2024 has been a big year for AI breakthroughs, and the momentum shows no signs of slowing down anytime soon. Generative AI has arguably been the biggest trend, with McKinsey estimating that it could add the equivalent of $2.6 trillion to $4.4 trillion in value across industries annually, based on 63 use cases they analyzed. Back in 2022, when OpenAI launched its free web app, ChatGPT, few could have predicted the scale of the AI revolution that would follow. Major tech giants have since followed suit, revealing their own chatbot-based assistants, AI-enabled phones, and much more.
READ ALSO: 15 AI News Investors Should Not Miss and 20 Trending AI Stocks on Latest News and Ratings
As AI continues to revolutionize industries and push technological boundaries to new heights, today’s headlines reveal just how impactful these advancements can be. The question of the hour is, with all of these big AI breakthroughs, are regulators finally catching up with developers working on their next big AI projects? Yahoo Finance’s Catalysts features an interview with Credo AI Founder and CEO Navrina Singh, discussing the sustainability of the valuations and growth of AI companies, and the potential risks they may pose. Credo AI is an AI governance platform streaming responsible AI adoption and automating oversight.
According to Singh, even though AI developers may see governance as a “speed bump in innovation”, companies who start with emerging technologies such as artificial intelligence with the right guardrails in place will eventually end up being “long-term winners”. Regardless of how long it takes for governance to fully catch up, the AI frenzy continues to intensify. In recent news, the world’s largest asset management firm led under the leadership of Larry Fink launched a new AI-focused exchange traded fund on Tuesday, October 22.
Tony Kim, head of the fundamental equities technology group, believes that AI is a growing stack of opportunity. The ETF is going to hold a concentrated portfolio of around 30 to 40 stocks, with new winners to be added as they emerge. According to Kim, the whole concept of the portfolio is to embody the concept of time and stack. That said, even though the AI trade has lost some spark, the plans and spending for advanced AI, in hopes of achieving artificial general intelligence, or AGI, make the portfolio very relevant.
“Most of these companies in tech are all racing to get to AGI. We all have different views of AGI and when AGI will happen and what it will cost, but it will cost a lot more. Orders of magnitude more. And not only will it take that much more [money], it will take that much time”.
– Tony Kim
That said, many of the companies that may prove to be the winners in the AI revolution may not be on investors’ radars yet, or may not even have begun being publicly traded. Consider Daze, a creative AI-powered messaging application that hasn’t even launched yet but already shows the potential to challenge leading platforms once it hits the market. Prelaunch, the app’s waitlist is already overflowing with approximately 156,000 sign-ups (and counting).
The momentum of the Daze app is happening alongside broader technical advancements, such as the launch of “Swifts,” or stratospheric, which are AI-enabled robotic cameras that fly on weather balloons, by a New York-based startup called Near Space Labs. The technology aims to assess property risks and climate-related disasters, helping insurance companies pay out claims within days instead of weeks or months.
In other news, Jeff Bezos-backed Perplexity AI has begun fundraising talks looking to double its valuation to $8 billion or more, according to the Wall Street Journal. Perplexity AI is an AI-powered research and conversational search engine that answers queries using natural language predictive text. Recently, the search engine has been facing numerous lawsuits from the likes of Dow Jones and the New York Post, alleging that the company uses copyrighted content unlawfully. Publishers claim that such bypasses are depriving them of advertising and subscription revenue, and also undermining the work of journalists. Even though Perplexity AI has launched a revenue-sharing program with some publishers, many still continue to push back and seek legal protection for their content.
A business executive in a modern office looking over reports detailing artificial intelligence.
Methodology
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).
20. Bullfrog AI Holdings, Inc. (NASDAQ:BFRG)
Number of Hedge Fund Holders: 2
Bullfrog AI Holdings, Inc. (NASDAQ:BFRG) is a technology-enabled drug discovery company that uses artificial intelligence to usher in the next generation of lifesaving therapies. Their robust graph analytic AI platform, bfLEAP™, helps in quickly detecting anomalies and uncovering hidden associations within patient data.
On October 22, Bullfrog AI Holdings, Inc. (NASDAQ:BFRG) announced that VP Artificial Intelligence, Enrique García-Rivera, Ph.D., will be presenting at Google’s inaugural Cancer AI Symposium. The exclusive one-day event will take place on October 30, 2024, at the Boston Center for the Arts. Dr. García-Rivera’s presentation will be revealing BullFrog AI’s groundbreaking use of artificial intelligence in drug discovery and development.
The company’s proprietary bfLEAP™ platform will be the highlight of the presentation, and how it is applied to cancer research by leveraging AI to identify complex biological patterns that contribute to disease progression and treatment resistance. Moreover, Dr. García-Rivera will also be introducing BullFrog AI’s novel “AlgoLLM” system for gene prioritization. This system transforms the identification of high-priority targets in drug development by harnessing large language models. The new AI tool is essential for simplifying the process of finding useful information about neuropsychiatric disorders and other diseases.
19. Perfect Corp. (NYSE:PERF)
Number of Hedge Fund Holders: 9
Perfect Corp. (NYSE:PERF) is a global leader in artificial intelligence (AI) and augmented reality (AR) beauty technology solutions. Working with over 600 partners, the company offers AI-powered tools such as virtual try-ons and AI analysis to help empower brands within the beauty industry.
On Monday, October 21, Noble Capital initiated coverage of Perfect Corp. (PERF) with an “Outperform rating” and a $5 price target. According to the analyst, the company’s AR and AI technology is powering its “market leading” virtual try-on service which is used by retailers and beauty brands alike for skincare products and makeup. It also leverages its technology to offer a suite of AI products via its app. With additional interest rate cuts on the horizon, the company is expected to grow its enterprise client base, thereby enhancing revenue growth and improving margins.
18. Thryv Holdings, Inc. (NASDAQ:THRY)
Number of Hedge Fund Holders: 18
Thryv Holdings, Inc. (NASDAQ:THRY) offers digital marketing solutions and cloud-based tools to businesses in the US. Its software as a service (SaaS) platform called Thryv is being used by more than 60,000 businesses to manage their end-to-end operations.
Thryv Holdings, Inc. (NASDAQ:THRY) has been leveraging artificial intelligence in the solutions that it offers to businesses to help them run more efficiently. From automated appointment reminders to eliminate no-shows to automating lead follow-ups, and letting AI generate social media captions via its Caption AI tool, the company is helping businesses do more with fewer resources.
On October 22, Thryv Holdings, Inc. (NASDAQ:THRY) announced that it has incorporated AI-enhanced social media capabilities into Thryv Marketing Center, the company’s small business marketing software. The marketing center’s new Social Media Management Tool will connect a business’s social media channels which include Instagram, TikTok, and YouTube. Through the tool, businesses will be able to see all performance insights, profiles, comments, and posts in a single view, thereby making management and growth of their social presence easier. The new AI features include AI-generated social content, a social content library, content recommendations, and social scheduling, all via a single social media management platform. The AI tools will help business managers quickly create, customize, and manage their social media posts.
“Social media marketing plays a big role in finding and engaging new customers. However, being successful on social media requires time and creativity to develop, schedule, and engage with content. Time that most small businesses don’t have. By creating a centralized hub and leveraging AI for content creation Thryv is making it easy for small businesses to consistently serve relevant content to their customers without being online 24/7”.
– Rees Johnson, Chief Product Officer of Thryv.
17. Nokia Oyj (NYSE:NOK)
Number of Hedge Fund Holders: 18
Nokia Oyj (NYSE:NOK) is a Finnish multinational telecommunications, information technology, and consumer electronics corporation offering network infrastructure, technology, and software services. Acknowledged as a Telco AI trailblazer, Nokia offers AI solutions such as its AI-driven energy management automation through the AVA Energy Efficiency software, as well as other AI solutions that drive business innovation, sustainability, security, and operational efficiency.
On October 22, Nokia Oyj (NYSE:NOK) announced that it is partnering with Lenovo to “to drive advancements in data center solutions for the AI era”. The collaboration aims to merge Lenovo’s ThinkSystem AI-ready servers and storage capabilities with Nokia’s data center network solution, which also includes its recently launched Event-Driven Automation (EDA) platform. These combined solutions will help meet the rigorous processing and network performance demands of contemporary workloads.
The combination of these portfolios with a validated blueprint architecture will facilitate the seamless automation of AI/ML and compute-intensive workloads, thereby providing improved observability, programmability, and extensibility, which are crucial for adapting to dynamic environments. Both Lenovo and Nokia boast built-in security solutions that are necessary to fend off cyberattacks. Moreover, both of these companies emphasize on energy-efficient designs that reduce power consumption and operational costs while promoting sustainability, which is a key data center concern.
– “Our partnership with Lenovo exemplifies Nokia’s commitment to innovation and excellence in data center solutions. By combining Nokia’s Data Center Fabric and Event Driven Automation with Lenovo’s ThinkSystem AI portfolio, we deliver a high performance, scalable data center networking solution designed to efficiently manage and automate AI/ML workloads, with a strong emphasis on security and energy efficiency. This collaboration not only enhances the performance and reliability of data center operations, but also underscores our dedication to providing innovative solutions that meet the evolving needs of our customers. Together, we are setting new standards in the industry and driving forward the future of data center technology”.
– Vach Kompella, Senior Vice President and General Manager of IP Networks business at Nokia
16. Thomson Reuters Corporation (NYSE:TRI)
Number of Hedge Fund Holders: 22
Thomson Reuters Corporation (NYSE:TRI) is a Canadian global content and technology company offering news and information-based tools to professionals. The company leverages artificial intelligence to enhance search accuracy, automate processes, and provide data-driven insights across legal, tax, and news domains.
On October 22, Thomson Reuters Corporation (NYSE:TRI) said it had acquired Materia, a U.S.-based startup developing an artificial intelligence-powered assistant for the tax, audit, and accounting profession. According to the company, the deal aligns with its strategy to offer AI tools to the professional sector that it serves. Thomson has been an early investor in the startup.
“Our vision is to provide each professional we serve with a Gen AI assistant. Materia will further accelerate this vision for our tax, audit and accounting customers. Once fully integrated, Materia will transform work and unify the entire customer experience with applications across our tax, audit, and accounting portfolio. We are excited by the potential of combining Materia with Thomson Reuters content, know-how, and solutions”.
– David Wong, Chief Product Officer, Thomson Reuters.
15. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 31
SAP SE (NYSE:SAP) is a German multinational software company offering enterprise application software and related services. It is the market leader in ERP software. SAP SE leverages AI to enhance its enterprise resource planning (ERP) solutions. Its Generative AI assistant, Joule, transforms the way users engage with SAP business systems. Moreover, AI Foundation on SAP BTP is SAP’s comprehensive AI toolkit that provides developers with ready-to-use, customizable AI solutions.
SAP SE (NYSE:SAP) has been promising its customers with lots of artificial intelligence tools and analytics. On Monday, October 21, SAP SE revealed that its cloud revenue rose 25% in the third quarter from a year ago. This was roughly in line with analyst estimates. The company’s cloud backlog, indicating sales expected to be recorded over the next twelve months, increased by 25% to reach €15.4 billion. The company is thriving now that its customers are shifting to cloud, where it’s offering them a whole lot of AI services for enterprise users. To compare, the company’s cloud business is promising a higher average spending per client than SAP’s legacy on-premise software.
“By the end of this year, we want to have 80% of the most frequent SAP use cases in AI so we can bring tremendous productivity to our customers…But in terms of monetization, we are still in the early innings.”
– Chief Financial Officer Dominik Asam said in an interview on Tuesday, October 22.
With SAP SE exceeding earnings estimates in its latest quarter, Wedbush Securities analyst Dan Ives highlights how SAP SE is going to be a “foundational player”.
“I think it’s going to be a huge step in the right direction on cloud checks, actually very strong for SAP”.
-Dan Ives
With the company’s transformation to cloud-based services continuing to accelerate, Ives notes cloud operations now represent approximately 45% of the company’s business. This figure is expected to rise to 70% by the end of next year, which indicates a substantial transformation in SAP’s business model.
14. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and manufactures semiconductor technology and other related products. The company showcases leadership in mobile and AI technology with products like the Axion processor, Ethos-U85, and Windows on Arm. The company’s chips are used in conjunction with GPUs in data centers and to enable on-device AI features in smartphones.
On October 23, Bloomberg reported that Arm Holdings plc (NASDAQ:ARM) is canceling a chip designing license with Qualcomm. The design allowed longtime partner Qualcomm Inc. to use Arm’s intellectual property to design chips. This move would have an impact on a majority of smartphone manufacturers that rely on Qualcomm chips.
Arm Holdings plc (NASDAQ:ARM) has given Qualcomm a mandated 60-day notice of the cancellation of their architectural license agreement, which previously allowed the latter to create their chips based on standards owned by Arm. This move marks an escalation to a legal battle that started when Arm sued Qualcomm in 2022 for breaking their contract and misusing its trademarks. The company has now given Qualcomm eight weeks to resolve the issue before taking further action.
Arm states that it was “necessary to protect the unparalleled ecosystem that Arm and its highly valued partners have built over more than 30 years”. In response, the Qualcomm spokesperson stated that these are “more unfounded threats designed to strong-arm a longtime partner” and increase royalty rates. It “appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless. Arm’s anticompetitive conduct will not be tolerated.”
The two companies are now headed to resolve a breach of contract lawsuit filed by Arm and a countersuit by Qualcomm. It centers on the latter’s 2021 acquisition of Nuvia, another Arm licensee, and Arm’s claim that Qualcomm failed to renegotiate contract terms. On the other hand, Qualcomm asserts that the existing agreement covers Nuvia’s activities. Nuvia’s work on microprocessor design is crucial for the personal computer chips that Qualcomm sells, as well as their more widely used Snapdragon chips for smartphones.
13. Reddit Inc (NYSE:RDDT)
Number of Hedge Fund Holders: 39
Reddit Inc (NYSE:RDDT) is an American social news aggregation, content rating, and forum social network. Artificial Intelligence is an important part of the company’s business, with the company enhancing its AI capabilities by acquiring Memorable AI. This was following a partnership announcement with OpenAI in May.
In an interview at the Wall Street Journal’s Tech Live 2024 event that happened October 21–23, 2024, Reddit CEO Steve Huffman asserted that the essence of artificial intelligence stems from human intelligence, which is in turn found on platforms such as Reddit. Platforms like Reddit are a birthplace for diverse and colloquial conversations that keep content constantly updated.
“The Reddit corpus is a significant part of the training of the major foundation models and that’s because there’s colloquial words about pretty much every topic constantly up to date.”
According to Huffman, there is a general lowering of the quality of content on the Internet since more and more of it is written by AI. This is where Reddit stands out as it’s the place where you can find human content that ends up being used to train AI.
Reddit is expected to report its third-quarter results on October 29. According to The Fly, several investment firms have raised the price target for Reddit Inc (NYSE:RDDT) including Roth MKM, B.Riley, and Jefferies. On October 23, Roth MKM raised its Reddit stock price target to $89 from $66, keeping a buy rating on the shares. The firm has highlighted Reddit’s existing contracts with Google and OpenAI for utilizing the platform data in training their models. Open AI is expected to contribute $40 million, while Google’s partnership generates $60 million in annual recurring revenue (ARR).
12. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) is a public American company that builds the world’s leading platforms for data-driven operations and decision-making. By creating advanced data analytics software, it helps organizations in managing large and complex datasets which in turn help them make informed decisions. Palantir Technologies Inc. (NYSE:PLTR) is recognized as a leader in artificial intelligence and machine learning (AI/ML) software platforms.
On October 23, Palantir Technologies Inc. (NYSE:PLTR) and L3Harris Technologies, an American technology company, defense contractor, and information technology services provider, announced that they have formed a strategic partnership to drive advanced technology development and accelerate L3Harris’ digital transformation.
Together, the complementary strengths of both companies, which include L3Harris’ sensors and software-defined systems and Palantir’s Artificial Intelligence Platform (AIP), will enhance capabilities and offer resilient connectivity across the joint all-domain network. In turn, the collaboration will allow warfighters to make informed decisions faster to protect the nation’s security and that of allies.
“Palantir exists to support the West’s most important institutions. We’re partnering with L3Harris to ensure that the U.S. and its allies combine the West’s two greatest assets — AI dominance and cutting-edge hardware — on the battlefield.”
-Alex Karp, co-founder and chief executive officer of Palantir.
11. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 54
International Business Machines Corporation (NYSE:IBM) is an American global technology company offering integrated solutions and services worldwide. The company’s artificial intelligence offerings include their IBM® watsonx™, an AI and data platform and portfolio of AI-powered assistants; IBM® Granite™, a family of open-source, high-performing, and cost-efficient models trained on trusted enterprise data; IBM Consulting, their AI services to redesign workflows; and hybrid cloud offerings that enable AI-ready infrastructure to better scale AI.
On October 22, International Business Machines Corporation (NYSE:IBM) announced that it is launching the IBM Guardium Data Security Center –offering unified, SaaS-first data security capabilities amid hybrid cloud, AI, and quantum transformation. By providing a common view of organizations’ data assets, it empowers security teams to integrate workflows and address data monitoring and governance, data detection and response, data and AI security posture management, and cryptography management together in a single dashboard.
It also incorporates generative AI features to assist in creating risk summaries and enhancing the productivity of security professionals. The IBM Guardium Data Security Center features BM Guardium AI Security, a software solution designed to safeguard organizations’ AI deployments from security vulnerabilities and data governance violations. It also includes IBM Guardium Quantum Safe, which protects encrypted data from future cyber threats posed by quantum computers. Also, it builds upon the expertise of IBM Research and IBM Consulting.
“Generative AI and quantum computing provide immense opportunities, but they also bring new risks. During this transformative time, organizations need to improve their crypto-agility and carefully monitor their AI models, training data, and usage. IBM Guardium Data Security Center – with its AI Security, Quantum Safe, and other integrated capabilities – provides comprehensive risk visibility”.
-Akiba Saeedi, Vice President, IBM Security Product Management.
10. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 62
Morgan Stanley (NYSE:MS) is an American multinational investment bank and financial services company offering various financial products and services to corporations, governments, financial institutions, and individuals in different parts of the world. The company has been investing in AI to help financial advisors understand client needs. Initiatives like AI @ Morgan Stanley Debrief provide insights into client interactions, while the AI @ Morgan Stanley Assistant is a chatbot that offers personalized support for advisors.
On October 23, CNBC reported that Morgan Stanley (NYSE:MS) has been expanding the use of OpenAI-powered, generative artificial intelligence tools to its vaunted investment banking and trading division. In early 2023, the firm launched an AI assistant based on OpenAI’s ChatGPT technology. The other version called AskResearchGPT began rolling out this summer in its institutional securities group, notes Katy Huberty, Morgan Stanley’s global director of research. The tool will help users extract answers from the vast array of Morgan Stanley’s research, which includes stocks, commodities, industry trends, and regions. This will simplify the otherwise burdensome task of extracting insights from the over 70,000 reports generated by the bank each year.
“We see it as a game changer from a productivity standpoint, both for our research analysts and our colleagues across institutional securities. The tool helps staff “access the highest quality, most insightful information as efficiently as possible.”
– Katy Huberty, Morgan Stanley’s global director of research.
9. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 69
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a global cybersecurity company that provides cloud-delivered protection of endpoints, cloud workloads, identity, and data. The company employs world-class AI and ML to detect and prevent modern threats with the speed and scale of the cloud.
On Tuesday, October 23, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) announced that it is partnering with Omnissa, a leading digital work platform company. The partnership aims to deliver real-time threat detection and automated remediation for Virtual Desktop Infrastructure (VDI) and physical desktop environments, all while improving upon customers’ digital work experience and productivity. The partnership, forming amid rising worldwide security threats, aims to combine CrowdStrike’s AI-based endpoint security with Fortinet’s network firewall technology to handle cyber-attacks.
While endpoint security helps safeguard individual devices such as computers and phones, network firewalls help regulate incoming and outgoing network traffic. The combination of the two elements helps bridge the gap through collaboration, offering a holistic approach to cybersecurity, and allowing organizations to detect and respond to threats more efficiently across their entire IT infrastructure. It is also a reflection of the growing trend in the cybersecurity industry to consolidate and integrate security tools.
8. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 88
Dell Technologies Inc. (NYSE:DELL) is an American multinational technology company engaged in the designing, development, manufacturing, marketing, selling, and support of a wide range of comprehensive and integrated solutions, products, and services. The company offers end-to-end AI solutions through Generative AI and the Dell AI Factory, a complete and secure AI solution helping organizations customize and accelerate the development of their in-house chatbots and assistants, and equipping them with the relevant data for more complex processes.
Dell Technologies Inc. (NYSE:DELL) is placed on J.P. Morgan’s “Positive Catalyst Watch” ahead of third-quarter earnings. Dell makes servers that contain Blackwell chips. The company’s next earnings report will be announced in late November. Analysts expect Dell to report adjusted earnings per share of $2.04 on revenue of $24.7B.
“In conjunction with revenue and margin upsides from a recovery in traditional IT infrastructure, we expect the rapid expansion of the pipeline in relation to AI servers highlighted on the prior earnings call to translate into a robust backlog reassuring investors around sustainability of AI demand”.
– Analyst Samik Chatterjee.
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 100
QUALCOMM Incorporated (NASDAQ:QCOM) is an American multinational corporation engaged in the design and manufacture of semiconductors and wireless telecommunications products. The company has been developing and integrating generative AI capabilities across its extensive semiconductor line for the past few years. The company’s end goal for its AI technology is “embodied AI”, which involves integrating machine learning, multimodal AI, and LLM technology into a hybrid, always-on AI.
On October 22, QUALCOMM Incorporated (NASDAQ:QCOM) said it was partnering with Alphabet’s Google to offer a combination of chips and software that will allow automakers to develop their own AI voice assistants. By combining Qualcomm Snapdragon CPUs and Google AI technology, automakers will be able to create their own personalized voice assistants in their vehicle systems. The two companies said that the joint offering will allow automakers to create unique voice assistants that don’t rely on a driver’s phone.
“Typically, we have operated together, but independently – we plan a lot of things together, but we go to customers separately. We decided we should think about this differently because it will reduce a lot of friction and confusion.”
– Nakul Duggal, group manager for automotive at Qualcomm, said of the Qualcomm-Google relationship.
QUALCOMM Incorporated (NASDAQ:QCOM) also rolled out two new chips, the Snapdragon Cockpit Elite and the Snapdragon Ride Elite. The former is used to power dashboards, while the latter is for self-driving features. Mercedes-Benz plans to incorporate Qualcomm’s Snapdragon Elite Cockpit chip in future vehicles. However, the details on when or which models the chip will be used is still unclear.
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), a leading Taiwanese multinational in semiconductor manufacturing and design, is the primary producer of advanced chips for AI applications. As the world’s largest contract chipmaker, it has been capitalizing on the rapid growth of AI and the growing spending on artificial intelligence (AI) computer chips. It does so by focusing on the foundry business, i.e. making chips designed by clients that lack their own factories.
Two years ago, the US restricted the export of high-end AI chips to China in order to limit the Chinese’s military capabilities. However, it has recently come to light by a tech research firm called TechInsights that Huawei Technologies Co.’s latest AI offering includes an advanced processor made by Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). The news suggests that China is still struggling to reliably make its own advanced chips in sufficient quantities.
On October 22, TSMC revealed that it had notified the US that one of its chips had been found in a Huawei product. This discovery emerged after Tech Insights dismantled the product, uncovering a potential breach of export restrictions involving the Chinese company. According to a source, the teardown was of the Huawei Ascend 910B, assumed the most advanced AI chip from a Chinese company. It is said that the TSMC chip was one within a multi-chip system. In a statement on Monday, TSM announced that it has been proactive in letting the Commerce Department regarding the matter, further clarifying that it hasn’t supplied chips to Huawei since mid-September 2020.
“We maintain a robust and comprehensive export system for monitoring and ensuring compliance”.
-TSMC said in its statement.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is a is an American multinational corporation and technology company engineering the most advanced chips, systems, and software for the AI factories of the future. The company has been the main beneficiary of the AI boom, with its advanced Graphic Processing Units (GPUs) that specialize in supercomputing capabilities supporting generative AI training.
Back in March, NVIDIA Corporation (NASDAQ:NVDA) announced its most powerful Blackwell chips, capable of processing trillion-parameter AI models up to 30 times faster and using one-fourth of power. The chips were supposed to be shipped in the second quarter but were delayed, impacting major tech customers in the process. On Wednesday, October 23, CEO Jensen Huang revealed that there was a design flaw with its latest Blackwell AI chips that led to production and shipping delays. The design flaw has now been fixed. The chipmaker worked with its partner, Taiwan Semiconductor, to resolve the holdup.
“It was functional, but the design flaw caused the yield to be low. It was 100% Nvidia’s fault.”
-Jensen Huang
As per Huang, the complexity of the project contributed to the setback, since there were new chips that needed to be designed and put into production simultaneously. Taiwan Semiconductor helped recover from the yield difficulty and resume the manufacturing of Blackwell. The CEO says that the chips will now ship in the fourth quarter.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is an American multinational corporation and technology company involved in the design, manufacture, and marketing of smartphones, tablets, PCs, wearables, and accessories worldwide. The company leverages AI to enhance functionality, user experience, and security across its products.
On Wednesday, October 23, Apple Inc. (NASDAQ:AAPL) released a beta version of its iPhone operating system, iOS 18.2. This version includes a large number of Apple Intelligence features, with the much-awaited ChatGPT integration. Investors are hopeful that these AI features will help fuel iPhone upgrades since they are only available on the newer devices. The iOS 18.2 preview features new capabilities for users to customize text rewrites by Apple Intelligence, Genmoji for generating new emoji, Image Playground as an AI image generator, Visual Intelligence, and integration with ChatGPT. According to Apple, the official public release of the Apple Intelligence features will be next week as part of the official iOS 18.1 release.
Wedgewood Partners, an investment management company, highlighted stocks like Apple Inc. (NASDAQ:AAPL), in the third quarter 2024 investor letter. Here is what they state regarding Apple Inc. (NASDAQ:AAPL):
“Apple Inc. (NASDAQ:AAPL) also contributed to performance as investors continued to favorably discount the recent unveiling of its AI strategy. As we have noted in the past, the Company has been at the forefront of proprietary semiconductor computer processor development for well over a decade. Given the compute-intensive nature of AI applications, Apple is well situated to develop a suite of compelling, consumer-friendly AI services that are also cost-effective. Apple’s AI value proposition should compel consumers to continue growing their engagement in the Apple ecosystem over the next several years.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 216
Alphabet Inc. (NASDAQ:GOOG) is the company behind Google. Google offers a vast array of sophisticated artificial intelligence products, solutions, and applications on a trusted cloud platform, enabling businesses to build and implement AI algorithms and models. Its AI product lineup features consumer-focused solutions like Google One AI Premium and Gemini, alongside developer tools such as Gemini models.
On October 23, Alphabet Inc. (NASDAQ:GOOG)’s Google reported that Google DeepMind has developed a tool for identifying AI-generated text and that it is making it available open source. SynthID, the new tool, is a member of a larger family of watermarking tools for generative AI outputs. Watermarks are an important way of letting people determine whether something is AI-generated, allowing people to counter harms such as misinformation.
The new tool can be downloaded from the AI platform Hugging Face, or Google’s updated Responsible GenAI Toolkit.
“We’re open-sourcing our SynthID Text watermarking tool. Available freely to developers and businesses, it will help them identify their AI-generated content.”
-Google wrote in a post on X.
According to Google, SynthID Text will not compromise the quality, speed, or accuracy of text generation. It will even work on text that has been cropped, modified, or paraphrased. However, the company also reports that it has some limitations. For instance, SynthID Text doesn’t perform well on short text, responses to factual questions, or text that has been rewritten or translated from another language. Considering such watermarking techniques are widely implemented, they can help counteract inaccurate AI detectors prevalent today.
“Now, other [generative] AI developers will be able to use this technology to help them detect whether text outputs have come from their own [large language models], making it easier for more developers to build AI responsibly”.
-Pushmeet Kohli, the vice president of research at Google DeepMind.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ) is an American multinational technology company that develops and sells software, services, and hardware. The company’s AI strategy is highlighted by its collaboration with OpenAI and the integration of AI technologies across platforms like Windows, Xbox, Microsoft 365, Teams, and Dynamics.
On October 22, Microsoft Corporation (NASDAQ:MSFT) announced a new major collaboration with Open AI and the Lenfest Institute for Journalism. The collaboration between Lenfest, OpenAI, and Microsoft Corp. aims to help newsrooms explore and implement ways in which artificial intelligence can help drive business sustainability and innovation in local journalism through the Lenfest Institute AI Collaborative and Fellowship program.
In the first round of funding, several news organizations, including Chicago Public Media, Newsday, The Minnesota Star Tribune, The Philadelphia Inquirer, and The Seattle Times, will receive grants to hire AI fellows for two years. The fellowship will focus on enhancing business sustainability and integrating AI technologies within their respective organizations. It will also provide OpenAI and Microsoft Azure credits to help these publications experiment and develop tools to assist with local news. News like these may make it seem that AI is slowly replacing the role of journalists. However, AI can help the sector thrive.
“While nothing will replace the central role of reporters, we believe that AI technology can help in the research, investigation, distribution and monetization of important journalism. We’re deeply invested in supporting smaller, independent publishers through initiatives like The Lenfest Institute AI Collaborative and Fellowship, ensuring they have access to the same cutting-edge tools and opportunities as larger organizations. Local news is a particularly vulnerable area of journalism, and we believe AI can help it thrive.”
– said Tom Rubin, chief of Intellectual Property and Content, OpenAI.
1. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com Inc (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. Amazon.com Inc (NASDAQ:AMZN) uses artificial intelligence for everything from reinventing shopping experiences to optimizing supply chain, and more with generative AI powered by Amazon Web Services (AWS).
On Tuesday, October 22, Amazon.com Inc (NASDAQ:AMZN) backed Anthropic announced that it has reached a new artificial intelligence milestone for the company. Anthropic is an AI safety and research company that aims to build reliable, interpretable, and steerable AI systems. The company has released an upgraded version of its Claude 3.5 Sonnet model. The model can understand and interact with any desktop app via a new “Computer Use” API, now in open beta. It can imitate keystrokes, button clicks, and mouse gestures, just like a human.
“We trained Claude to see what’s happening on a screen and then use the software tools available to carry out tasks. When a developer tasks Claude with using a piece of computer software and gives it the necessary access, Claude looks at screenshots of what’s visible to the user, then counts how many pixels vertically or horizontally it needs to move a cursor in order to click in the correct place.”
– Anthropic.
The feature was released in public beta on Tuesday, and it is expected that it will be open to consumers and enterprise clients over the next few months.
“We want Claude to be able to actually assist people with all sorts of different kinds of work, and we think the chatbot setup is fairly limited because you can ask a question and [get] context but it stops there”.
-Jared Kaplan, Anthropic’s chief science officer
Overall, AMZN ranks first among the 20 AI News Investors Should Not Miss. While we acknowledge the potential of 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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