In this article, we discuss the 17 latest AI news and analyst ratings you should not miss.
It is no surprise that companies in the United States and China are leading the rest of the world when it comes to artificial intelligence. Conservative estimates about the impact of AI on the global economy, made by market experts at professional services firm PwC, reveal that AI-related gains, equal to close to $11 trillion, will account for nearly 70% of total global economic impact by 2030. In China, AI is expected to contribute to a nearly 26% boost to the GDP within the next six years, while this figure in the US will likely be 15%. AI no doubt represents the biggest commercial investment opportunity in this fast-paced world economy.
Smart companies are seizing on this opportunity. According to market research firm IDC, investments in AI infrastructure will cross $30 billion this year and are projected to grow to $47 billion by 2028. This represents approximately 30% of the total global spending in AI. One of the most prominent AI use cases is in the customer service world. In this area, global businesses have spent more than $16 billion in 2024 so far. The impact of these investments in AI will be significant down the road. AI is likely to contribute to a $15 trillion boost to the global economy by 2030, up 14% from current levels.
Like other sectors of the economy, Wall Street is no stranger to AI. The debut of ChatGPT in November 2022 marked the beginning of the AI revolution in the world of finance. Since then, according to the International Monetary Fund (IMF), sales of software, hardware, and services for AI systems have climbed rapidly and will top $400 billion in 2027. Financial sector spending is likely to double to nearly $100 billion in 2027, with a compound annual growth rate of close to 30% — the fastest of five major industries. Hedge funds, often the pioneers of cutting-edge technology, are embracing generative AI as well.
Our Methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. 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).
A doctor in a laboratory, overseeing the development of Artificial Intelligence (AI).
Latest AI News and Analyst Ratings You Should Not Miss
17. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Constellation Energy Corporation (NASDAQ:CEG) generates and sells electricity in the United States. The market for utilities is facing tightening supply concerns just as demand rises due to AI data center build. In this context, the company seems fundamentally well positioned to serve the growing electrification needs because of the value of the nuclear fleet. This fleet provides carbon-free baseload generation. In a recent earnings call, the CEO of the firm said that the colocation of data centers with nuclear power plants was the fastest and most cost-effective way to develop critical digital infrastructure without burdening customers with expensive upgrades.
Barclays recently initiated coverage of Constellation Energy Corporation (NASDAQ:CEG) stock with a Buy rating and a price target of $211, highlighting that the stock represented one of the most scarce opportunities in the power and utilities sector from a capital return, consensus revision potential, and catalyst path perspective. Analysts at the advisory added that the shares looked particularly attractive after a 40% relative selloff versus the broader utilities sector in the past two months.
16. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 100
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. The company has recently made a flash in the AI chips market. After extending a deal with Apple to power iPhones till 2026, the company has also started working on the new ARM-based Snapdragon X Elite CPU chips. Apple rival Microsoft, another customer of the firm, has called these chips the fastest, most AI-ready PC ever built. In contrast to other AI offerings, the firm is also well diversified across the chip market, with strong presence in handset, automotive, broadband, AR/ VR/ XR, and ARM-based AI CPU markets. The long-term future of the firm compares favorably to other chip makers.
QUALCOMM Incorporated (NASDAQ:QCOM) has earned a Buy rating from investment advisors at Rosenblatt, with a price target of $240. In a recent note, the analysts at the advisory noted that the firm was taking market share in premium Android handsets, automotive cockpit, and the PC and the next phase of AI growth was at the network edge, where the company was well positioned.
15. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 88
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. The increased adoption of AI has brought a lot of business to the firm. In the second quarter earnings call, the COO of the firm highlighted some of this business, revealing that the AI-optimized servers orders of the firm had increased to $2.6 billion during the quarter, with shipments up more than 100% sequentially to $1.7 billion. He also noted that the company had shipped more than $3 billion of AI servers over the last three quarters. The AI server backlog stood at $3.8 billion, growing sequentially by almost $900 million.
Morgan Stanley has favorable views on Dell Technologies Inc. (NYSE:DELL) shares. The investment advisor has an Overweight rating on the stock with a price target of $142. In a recent investor note, it underlined that investors should ignore the noise around AI and focus on fundamentals. It added that intra-quarter customer, industry and supply chain checks pointed to sustained topline momentum at Dell, including strong AI server builds, an uptick in storage demand, and improving PC pricing.
14. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 77
Applied Materials, Inc. (NASDAQ:AMAT) provides equipment, services, and software for the semiconductor industry. The AI buzz has served to increase investor interest in the company, and this interest has been earned. The company has exhibited stellar revenue and EPS growth over the past decade, with revenue increasing by over 350% from 2014 to 2024. The AI capex has had a bearing on consensus revenue estimates, which suggest continued growth. The revenue of the chip firm is projected to increase from around $27 billion in this fiscal year to more than $37 billion within the next four years. The rapid acceleration is made possible because of the AI revolution.
The consistently strong earnings of Applied Materials, Inc. (NASDAQ:AMAT) have grabbed the attention of investment advisors on Wall Street. B Riley has a Buy rating on the stock with a price target of $280. Analysts at the firm recently advised investors to buy the dip on the shares after a tech selloff, saying the firm was a sector bellwether.
13. Celestica Inc. (NYSE:CLS)
Number of Hedge Fund Holders: 38
Celestica Inc. (NYSE:CLS) offers a range of product manufacturing and related supply chain services. It has important customers like Meta Platforms and Amazon. As AI data center build gets underway, the existing partnerships of the firm with these hyperscalers will likely reap enormous rewards for investors. Unlike other names in the tech space that are associated with AI, the firm has a PE valuation of just 20x, implying upside potential of close to 30%. The company may not make products that are the face of the AI revolution, like NVIDIA GPUs, but the ones it does make, like routers, switches, storage, custom circuit boards, and other components, are just as important for data center build.
Celestica Inc. (NYSE:CLS) has thus received bullish calls on Wall Street. For example, Canaccord analyst Robert Young has a Buy rating on the stock and recently raised the price target to $70 from $53, highlighting another strong quarter with the second quarter results ahead of consensus on all metrics and a strong third quarter outlook.
12. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. The firm is one of the largest in the chip space, offering foundry, outsourced semiconductor assembly and test (OSAT), as well as strong process technology services. The AI wave has served to drive even more investor interest towards the company, even though smartphone and PC demand has been slow the past few months. The firm recently revealed that it was building Foundry 2.0, an all-in-one operation that would offer hyperscalers one-stop chip services, including packaging, testing, mask making, and others and all IDM, excluding memory manufacturing.
This is one of the reasons that prominent investment banks, like JPMorgan, are bullish on the short and long-term future of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). JPMorgan has an Overweight rating on the shares with a price target of NT$1,200. In a recent investor note, the bank highlighted that the firm was firmly on course to improving margins in the next few years.
11. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. A rebound in memory prices and favorable inventory balances have worked in favor of the company in recent months, helping it post record revenue numbers. As capital expenditures on AI infrastructure continue to rise, the company looks set to improve revenues even further. The company is already innovating in anticipation of AI demand. Reports suggest the firm is investing heavily in next-gen 300-plus-layer NAND, which is expected to be in high-volume production by the next fiscal year. High bandwidth memory products will be the main driver of revenue for the firm in the meantime.
In addition to NAND, analysts are also bullish on the prospects of DRAM, a key product of Micron Technology (NASDAQ:MU). Citi recently reiterated a Buy rating on the shares with a price target of $175, noting that the DRAM upturn was continuing with upside from Samsung and Hynix. It added that DRAM pricing looked set to increase 12% in Q3 and 6% in Q4, possibly extending through 2025.
10. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers. The firm is famous for designing energy-efficient microprocessors that have a key presence in the AI, cloud computing, and smartphone businesses. The company generally designs these processors and then gives away their rights to other firms, generating revenue from the products sold as well as royalties on the licenses. The company has had four straight quarters of record growth, managing to grow revenue by nearly 40% over this time. The firm has strategic partnerships with tech giants like Google and Amazon.
Arm Holdings plc (NASDAQ:ARM) can benefit from the possible rate cuts that are likely to happen in the coming months as well as high hopes of a soft landing for the economy. Analysts at Daiwa share this point of view. The investment advisory has an Outperform rating on the shares with a price target of $130, with analysts noting that the AI expectations for the company remained strong and tech names were settling down again after a recent selloff.
9. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) builds and deploys software platforms for the intelligence community to assist in counterterrorism investigations and operations. The firm recently revealed a partnership with tech giant Microsoft under which the cloud services of the latter for the government, in the defense sector, will be integrated with the AI tools marketed by the former. This collaboration paves the way for the integration of AI into many other government departments. All the prominent Palantir offerings, like Foundry, Gotham, Apollo, and AIP, will be available on the Azure platform of Microsoft. The firm claims the integration will help the defense department with logistics, contracting, prioritization and action planning, and more.
Even as Palantir Technologies Inc. (NYSE:PLTR) services the public domain, investment advisors like Argus view the shares in a bullish manner because of the growing commercial business of the company. Argus has a Buy rating on the stock with a price target of $32. In a recent note to investors, the advisory noted that the new data management and analytics platforms of the firm are capable of providing solutions to complex business problems.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. The company has gained prominence in the AI world by offering the chance for hyperscale customers to design custom AI chips. These hyperscale customers, most of whom turn to Broadcom rival NVIDIA for AI chips, are expected to spend billions in the coming months to purchase chips for their AI data centers. This strategy has proved to be a success. Broadcom will likely deliver more than 14% top line growth this year, up even from the 11% top line growth it delivered before the onset of the 2020 pandemic. Since 2022, the top line growth for the firm has climbed as interest in AI chips increases.
Broadcom Inc. (NASDAQ:AVGO) recently raised the sales target to around $51 billion. Investment advisory Roseballt mentioned this in their bullish call on the shares, noting that the raise was driven by AI semi-sales and better VMware integration, with investors continuing to focus on the competitive dynamic between the custom chips marketed by the firm and NVIDIA GPUs. Rosenblatt also increased the price target on the stock to $2,400 from $1,650.
7. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 92
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. The company has invested in clean energy, most notably in nuclear power, as AI data center needs propel the shares to new highs. Even as it provides the power needed to keep AI data centers running, the firm has also incorporated AI within the nuclear power plants to improve thermal efficiency, saving millions in operational costs. The shares also offer a healthy balance of stability and growth. Even as AI represents an opportunity for growth, the firm has a well diversified portfolio of power assets that can offer reliable dividends. This is often not the case for most AI stocks that operate in the technology domain.
Investment advisors like Morgan Stanley are bullish on Vistra Corp. (NYSE:VST) after an annual power auction by the largest US electrical grid operator led to an 800% increase in prices amid increasing demand and dwindling supply. The advisory noted that Vistra would have a positive impact on earnings as a result of the auction, but also highlighted potential secondary impacts like higher prices of nuclear contracts with data centers and pushbacks to higher customer bills.
6. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 47
Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high performance server and storage solutions based on modular and open architecture. As investments in AI infrastructure ramp up, the firm is benefiting from increased orders for memory and storage products. In the fourth quarter of the 2024 fiscal year, the firm posted year-on-year growth of 143% and pulled $5.3 billion in sales. The firm, which specializes in offering server solutions for the advanced computing needs of AI, was included in the S&P 500 earlier this year. To be included in this list, a company must have positive earnings for four consecutive quarters. The inclusion signifies the financial health of the stock as the AI wave sweeps the market.
Micro Computer, Inc. (NASDAQ:SMCI) expects net sales of $6 billion to $7 billion and GAAP net income per share of $5.97 to $7.66 in the first quarter of the next fiscal year. The numbers represent tripling sales from a year ago and more than doubling EPS at the midpoint of guidance. It underlines the confidence of management in the strong growth momentum in memory and storage because of artificial intelligence.
