According to the analysts, the company’s HDD segments reveal positive metrics, specifically superior gross and net profit margins, compared to its closest competitor STX. Moreover, the company’s strategic initiatives in research and development are also boosting its competitive edge. There are some concerns regarding the Flash business’s valuation and free cash flow, but the overall financial health and potential for price stabilization in the NAND market contribute to a positive long-term outlook. Lastly, Sankar believes the stock has the potential to reach the higher end of its valuation range.
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 27, Susquehanna raised the firm’s price target on Marvell Technology, Inc. (NASDAQ:MRVL) to $110 from $95 and kept a “Positive” rating on the shares. Previewing the company’s quarterly results, the firm expects good performance from Inphi and custom ASIC due to strong AI demand. Moreover, positive commentary about Carrier Infra and Enterprise Networking further supports the optimistic narrative.
6. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in cloud-delivered endpoint and cloud workload protection. On November 27, Baird analyst Shrenik Kothari raised the firm’s price target on CrowdStrike Holdings, Inc. (NASDAQ:CRWD to $390 from $375 and kept an “Outperform” rating on the shares. According to Baird, Crowdstrike has delivered a strong Q3 powered by its growth of Falcon Flex, the company’s definitive AI-native cybersecurity platform. However, some challenges were also highlighted such as extended sales cycles and temporary volatility in ARR/FCF momentum.
5. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 84
Workday, Inc. (NASDAQ:WDAY) provides enterprise cloud applications. The Workday platform is built with AI to help customers elevate people, supercharge work, and move their business forward.
On November 27, Goldman Sachs analyst Kash Rangan lowered the price target on Workday, Inc. (NASDAQ:WDAY) to $300.00 from $305.00 and maintained a “Buy” rating on the stock. The firm notes a slight dip in Workday’s Q4 growth due to delayed large-deal revenue recognition and compression in 1Q25 from leap-year comparisons. Nevertheless, it remains cautiously optimistic that the macro environment will improve. Additionally, Workday’s AI products are also gaining traction, with 30% of third-quarter customer expansions incorporating AI solutions. This has in turn led to reduced turnover and boosted selling prices. Even though delayed revenue recognition was unexpected, it is expected to drive long-term benefits. The analyst also added that stable growth and margin improvements can lead to a positive re-rating of the stock.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA), an American multinational automotive and clean energy company. Tesla is an AI player as it uses artificial intelligence to drive advancements in autonomous driving, robotics, and smart manufacturing.
On November 27, Pony AI, a Chinese self-driving car company, held its initial public offering (IPO) in New York. The company manufactures sensors and software for self-driving vehicles. It claims to use AI-trained software with sensing hardware including global positioning systems, optical cameras, radar, and laser-based radar (lidar) to operate its self-driving vehicles. Its AI approach is similar to Tesla’s self-driving technology. Pony AI is a competitor of Tesla, Inc. (NASDAQ:TSLA), and its entry has the potential to heighten competition in the autonomous vehicle space and impact market dynamics.
3. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Alibaba Group Holding Limited (NYSE:BABA) is an online retailer leveraging AI in its e-commerce business. It has recently launched more than a hundred new AI models as part of its AI push.
On November 25, DBS analyst Sachin Mittal maintained a “Buy” rating on Alibaba Group Holding Limited (NYSE:BABA) after the company released its second-quarter results for FY25. The company’s Q2 results were strong, particularly in its cloud and e-commerce sectors. The company’s revenue reached ¥236.5 billion, a 5% year-on-year increase. Alibaba’s Taobao and Tmall also managed 1% revenue growth despite a challenging retail environment. The company’s Cloud Intelligence Group reported ¥29.6 billion in revenue, marking a 7% year-over-year growth. The Cloud Intelligence Group is a global leader in cloud computing and artificial intelligence. The growing demand for public cloud and AI-driven products is also expected to achieve a consistent 9% CAGR (compound annual growth rate) from FY24 to FY27. Overall, Mittal expects Alibaba’s earnings to reach their lowest point by the fiscal year ending in March 2025, after which he expects a rebound in earnings, driven by growth in the company’s Cloud and E-commerce divisions.
2. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce Inc (NYSE:CRM) is a cloud-based CRM company that has gained traction after the launch of its AI-powered platform called Agentforce.
On November 27, Citi analyst Tyler Radke raised the firm’s price target on Salesforce Inc (NYSE:CRM) to $368 from $290 and kept a “Neutral” rating on the shares. According to the firm, the AI-powered platform Agentforce has driven the stock by 35% since Dreamforce, garnering significant attention and positive feedback. The firm’s checks also imply slightly better demand trends heading into the Q3 report on December 3. Moreover, the firm also expects the company’s growth and revenue to remain in the high-single-digits and considers Q3 and Q4 estimates achievable.
1. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) is a technology company that designs, develops, and supplies semiconductor and infrastructure software solutions. Its chips help in building AI data centers.
On November 25, Broadcom Inc. (NASDAQ:AVGO) and Arrow Electronics signed a new agreement where Broadcom authorized Arrow for the distribution of VMware solutions in the U.S. and Canada. VMware is a private cloud solution that delivers the security and agility enterprises need, supported by technologies for applications, edge infrastructure, and private AI. The agreement will enable Arrow to deliver VMware private cloud infrastructure solutions through its ArrowSphere platform, including VMware Cloud Foundation, VMware vSphere Foundation, VMware vSAN, and VMware vSphere Standard. In turn, channel partners will be able to gain immediate access to Arrow’s personalized assistance, training programs, and certified resources as part of its high-quality support services that span the commercial IT lifecycle.
“Arrow brings all the right capabilities to support the evolution of our go-to-market strategy within North America. Arrow’s extensive global reach and influence, coupled with its local expertise, is part of our cohesive strategy to create value for our channel partners and customers.”
– Cynthia Loyd, vice president of Global Partners and Commercial Sales at Broadcom.
While we acknowledge the potential of AVGO 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 AVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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