In this article, we discuss the 15 AI stocks trending on financial media.
The AI revolution has disrupted the technology industry, propelling memory chip firms into the spotlight after decades spent in the shadows of semiconductors and software giants. In order to understand the importance of memory chips to AI, investors should reflect on the centrality of data storage to AI technology. Memory chips store data that is used by AI firms for training models and storing parameters. News agency Reuters recently reported that Kioxia, a Japanese memory chip firm, is set to debut on the stock market with an initial valuation of close to $5 billion. In October, the firm had postponed plans for an IPO at double this valuation.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Private equity firm Bain Capital is one of the most prominent backers of Kioxia. The latter is among the largest makers of NAND flash memory in the world. NAND quality directly affects the processing speed and overall performance of AI models. Bain led a consortium to acquire Kioxia from Toshiba for $18 billion in 2018. The private equity firm has tried twice to get the memory chipmaker listed on the stock exchange, once in 2018 and then again earlier this year.
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).
Stocks
AI Stocks Trending on Financial Media
15. GlobalFoundries Inc. (NASDAQ:GFS)
Number of Hedge Fund Holders: 22
GlobalFoundries Inc. (NASDAQ:GFS) provides a range of mainstream wafer fabrication services and technologies worldwide. On November 22, Lightmatter, a photonics computing firm, announced that it would be extending a manufacturing partnership with GlobalFoundries. Tech news platform Data Center Dynamics reports that Lightmatter takes compute units or networking chips and builds them directly onto silicon photonics. Per the platform, this allows for improved escape bandwidth, the data transfer rate at which information can leave a computing component and connect to other components outside of its package.
14. Fabrinet (NYSE:FN)
Number of Hedge Fund Holders: 42
Fabrinet (NYSE:FN) offers optical packaging, along with precision optical, electro-mechanical, and electronic manufacturing services. The company produces fiber-optic cables that power telecommunications, AI data centers, and the global Internet infrastructure. Rosenblatt analyst Mike Genovese recently released an investor note on the company, noting that a competitor firm downgraded Fabrinet to Sell this week due to the concern that Amazon is unbundling Optical and GPU purchases, but Rosenblatt does not agree with the downgrade as it views this unbundling trend as known about for a long-time. The advisory thinks Fabrinet’s business with Nvidia should be fine, despite Amazon’s moves, because there are now about a dozen massive AI data center spenders that say they will invest as much as necessary to be the firm mover or leader in new generative AI markets.
13. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 47
Fortinet, Inc. (NASDAQ:FTNT) provides cybersecurity and convergence of networking and security solutions worldwide. The Fortinet SecOps platform offers the broadest range of sensors that utilize AI and other advanced analytics to continuously assess cyberthreats. The company recently launched a standalone data loss prevention offering. This was made possible by the use of AI tools underpinned by technology inherited via the acquisition of startup Next DLP earlier this year, per news platform MSSP Alert.
12. Digital Realty Trust, Inc. (NYSE:DLR)
Number of Hedge Fund Holders: 52
Digital Realty Trust, Inc. (NYSE:DLR) brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. On November 21, Stifel analyst Erik Rasmussen raised the price target on the stock to $205 from $195 and kept a Buy rating on the shares. After meeting with management at the Nareit REITworld conference, the advisory continues to see the company in a strong position to deliver on expectations for accelerated growth heading into 2025. Meanwhile, favorable market fundamentals and the company’s well-positioned portfolio can support long-term sustainable growth, Stifel added.
11. Cadence Design Systems, Inc. (NASDAQ:CDNS)
Number of Hedge Fund Holders: 53
Cadence Design Systems, Inc. (NASDAQ:CDNS) provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. On November 22, Wells Fargo initiated coverage of the stock with an Overweight rating and $350 price target. The advisory thinks a ramping hardware cycle into 2025 can drive accelerating revenue growth for Cadence, which is not fully factored into Street estimates. Cadence is well positioned longer term to benefit from artificial intelligence monetization, the advisory told investors in a research note.
10. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix, Inc. (NASDAQ:EQIX) is a California-based real estate trust that operates data centers and other technology assets. The firm helps AI businesses host AI infrastructure for AI model development and offers network-rich interconnected locations for AI inference. On November 21, Argus analyst Marie Ferguson raised the price target on the stock to $975 from $900 and kept a Buy rating on the shares. Equinix has sequentially topped consensus in 2024 and after the management upped its 2024 revenue and AFFO guidance the projected earnings growth rate for 2024 is at the top for the REIT peers the firm covers, the advisory noted. While shares have been volatile recently, reflecting Tech sector rotation, the advisory sees positive momentum for the shares based on fundamental growth and positive momentum in the income sector and thinks the data storage business is a good investment, with strong growth prospects in the EMEA and APAC regions offsetting slower growth in North America.
9. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 60
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. On November 21, Citi analyst Asiya Merchant underlined that Dell would be one of the firms that benefit from strong earnings of NVIDIA, as the demand read through was positive for enterprise server OEMs. Other companies that would benefit from the positive server demand were HPE and Super Micro Computer, per the analyst.
8. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. The AI-capable chips of QUALCOMM are now making their way into cars and IoT devices, after powering smartphones globally. On November 21, JP Morgan analyst Samik Chatterjee maintained an Overweight rating on the stock with a price target of $200. In an investor note, the analyst said that Qualcomm’s IoT and Automotive Diversification Investor Day surpassed investor expectations in terms of potential diversification away from smartphone market by end of the decade, with the target of reaching 50% non-smartphone QCT exposure by FY30, vs. JPM expectation of 45% heading into the event.
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. Geekbench AI, a cross-platform AI benchmark that uses real-world machine learning tasks to evaluate AI workload performance, recently leaked a new AMD processor in the form of an engineering model. According to initial reports, the processor is expected to belong to the Krackan Point family and is targeted at more affordable AI-powered devices. It has 6 cores divided into two groups or clusters with 3 cores each, per hardware platform eTeknix.
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. Bank of America analyst Brad Lin recently penned an investor note on the AI industry, noting that the strong earnings results of chipmaker NVIDIA underscore robust structural Al demand, with limited digestion periods as adoption accelerates. Per the analyst, NVIDIA’s intact one-year cadence for datacenter GPU development is particularly favorable for TSMC, supporting content growth. The continuous scaling of Al models strengthens TSMC’s leading-edge node demand and industry leadership, the analyst noted.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. Latest reports, published by news publication Bloomberg, suggest that authorities in the US are pushing to break the Google partnership with AI startup Anthropic as part of an antitrust case concerning online search. According to the report, the government proposal suggests barring Google from acquiring or collaborating with companies influencing consumer search, including AI products.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On November 21, Phillip Securities downgraded the stock to Accumulate from Buy with a price target of $160, up from $155, following the Q3 report. The advisory cites the recent movement in the shares for the downgrade. It also lowered margin assumptions for fiscal 2026 to reflect management guidance of lower margins due to Blackwell products.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
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 platform Shreveport Times, claim that the company has cleared the first hurdles for building a new AI data center in Louisiana. Per the report, the Public Service Commission has agreed to a request to hire consultants and attorneys for the application to build three new power plants to accommodate the data center project. Commissioner Foster Campbell has said that Meta could invest $10 billion or more to build the AI data center in Holly Ridge, per the report.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. Latest reports, published by news platform The Information, contend that OpenAI, an AI startup backed heavily by Microsoft, is planning to release a web browser to compete with Google Chrome, the most popular browser in the world. The reports further state that OpenAI would integrate ChatGPT, the AI-powered chatbot, into the browser. The idea has already been discussed with website and application developers, per the news platform.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. On November 22, the company announced that it would be investing an additional $4 billion into AI startup Anthropic. As part of this deal, the company said that Amazon Web Services will become the primary training partner of the startup, and the maker of the Claude AI chatbot will use the Trainium processors of Amazon to train and deploy the largest foundation models. Amazon has already invested $4 billion into the firm over the past few months.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ: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 Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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