The AI Boom in Big Tech is showing no signs of slowing down any time soon. This past week, artificial intelligence was the key focus for the Big Five, which together are valued at more than $10 trillion. The reporting season not only highlighted the push these big tech companies are making in AI investments but also demonstrated that they aren’t afraid to take it up any further than they already have. Previously, concerns regarding the returns from substantial AI investments had led to negative investor sentiment and even triggered a sell-off in major AI plays. However, some results are demonstrating that AI investments may be worth the wait.
READ ALSO: Top 10 Trending AI Stocks to Watch in November and Top 10 Trending AI Stocks in Q4.
“The AI theme is intact if you’re the mega caps,” as companies show that they can monetize their investments while maintaining existing profitability. As long as that infrastructure continues to be built, then we continue to be in a good place for the broader AI trade”.
– Deepwater Asset Management’s Gene Munster.
That said, executives of the major AI plays have fair-warned that their AI splurges will continue next year. Tech giants are racing to secure high-end chips and build sprawling data centers, forging partnerships with energy providers and much more. Each company wants to prove to Wall Street that these investments will eventually lead to greater profitability as compared to their current businesses.
Ray Wang, principal analyst and founder at Constellation Research, believes that only a handful of technology names will be able to come out at the top, especially considering the high costs related to AI. This makes the situation quite favorable for well-capitalized companies.
The Latest Developments in AI
As companies ramp up their spending on AI, let’s take a closer look at how other AI players are advancing to make headlines. For starters, Perplexity, an AI conversational search engine that uses large language models to answer queries, has announced a dedicated hub for US general election information. Even though the AI-powered search engine has been seen to hallucinate from time to time, the company is keen on showing its trustworthiness when it comes to tracking election results.
“Starting Tuesday, we’ll be offering live updates on elections by leveraging data from The Associated Press so you can stay informed on presidential, senate, and house races at both a state and national level. Thank you to Democracy Works for granting us access to your Elections API to help power these experiences.”
-Perplexity.
The company’s election hub provides answers to election-related questions, as well as AI-generated analyses on ballot measures, policy stances, candidates, and endorsements.
In other news, Noma Security, a stealth mode startup specializing in Enterprise, Cyber Security, and Artificial Intelligence, is said to be developing tools to identify vulnerable data pipelines and code in data science environments, as well as threats like prompt injection attacks.
“Existing tools are designed for the traditional software lifecycle. However, the data and AI lifecycle is inherently different. It involves distinct R&D processes, relies on different technologies, and faces unique technical vulnerabilities within AI models.”
– CEO Niv Braun
Talking about the AI pioneer OpenAI, reports from Bloomberg state that the company is in talks with California’s attorney general’s office about the process of becoming a for-profit entity. While a shift to being a for-profit company would mark a drastic reversal in the governance structure for the company, the move would also make the firm more attractive to investors.
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.
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).
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15. Navitas Semiconductor Corporation (NASDAQ:NVTS)
Number of Hedge Fund Holders: 15
Navitas Semiconductor Corporation (NASDAQ:NVTS) is considered the industry leader in next-generation GaNFast™ gallium nitride (GaN) and GeneSiC™ silicon carbide (SiC) power semiconductors, known for their power efficiency, reduced size and weight, and lower overall cost. This emerging player in the AI landscape has been developing system designs to support the exponential growth in AI power demand.
Navitas Semiconductor Corporation (NASDAQ:NVTS) will be showcasing its latest innovations at the 2024 China Power Electronics and Energy Conversion Conference and the 27th Annual Academic Conference and Exhibition of the China Power Supply Society (CPEEC & CPSSC 2024), to be held in Xi’an from November 8th – 11th, 2024. Visitors will be able to explore Navitas Semiconductor Corporation’s (NASDAQ:NVTS) groundbreaking semiconductor innovations at the conference, from the world’s first 8.5kW power supply for AI data centers to their patented digital control called “‘IntelliWeave”. IntelliWeave is a new digital control technique for improving next-generation AI data center power supply (PSU) efficiency. Other developments, such as their 6.6kW EV charger, together will make for a compelling showcase at the event.
14. Cohu, Inc. (NASDAQ:COHU)
Number of Hedge Fund Holders: 16
Cohu, Inc. (NASDAQ:COHU) is a global technology leader that provides semiconductor test equipment and services in China, the United States, Taiwan, Malaysia, the Philippines, and internationally. The company is a key player in semiconductor manufacturing services.
On October 31, Cohu, Inc. (NASDAQ:COHU) announced that it had secured an initial order from one of the world’s top semiconductor memory manufacturers. A leading U.S. memory and data storage technologies customer has selected its Neon platform for inspection metrology of high bandwidth memory devices (HBM) used in high-performance computing (HPC) and generative artificial intelligence (AI) applications.
Neon offers an efficient vision system providing comprehensive 6-sided optical inspection and measurement of micro-pillars, facilitating integration with factory automation as well as an effective output sorting process for meeting current and future needs in the high-bandwidth memory (HBM) market. Cohu’s vision technology enhances accuracy and reliability in measuring these thousands of micro-pillars on HBM devices, while the AI inspection software employs deep learning and neural networks for improved inspection yield.
“We are pleased to have received an initial order from one of the world’s leading semiconductor memory manufacturers to improve quality of HBM memory used in AI data centers. This is a new market application for Cohu products, and it represents a strategic and substantial growth opportunity aligned with secular growth in artificial intelligence”.
– Luis Müller, Cohu President and CEO.
