As the “AI arms race” continues to evolve, countries are increasingly beginning to realize the efforts they need to expend to stay relevant. One such country in the picture that’s stepping up its efforts is Britain. On Monday, November 25, British cabinet office minister Pat McFadden warned that Russian cyber criminals are increasingly targeting countries that support Ukraine, directing that Britain and its NATO allies must stay ahead in the AI arms race. He also stated that neither Britain nor its allies will be intimidated by Russian cyber threats to stop supporting Ukraine.
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The remarks, given at the NATO Cyber Defence Conference in London, also unveil Britain’s plans to set up a new Laboratory for AI (artificial intelligence) security to help create better cyber defense tools and organize intelligence on attacks. McFadden also emphasized businesses and institutions to do “everything they can to lock their digital doors” to protect themselves from what he called an increasingly aggressive Russia.
“While no one should underestimate the Russian aggressive and reckless cyber threat to NATO, we will not be intimidated by it and we will never allow it to dictate our decisions or policies. And we will do everything we can to defend our countries against it”.
McFadden will be sitting down with British businesses to discuss how they can boost their security in a few days.
In other AI news, lawyers for The New York Times and Daily News have revealed that OpenAI engineers accidentally deleted data potentially relevant to a case their company was being sued on. News publishers The New York Times and Daily News had filed a copyright infringement lawsuit against OpenAI. The legal proceedings required OpenAI to let the publishers look through its training datasets for any copyrighted content.
The search, which started on November 1st took a turn on November 14 when lawyers for the publishers alleged that search data stored on one of the virtual machines (after 150 hours of work) had vanished. While some data was recovered, it was without names and folder structure. The lawyers said it “cannot be used to determine where the news plaintiffs’ copied articles were used to build [OpenAI’s] models”.
“News plaintiffs have been forced to recreate their work from scratch using significant person-hours and computer processing time…The news plaintiffs learned only yesterday that the recovered data is unusable and that an entire week’s worth of its experts’ and lawyers’ work must be re-done, which is why this supplemental letter is being filed today”.
-Lawyers said in a letter filed in a US district court on Wednesday, November 20.
OpenAI has been facing multiple lawsuits from publishers related to copyright infringement, even though it stands firm that it only trains its AI models on publicly available data.
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. SoundHound AI (NASDAQ:SOUN)
Number of Hedge Fund Holders: 11
SoundHound AI (NASDAQ:SOUN) is a voice artificial intelligence company.
On November 21, SoundHound AI (NASDAQ:SOUN) and Apivia Courtage, an insurance company, announced that their collaboration to implement conservational AI agents has reached a significant milestone. SoundHound’s Amelia AI Agents have helped Apivia Courtage handle over 100,000 customer calls and reduce the number of inbound queries held directly by the company’s customer relations team by nearly 20%. The partnership, formed in 2023, has helped to field thousands of calls on areas such as medical expense reimbursement and information on insurance guarantee levels.
“Projects like this really show the incredible value AI and automation can deliver, not only to our customers, but also to their customers. With AI agents managing routine customer questions, Apivia Courtage’s employees are now able to focus on more rewarding and valuable aspects of their work. We’re thrilled to support them in delivering thousands of high-quality interactions.”
– Michael Anderson, EVP of Enterprise at SoundHound AI.
14. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 25
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation and is acting as a rising star in meeting the growing energy demands of AI data centers.
On November 22, Piper Sandler analyst Kashy Harrison raised the firm’s price target on Bloom Energy Corporation (NYSE:BE) to $30 from $20 and kept an “Overweight” rating on the shares. The firm finds the recent traction in gaining customers and less risk from changes in the Inflation Reduction Act “appealing”. Once things stabilize in the renewable energy market, companies like Bloom Energy could benefit from equity gains as it is one of the leaders in utility-scale equipment.
13. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NYSE:PLTR) builds agile solutions for data-driven operations and decision-making. Its Artificial Intelligence Platform, AIP, has transformed its business, which is used to test, debug code, and evaluate AI-related scenarios.
On November 25, Wedbush analyst Daniel Ives raised the firm’s price target on Palantir Technologies Inc. (NYSE:PLTR) to $75 from $57 and kept an “Outperform” rating on the shares. The analyst told investors in a research note that it’s time for the broader software space to “get in on the AI party”. Anticipating a surge in use cases, it also anticipates that the enterprise consumption phase will begin in 2025 with the launch of large language models across the board. The firm states that the true adoption of generative AI will be a major catalyst for the software sector.
12. Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 47
Elastic N.V. (NYSE:ESTC) is a search-focused AI company that empowers users to leverage search-driven AI to access real-time answers from their data securely and at scale.
On November 22, Baird upgraded Elastic to “Outperform” from Neutral with a price target of $135, up from $95. The firm considers Elastic as an “artificial intelligence beneficiary”.
“We are upgrading Elastic to Outperform due to a significant unexpected turnaround in execution, evident in Q2′s results, highlighted by strong commitments, healthy consumption, improved win-rates and GenAI-inflection validating our medium-term/long-term thesis.”
11. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 51
AppLovin Corporation (NASDAQ:APP), a prominent marketing software company, leverages its AI-powered platform to provide targeted and automated marketing solutions.
On November 21, Piper Sandler analyst James Callahan initiated coverage of AppLovin Corporation (NASDAQ:APP) with an Overweight rating and a $400 price target. According to the analysts, Applovin’s shares have been “appropriately re-rated” after its AI-driven growth, but there is still an upside. They further state that the company’s technology has driven advertising revenue growth well above the market, and there is room to drive monetization and engagement higher as well. Piper further asserts that Applovin shares justify a premium valuation despite trading slightly above the group average.
10. nVent Electric plc (NYSE:NVT)
Number of Hedge Fund Holders: 55
On November 21, KeyBanc Capital Markets maintained its “Overweight” rating on nVent Electric plc (NYSE:NVT) with a price target of $84.00. Nvent is another stock that stands to benefit from the AI infrastructure buildout. Its liquid cooling solutions work with the latest Nvidia AI server systems.
“The company is “collaborating with NVIDIA on NVL72 reference design architectures…We get the sense NVT’s partnerships/customer base with hyperscalers/co-locators/OEMs extend much deeper than the relationships already communicated.”
-KeyBanc
9. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity.
On November 22, Argus raised the firm’s price target on Palo Alto Networks, Inc. (NASDAQ:PANW) to $443 from $400 and kept a “Buy” rating on the shares. The rating comes after the AI-powered cybersecurity company reported that its total revenue for the fiscal first quarter of 2025 grew by 14% year over year to $2.1 billion, compared with total revenue of $1.9 billion in the year-ago period. The firm states that Palo Alto is a “strong competitor in the highly fragmented but rapidly growing enterprise cybersecurity space”, and raised the firm’s FY25 and FY26 non-GAAP EPS estimates to $6.40 and $7.12, respectively.
8. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 64
Hewlett Packard Enterprise Company (NYSE:HPE) is a US-based technology company specializing in high-performance computing (HPC) systems, AI software, and data storage solutions that help run complex AI workloads.
On November 21, Hewlett Packard Enterprise Company (NYSE:HPE) announced that RWE, a leading renewable energy company, will be using HPE Private Cloud AI to improve weather forecast accuracy and optimize energy resource management. RWE’s AI Research Lab will be leveraging the AI-optimized turnkey private cloud, co-developed with Nvidia, for handling massive data sets and reaching the market vast, enabling them in areas such as inferencing weather models to global energy leadership. The private cloud solution can be deployed in just three simple clicks, allowing researchers to handle massive data required for weather models and information extraction with retrieval-augmented generation (RAG).
“The ability to fine-tune and inference AI-driven weather models will be a key enabler to unlock higher efficiencies for RWE’s renewable energy portfolio and will give them a significant competitive advantage in the market. HPE Private Cloud AI is a unique turnkey solution that enables RWE’s researchers to reach the market quicker and handle massive datasets.”
-Fidelma Russo, EVP & GM, Hybrid Cloud & CTO at HPE.
7. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 71
Snowflake Inc. (NYSE:SNOW) is an artificial intelligence data cloud company enabling customers to create generative AI applications and build large language models.
On November 21, Baird analyst William Power raised the firm’s price target on Snowflake Inc. (NYSE:SNOW) to $180 from $152 and kept an “Outperform” rating on the shares. The firm expressed confidence in the company’s ability to ultimately grow mid-20s%+ in FY2026, as well as foresees opportunities for an enhanced AI and competitive narrative next year.
6. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 78
ServiceNow, Inc. (NYSE:NOW) is a cloud-based, AI-driven platform, that helps enterprises automate multiple management workflows.
On November 25, Needham analyst Mike Cikos maintained a “Buy” rating on ServiceNow, Inc. (NYSE:NOW) and a $1,150.00 price target. Key factors noted during a recent investor meeting have led to this buy rating. A larger renewal cohort is expected in 2025, initially constraining Current Remaining Performance Obligation (cRPO) growth, but expected to potentially benefit from customers transitioning to Xanadu, a platform offering advanced GenAI capabilities. Another factor adding to the positive outlook is the disciplined approach to Pro Plus (the company’s new generative AI SKU) pricing. The pressure on the Subscription Gross Margin in the coming year has already been factored into the analysis.
5. 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. This top Goldman Sachs’s Phase 2 AI Stock benefits from the growing demand for electricity from large AI data centers.
On November 21, KeyBanc Capital Markets’ research team shared its top ideas about which companies will benefit from the AI infrastructure buildout. One of them was Constellation Energy Corporation (NASDAQ:CEG). According to the firm, the C3Q24 earnings season largely continued to showcase robust demand trends around the data center hardware and infrastructure theme. In particular, the firm has an “Overweight” rating and a target of $298 for Constellation’s stock. They have cited the recent deal to restart a Pennsylvania nuclear reactor to provide power to Microsoft as a positive development for Constellation Energy Corporation (NASDAQ:CEG).
“Constellation Energy is continuing negotiations with a number of potential data center customers for co- location deals, and is making significant progress on contracting.”
-KeyBanc research team
4. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 97
Vistra Corp. (NYSE:VST), a power generation company, is leveraging its nuclear energy capabilities to support the energy demands of artificial intelligence (AI) operations.
On November 22, Morgan Stanley raised the firm’s price target on Vistra Corp. (NYSE:VST) to $169 from $135 and kept an “Overweight” rating on the shares. Since utility stocks didn’t perform well in October, the firm lowered its price for some of these stocks in its North America Regulated & Diversified Utilities / IPPs coverage, the analyst told investors. Moreover, the firm has come incrementally negative on California after meetings at the EEI Financial Conference due to political and financial risks and limited data center growth.
3. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese online retailer that leverages AI in its e-commerce business, having recently launched more than a hundred new AI models as part of its AI push.
On November 22, the MarcoPolo team at Alibaba Group Holding Limited (NYSE:BABA) International Digital Commerce announced that it has launched Marco-o1. The Marco-o1 is an advanced large language model (LLM) built for addressing reasoning needs in open-ended problem-solving tasks. It aims to rival OpenAI’s o1 model and is reportedly on par with Open AI’s 01 preview on benchmarks such as AIME and MATH that evaluate the logical and mathematical reasoning skills of LLMs. Marco-1 is available on GitHub & Hugging Face and aims to advance AI models to tackle intricate, real-world problems. It is based on the Qwen2-7B-Instruct architecture, enhanced using a combination of filtered Open-O1 CoT dataset, Marco-o1 CoT dataset, and Marco-o1 Instruction dataset.
2. Salesforce Inc (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce Inc (NYSE:CRM) is a leader in CRM software and has emerged as a promising AI stock after the launch of Agentforce.
On November 22, UBS raised the firm’s price target on Salesforce Inc (NYSE:CRM) to $360 from $275 and kept a “Neutral” rating on the shares. The rating follows the firm’s analysis of Salesforce’s new Agentforce offering as well as the company’s larger opportunity to sell artificial intelligence agents for customer support tasks.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a multinational corporation and technology company that designs, manufactures, and markets smartphones, tablets, PCs, wearables, and accessories worldwide. Apple Intelligence is the company’s personal intelligence system.
On November 22, Bloomberg reported that Apple Inc. (NASDAQ:AAPL) is working to develop a more conversational version of Siri, Apple’s virtual assistant that uses voice recognition and artificial intelligence to perform tasks and answer questions. The effort aims to catch up with OpenAI’s ChatGPT and other voice services. The new Siri, dubbed LLM Siri, will be reportedly using more advanced large language models so that users can engage in back-and-forth conservations, handle complex requests, and integrate features from Apple Intelligence. The new Siri will be released as early as spring 2026.
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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