In this article, we discuss the 35 non-tech AI opportunities amid DeepSeek selloff.
Investors are searching for safer ways to capitalize on the AI boom beyond traditional tech stocks. Towards the back end of last year, Goldman Sachs highlighted sectors such as utilities, industrials, retail, and healthcare as key beneficiaries of AI-driven productivity gains and cost reductions. While companies like NVIDIA have surged in value due to their role in AI hardware, Goldman analysts suggest the market has yet to fully recognize the potential of downstream AI-exposed industries. David Kostin, Goldman’s chief US equity strategist, outlines four phases of the AI boom. The first phase revolves around NVIDIA and AI chipmakers, while the second phase focuses on AI infrastructure, including semiconductor, data center, networking, cloud, and security firms. These stocks have significantly outperformed market benchmarks in 2024.
The third phase will involve companies integrating AI into their products to drive revenue growth. While these firms have lagged behind pure AI plays, their time is expected to come. The fourth phase includes businesses that will realize long-term productivity gains from AI adoption. Currently overlooked by the market, these companies are expected to see valuation expansions over time. The industrial sector exemplifies this trend. Since early 2023, industrial stocks have gained nearly 30%, with AI-exposed firms more than doubling in value. In Q4 2023, AI mentions in industrial earnings reports rose from 10% to over 30%. Goldman Sachs anticipates these trends will continue, with downstream AI stocks eventually rallying as their AI-driven efficiencies translate into earnings growth.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
As the sudden popularity of Chinese AI startup DeepSeek ignites a tech selloff in the US stock market, investors are closely monitoring the non-tech AI opportunities that hold explosive growth potential. Earlier this month, Goldman Sachs released an investor note detailing some of the non-tech beneficiaries of the AI boom. Per the bank, the rise of AI-driven data centers was fueling a massive increase in electricity demand, with power needs expected to grow by over 160% by 2030. Nuclear energy is poised to play a critical role in meeting this demand, but it won’t be the sole solution. Natural gas, renewables, and battery storage will also be essential, according to Goldman Sachs Research.
The report notes that big tech companies have already signed contracts for over 10 GW of potential new nuclear capacity in the US, with three nuclear plants possibly coming online by 2030. Globally, governments are becoming more supportive of nuclear power, with the COP28 summit setting a goal to triple global nuclear capacity by 2050. However, challenges such as labor shortages, permitting difficulties, and uranium supply constraints may slow progress, the report warned. Renewables will also be a major part of the energy mix, with 40% of new capacity expected to come from wind and solar. However, their intermittent nature means they must be paired with battery storage and baseload sources like nuclear or natural gas. Despite lower energy costs for renewables, transmission and storage limitations pose challenges.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
For this article, we selected non-tech AI stocks by consulting an investor note from prominent investment firm Goldman Sachs. 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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35 Non-Tech AI Opportunities Amid DeepSeek Selloff
35. Clarivate Plc (NYSE:CLVT)
Number of Hedge Fund Holders: 18
Clarivate Plc (NYSE:CLVT) operates as an information services provider in the Americas, the Middle East, Africa, Europe, and the Asia Pacific. A combination of factors makes this company a promising investment. The most noteworthy among them is the company’s modest increase in subscription revenues, as illustrated in the report for the third quarter of 2024. For instance, revenues increased $3 million, or 0.7%, to $411.1 million. Organic subscription revenues increased 0.6%, driven by price increases. Moreover, the British Library has selected the company to provide its library services and discovery platforms to create a more cohesive, streamlined and secure experience. The British Library will implement Alma, Primo VE and Rapido, which would help the company restore and improve access to the collection, enhance its support for research and make the knowledge and resources the company holds accessible to everyone.
34. Science Applications International Corporation (NASDAQ:SAIC)
Number of Hedge Fund Holders: 25
Science Applications International Corporation (NASDAQ:SAIC) provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. There are numerous reasons why investing in this company is worthwhile. The strongest reason is the company’s exceptional financial growth, as illustrated in the fiscal year report for 2024. For instance, in the fourth quarter of the fiscal year 2024, revenues were $1.74 billion, showing 7.7% organic growth, and in fiscal year 2024, revenues were $7.44 billion, indicating 7.4% organic growth. This organic growth reflects the impacts of divestitures and an additional five working days in the prior year, demonstrating resilience and adaptability in maintaining steady business expansion despite structural changes. In addition, the Business Intelligence Group named SAIC’s ReadyOne software a winning product at the 2024 BIG Innovation Awards. ReadyOne is SAIC’s platform to rapidly install and configure readily usable digital engineering ecosystems for engineering teams and stakeholders, which reflects the company’s commitment to AI and adaptability to changing market trends.
33. First American Financial Corporation (NYSE:FAF)
Number of Hedge Fund Holders: 25
First American Financial Corporation (NYSE:FAF) provides financial services. There are numerous reasons why investing in this company is worthwhile. The report for the third quarter of 2024 shows the company’s commitment to returning value to shareholders through share repurchases while managing earnings performance. For instance, the adjusted earnings per share (EPS) of $1.34 suggests the company’s underlying profitability remains strong. Moreover, the company repurchased 293,155 shares for a total of $16 million at an average price of $54.96. In addition, the company and Simplex 3D have launched a cutting-edge 3D platform for real estate professionals with data-rich visualizations of New York City and the Greater Metro Area. This initiative reflects the company’s commitment to leveraging AI and advanced technologies to deliver innovative solutions to its clients.
32. Kemper Corporation (NYSE:KMPR)
Number of Hedge Fund Holders: 26
Kemper Corporation (NYSE:KMPR) is a diversified insurance holding company that engages in the provision of insurance products to individuals and businesses in the United States. This company presents a highly rewarding investment opportunity for several reasons. The key factor is the strong financial performance and profitability of the company, as illustrated in the report for the third quarter of 2024. For instance, the company generated a 10.8% Return On Equity (ROE) and a 16.7% Adjusted ROE. The Specialty Property & Casualty (P&C) segment continues to drive profitable growth, as shown by the underlying combined ratio of 91.3%. This highlights effective risk management and underwriting discipline. Moreover, the Kemper Foundation, the philanthropic partner of Kemper Corporation, has announced new applications to support school-wide dual-language (Spanish-English) education programs for bilingual students in Title I elementary schools.
31. Robert Half Inc. (NYSE:RHI)
Number of Hedge Fund Holders: 30
Robert Half Inc. (NYSE:RHI) provides talent solutions and business consulting services in North America, South America, Europe, Asia, and Australia. There are various aspects that contribute to this company being an appealing investment. The most impactful one is the company’s consistent financial strength and its focus on rewarding investors with increasing dividends over time, as depicted in the report for the third quarter of 2024. For instance, cash flow from operations was $130 million. In September, the company distributed a 53-cent-per-share cash dividend to the shareholders of record for a total cash outlay of $54 million, and the company’s per-share dividend has grown 11.3% annually since its inception in 2004. Moreover, the company is highly committed to AI as it continues to transform its recruitment process. Using AI, recruiting professionals can generate real-time shortlists of candidates — including hybrid and remote workers — who have a proven track record, are active in the job market, and whose skills and work history closely match clients’ requirements.
30. Jones Lang LaSalle Incorporated (NYSE:JLL)
Number of Hedge Fund Holders: 31
Jones Lang LaSalle Incorporated (NYSE:JLL) operates as a commercial real estate and investment management company. This company stands out as a rewarding investment for several reasons. The most influential factor is the company’s financial performance in the report for the third quarter of 2024. Third-quarter revenue was $5.9 billion, increasing 15% in local currency. Also, there was a 21% rise in leasing within Markets Advisory in US office spaces, suggesting strong performance across various geographic regions and asset classes. Moreover, as per the company’s 2025 Global Data Center Outlook report, AI will continue to build momentum in 2025. The company has invested billions of dollars in AI over the last couple of years amid soaring demand for data center infrastructure.
29. Hawaiian Electric Industries, Inc. (NYSE:HE)
Number of Hedge Fund Holders: 32
Hawaiian Electric Industries, Inc. (NYSE:HE) engages in the electric utility businesses in the United States. There are various reasons that make this company a rewarding investment opportunity. The most compelling factor is its financial performance illustrated in the report for the third quarter of 2024. As per the report, total insurance recoveries and deferrals related to wildfire-related expenses provided a benefit of $27.4 million. Excluding these items, core net income was $52.2 million for the third quarter of 2024 compared to $61.5 million in the third quarter of 2023. This reflects the company’s resilience in managing unexpected expenses. Moreover, the company has designed a new three-year plan for wildfire prevention and resilience, including the deployment of new weather stations and AI-enabled cameras and the undergrounding of overhead power lines. The utility plans to deploy new technology, fortify infrastructure, minimize fire hazards, and expand community partnerships in an effort to reduce the risk of a wildfire started by its equipment, per actions detailed in a new Wildfire Safety Strategy.
28. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 33
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) operates as a healthcare, pharmacy, and retail company in the United States, the United Kingdom, Germany, and internationally. A combination of factors makes this company a promising investment. The most noteworthy among them is the company’s ability to drive consistent sales growth across all segments, signaling strong demand for its products and services. For instance, according to the fourth quarter report of 2024, sales increased 6% from the year-ago quarter to $37.5 billion, indicating an increase of 6.1% on a constant currency basis, reflecting sales growth across all segments. In addition, the company is amplifying its commitment to its patients and partners through the formation of the Walgreens Clinical Trials Patient Advisory Board. This would offer key patient insights that are an invaluable resource to the delivery and advancement of clinical trials.
27. R1 RCM Inc. (NASDAQ:RCM)
Number of Hedge Fund Holders: 33
R1 RCM Inc. (NASDAQ:RCM) provides technology-driven solutions that transform the patient experience and financial performance of hospitals, health systems, and medical groups. There are multiple factors that make this company a promising investment avenue. To start with, the report for the third quarter of 2024 showed the company’s ability to grow revenue as the reported revenue was $656.8 million, increasing $84 million or 14.7% compared to the same period last year. Moreover, the company brings the power of AI, Intelligent Automation and Deep Data Analytics to healthcare through proprietary RCM optimization engines that turn complex data into financial and operating performance improvements.
26. Brown & Brown, Inc. (NYSE:BRO)
Number of Hedge Fund Holders: 35
Brown & Brown, Inc. (NYSE:BRO) markets and sells insurance products and services in the United States, Canada, Ireland, the United Kingdom, and internationally. This company stands out as a rewarding investment for several reasons. The most influential factor is the company’s ability to drive positive financial growth and profitability, as reflected in the fourth quarter report of 2024. For instance, reported total revenues were $1.2 billion, indicating an increase of 15.4%, organic revenue growth was 13.8%, diluted net income per share of $0.73, and diluted net income per share was $0.86. This reflects solid profitability and effective financial management, showcasing the company’s ability to drive earnings while maintaining strong fundamentals. Moreover, the company has also earned the 2025 Military Friendly Employer designation.
25. Fidelity National Financial, Inc. (NYSE:FNF)
Number of Hedge Fund Holders: 36
Fidelity National Financial, Inc. (NYSE:FNF) provides various insurance products in the United States. There are numerous reasons why investing in this company is worthwhile. As per the report for the third quarter of 2024, the company delivered positive financial growth and expanded its revenue. For instance, for the Title Segment, total revenue was $2.1 billion, indicating a 12% increase over $1.9 billion in the third quarter of 2023. Total revenue, excluding recognized gains and losses, was $2 billion for the third quarter, showing a 6% increase over $1.9 billion in the third quarter of 2023. Adjusted pre-tax title margin was 15.9% for the quarter, compared to 16.2% in the third quarter of 2023. Moreover, the company is focusing on digitalization to enhance operational efficiency and customer satisfaction by investing in technology. By 2030, the company plans to drive digital transformation in the real estate market and work to build a new revenue model.
24. Lear Corporation (NYSE:LEA)
Number of Hedge Fund Holders: 36
Lear Corporation (NYSE:LEA) designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufacturers in North America, Europe, Africa, Asia, and South America. There are many reasons to consider this company a valuable investment. The leading factor is the company’s strong financial growth in the report for the third quarter of 2024. For instance, the company has delivered revenue of $5.6 billion compared to $5.8 billion in the third quarter of the prior year. Moreover, total company revenue outperformed industry volume by 3 percentage points, with 5 percentage points in E-Systems and 3 percentage points in seating, which shows that the company has maintained leadership in certain product segments. The company provides personalized user experiences through the deployment of advanced technologies like Seating and E-Systems designs, as well as manufacturing expertise.
23. ZoomInfo Technologies Inc. (NASDAQ:ZI)
Number of Hedge Fund Holders: 37
ZoomInfo Technologies Inc. (NASDAQ:ZI) owns and runs a market intelligence platform. There are many reasons to consider this company a valuable investment. Notably, as per the report for the third quarter of 2024, the company generated $18.2 million in cash flow from operations and $110.7 million in unlevered free cash flow during the quarter. The company ended the quarter with $147.7 million in cash and cash equivalents. These metrics reflect the company’s ability to generate healthy cash flow and maintain a strong cash balance. Moreover, the company has added a series of enhancements to ZoomInfo Copilot. For instance, the users can integrate Gong in ZoomInfo Copilot to unlock valuable insights from customer interactions, incorporate social proof into emails and detect customer dissatisfaction and potential churn risk by pulling AI-driven insights from G2 and TrustRadius. Lastly, the company has incorporated a new-gen AI model to deliver strategic account prioritization and a prioritized seller homepage based on key signals and insights.
22. The Williams Companies, Inc. (NYSE:WMB)
Number of Hedge Fund Holders: 37
The Williams Companies, Inc. (NYSE:WMB) operates as an energy infrastructure company primarily in the United States. This company stands out as a rewarding investment for several reasons. Notably, as per the report for the third quarter of 2024, GAAP net income was $705 million, or $0.58 per diluted share (EPS), showing an increase of 8% as compared to the third quarter of the prior year. This demonstrates the company’s ability to sustain profitability and improve financial performance. In addition, adjusted net income was $528 million, or $0.43 per diluted share (Adj. EPS), which reflects the company’s financial strength. The company has added 12 new natural gas projects by 2027, increasing the gas capacity by 4.2 billion cubic feet per day (bcf/d). These expansions are designed to support the reliability of the US energy grid and meet the growing energy needs of sectors like AI and data centers.
21. Voya Financial, Inc. (NYSE:VOYA)
Number of Hedge Fund Holders: 38
Voya Financial, Inc. (NYSE:VOYA) engages in the provision of workplace benefits and savings products in the United States and internationally. There are numerous reasons why investing in this company is worthwhile. The strongest reason is the company’s solid financial performance illustrated in the report for the third quarter of 2024. As per the reports net income available to common shareholders was $98 million, or $0.98 per diluted share, and after-tax adjusted operating earnings were $190 million, or $1.90 per diluted share. This reflects the company’s ability to generate consistent earnings and manage expenses effectively, highlighting operational efficiency. In addition, the company expects to significantly increase excess capital generation in 2025, driven by continued growth in core businesses. Moreover, the company has introduced Collaborative Alpha, a strategy that combines human expertise with AI to maximize investment outcomes. This approach would break down traditional investment silos, integrating various tools to achieve superior results.
20. The New York Times Company (NYSE:NYT)
Number of Hedge Fund Holders: 38
The New York Times Company (NYSE:NYT) creates, collects, and distributes news and information worldwide. A combination of factors makes this company a promising investment. For instance, the report for the third quarter of 2024 highlights the company’s ability to drive revenue growth by optimizing pricing strategies and improving its pricing structure over time. The total digital-only average revenue per user (ARPU) increased 1.8% year-over-year to $9.45, primarily as a result of subscribers transitioning from promotional to higher prices and price increases on tenured non-bundled subscribers. Moreover, the company added approximately 260,000 net digital-only subscribers compared with the end of the second quarter of 2024, bringing the total number of subscribers to 11.09 million. Additionally, the company has established a dedicated team to explore and integrate AI technologies within its newsroom operations. This initiative focuses on developing and testing generative AI and machine learning applications to support journalists and enhance content delivery.
19. Encompass Health Corporation (NYSE:EHC)
Number of Hedge Fund Holders: 38
Encompass Health Corporation (NYSE:EHC) provides post-acute healthcare services in the United States and Puerto Rico. This company stands out as a top investment choice for a variety of reasons. To begin with, the report for the third quarter of 2024 showed the company’s strong revenue growth and operating performance as revenue growth recorded was 11.9%, which resulted primarily from discharge growth of 8.8%, including same-store growth of 6.8%. Net revenue per discharge grew 2.5%. Cash flows provided by operating activities increased 24.4% to $267.8 million, primarily due to an increase in net income partly offset by higher cash tax payments. This demonstrates strong cash generation from operations, reflecting improved profitability and the company’s ability to convert sales into actual cash. Moreover, this company stands out by using several AI-driven technologies that enhance patient care and operational efficiency. For instance, the company is using AI-driven models designed to predict and prevent falls in patients, ensuring greater safety within rehabilitation hospitals. The company’s focus on fall prevention is integrated into its AI applications, helping to reduce one of the most common risks in healthcare settings.
18. DaVita Inc. (NYSE:DVA)
Number of Hedge Fund Holders: 39
DaVita Inc. (NYSE:DVA) provides kidney dialysis services for patients suffering from chronic kidney failure in the United States. This company stands out as a rewarding investment for several reasons. The most influential factor is the strong financial performance in the report for the third quarter of 2024. For instance, reported consolidated revenues were $3.2 billion, which shows the scale of the company’s business activities and its ability to generate sales. Additionally, operating income was $535 million, which reflects the company’s ability to generate profit from its core operations, excluding non-operational items such as taxes and interest. Also, diluted earnings per share was $2.50 and adjusted diluted earnings per share was $2.59, which represents the company’s ability to generate profits for its shareholders. Moreover, DaVita has been actively integrating AI to enhance patient care. The company is developing over 40 AI models, which would improve treatment outcomes and early detection of chronic illnesses.
17. Tetra Tech, Inc. (NASDAQ:TTEK)
Number of Hedge Fund Holders: 39
Tetra Tech, Inc. (NASDAQ:TTEK) provides consulting and engineering services in the United States and internationally. There are various aspects that contribute to this company being an appealing investment. The most impactful one is the company’s strong growth and increasing market demand, illustrated in the report for the third quarter of 2024. For instance, the annual revenue was $5.20 billion, increasing 15% year-on-year, highlighting significant overall sales growth. Moreover, record annual net revenue was $4.32 billion, increasing 15% year-over-year, which reflects a higher level of sales after accounting for returns, discounts, and other adjustments. In addition, the company is using its Tetra Tech Delta technology enablement program to support innovation, community partnerships, and data-sharing infrastructure to better collect, process, and share high-quality georeferenced training data for ML models. This Enabling Satellite-based Crop Analytics at Scale (ECAAS) Initiative is a multiphase project funded by the Bill & Melinda Gates Foundation to unlock the promise of satellite remote sensing for smallholder agriculture.
16. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Number of Hedge Fund Holders: 42
Willis Towers Watson Public Limited Company (NASDAQ:WTW) operates as an advisory, broking, and solutions company worldwide. There are many reasons to consider this company a valuable investment. The leading factor is the company’s strong financial performance. For instance, reported revenue increased 6% to $2.3 billion for the third quarter of 2024, with organic growth of 6% for the quarter. Moreover, the R&B segment had revenue of $940 million in the third quarter of 2024, an increase of 10% from $855 million in the prior year, reflecting strong growth in the R&B segment. In addition, the company has announced the launch of the Investment Management Insurance (IMI) Plus product in the US. This unified management and professional policy addresses the specific needs of asset managers, providing integrated protection and streamlined management across key risk categories.
15. CarMax, Inc. (NYSE:KMX)
Number of Hedge Fund Holders: 44
CarMax, Inc. (NYSE:KMX) operates as a retailer of used vehicles and related products in the United States. This company stands out as a rewarding investment for several reasons. The most influential factor is the company’s strong performance in its retail and wholesale segments. As per the report for the third quarter of 2024, retail used unit sales increased by 5.4%, and comparable store used unit sales increased by 4.3%; wholesale units increased by 6.3%. Moreover, the total gross profit of $677.6 million increased by 10.6%, driven by unit volumes and strong unit margin performance. In addition, CarMax has become a Founding Partner of the team and the official used car retailer of the Valkyries. This partnership with the Golden State Valkyries will be rooted in community impact, with a dedicated focus on Bay Area youth, and will bring fans closer to the team through exclusive behind-the-scenes content and special access moments throughout the year. Lastly, the company has integrated Microsoft Azure OpenAI Service into business as well.
14. International Paper Company (NYSE:IP)
Number of Hedge Fund Holders: 44
International Paper Company (NYSE:IP) produces and sells renewable fiber-based packaging and pulp products in North America, Latin America, Europe, and North Africa. This company is a promising investment opportunity for several reasons. Notably, as per the report for the third quarter of 2024, reported net earnings were $150 million or $0.42 per diluted share, and adjusted operating earnings (non-GAAP) were $153 million or $0.44 per diluted share. This demonstrates the company’s solid earnings performance, both on a reported and adjusted basis, which can be used by investors to assess ongoing profitability and operational health. Moreover, the company has announced a $260 million investment to construct a new, state-of-the-art corrugated packaging facility in Waterloo, Iowa. This project highlights the company’s commitment to growth and innovation while creating new opportunities in the Waterloo region.
13. Flex Ltd. (NASDAQ:FLEX)
Number of Hedge Fund Holders: 45
Flex Ltd. (NASDAQ:FLEX) offers manufacturing solutions across Asia, the Americas, and Europe. This company stands out as a rewarding investment for several reasons. The most influential factor is the company’s financial growth in the third quarter of 2024. For instance, the reported net sales were $6.6 billion, indicating demand for the company’s products or services. In addition, GAAP operating income was $334 million, and adjusted operating income was $399 million, reflecting the profitability of the company’s core business operations. Moreover, the company has acquired JetCool Technologies, a leading liquid cooling company for data centers. This acquisition would strengthen the company’s data center and power portfolio, further enabling the company to address the growing power, heat, and scalability challenges associated with AI workloads.
12. News Corporation (NASDAQ:NWSA)
Number of Hedge Fund Holders: 46
News Corporation (NASDAQ:NWSA) is a media and information services company that creates and distributes authoritative and engaging content, and other products and services for consumers and businesses worldwide. This company is a promising investment opportunity for several reasons. The most persuasive factor is the company’s ability to drive growth and boost profitability through a strategic focus on high-performing segments and operational efficiency. For instance, in the report for the fiscal year 2024, total segment EBITDA rose 8% to $1.54 billion, inspired by growth across the core pillars – Book Publishing, Digital Real Estate Services and Dow Jones, where profitability and revenue flourished. Overall revenues for the year rose 2% to $10.09 billion, while net income expanded by a robust 89% to $354 million. Moreover, the company’s partnership with OpenAI enables the company to work closely with a trusted pre-eminent partner to fashion a future for professional journalism and for provenance. Such collaborations showcase the company’s commitment to integrating AI and meeting the demands of the ever-evolving digital landscape.
11. Universal Health Services, Inc. (NYSE:UHS)
Number of Hedge Fund Holders: 50
Universal Health Services, Inc. (NYSE:UHS) owns and operates acute care hospitals, and outpatient and behavioral health care facilities. This company stands out as a top investment choice for a variety of reasons. To begin with, the report for the third quarter of 2024 showed the company’s strong financial performance, demonstrating increased profitability and revenue growth from the previous year. For instance, reported net income attributable to UHS was $258.7 million during the third quarter of 2024, as compared to $167 million during the third quarter of 2023. Net revenues increased by 11.2% to $3.9 billion during the third quarter of 2024, as compared to $3.5 billion during the third quarter of 2023. Moreover, the company has been named a 2024 Human Experience (HX) Guardian of Excellence Award winner. Lastly, initiatives like ambient AI scribe also solidify the company’s commitment to integrating AI, as this project is aimed at enhancing clinical documentation efficiency and streamlining healthcare operations.
10. Marsh & McLennan Companies, Inc. (NYSE:MMC)
Number of Hedge Fund Holders: 54
Marsh & McLennan Companies, Inc. (NYSE:MMC) is a professional services company that provides advice and solutions to clients in the areas of risk, strategy, and people worldwide. This company offers a range of advantages as an investment. To begin with, the company demonstrated strong financial growth, as illustrated in the report for the third quarter of 2024. For instance, consolidated revenue was $18.4 billion, an increase of 7% on both a GAAP and underlying basis, compared to the prior year period. Operating income was $4.7 billion, an increase of 12% from the prior year period. Adjusted operating income rose 12% to $4.9 billion, demonstrating the company’s successful ongoing operational performance. Moreover, the company has established an AI Academy to train employees in generative technologies. The company also provided tens of thousands of employees with a range of generative AI tools, resulting in significant time savings and increased productivity.
9. Illumina, Inc. (NASDAQ:ILMN)
Number of Hedge Fund Holders: 54
Illumina, Inc. (NASDAQ:ILMN) offers sequencing and array-based solutions for genetic and genomic analysis in the United States, Singapore, the United Kingdom, and internationally. The appeal of this company as an investment stems from multiple factors. For instance, as per the report for the third quarter of 2024, GAAP operating margin was 68.6%, and non-GAAP operating margin was 22.6%. This reflects the company’s efficient cost management or high-margin products. Moreover, the company’s non-GAAP operating margin guidance ranges from 21% to 21.5%, demonstrating cost management and operational performance. In addition, the company, along with Regeneron, plans to invest $139.5 million in Truveta to build the largest genetic database. The Truveta Genome Project aims to establish the world’s largest and most diverse database of genetic information.
8. Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Holders: 56
Coupang, Inc. (NYSE:CPNG) is a South Korea-based ecommerce firm. It was one of the first retailers to use AI and machine learning to improve the ecommerce side of the business, setting the company apart from the competition. There are various aspects that make this company a promising investment avenue. For instance, the report for the third quarter of 2024 illustrates that net revenues were $7.9 billion, increasing 27% year-over-year on a reported basis and 32% year-over-year on an FX-neutral basis; excluding Farfetch, the growth was 20% year-over-year on a reported basis and 25% year-over-year on an FX-neutral basis. This underscores the company’s ability to drive organic growth and expand its market share. Moreover, Coupang has also launched a new division, R.Lux, an online shopping platform focused on the sale of premium cosmetics. The service features premium packaging and same-day delivery via Rocket Delivery.
7. IQVIA Holdings Inc. (NYSE:IQV)
Number of Hedge Fund Holders: 63
IQVIA Holdings Inc. (NYSE:IQV) engages in the provision of advanced analytics, technology solutions, and clinical research services to the life sciences industry in the Americas, Europe, Africa, and the Asia-Pacific. This company stands out as a top investment choice for a variety of reasons. Notably, as per the report for the third quarter of 2024, the reported revenue was $3,896 million, GAAP net income was $285 million, and Adjusted EBITDA was $939 million, which reflects solid revenue and robust operational performance. Moreover, GAAP Diluted earnings per share were $1.55 and adjusted diluted earnings per share were $2.84, which shows the company’s profitability. In addition, the company’s strategic collaboration with NVIDIA aims to leverage the potential of AI in healthcare and life sciences. This collaboration would accelerate IQVIA Healthcare-grade AI, enabling new levels of agentic automation of complex and time-consuming workflows across the therapeutic life cycle.
6. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders: 66
Pinterest, Inc. (NYSE:PINS) operates as a visual search and discovery platform in the United States and internationally. This company presents a highly rewarding investment opportunity for several reasons. To begin with, the report for the third quarter of 2024 delivered strong results indicating the company’s operational efficiency and positive revenue growth. For instance, reported revenue was $898 million, showing an increase of 18%. In addition, it recorded 537 million global monthly active users, showing an increase of 11%. This growth in monthly active users indicates a strong user engagement, potentially driven by better content, product offerings, marketing efforts, or platform improvements. Moreover, the company integrated new generative AI features for advertisements. Tests with Walgreens show an increase of 55% in clickthrough rates and a 13% decrease in cost-per-click when using AI-generated backgrounds.
5. Tenet Healthcare Corporation (NYSE:THC)
Number of Hedge Fund Holders: 66
Tenet Healthcare Corporation (NYSE:THC) operates as a diversified healthcare services company in the United States. There are several factors that contribute to making this company a rewarding investment opportunity. The most compelling aspect is the company’s strong financial performance driven by strategic asset management through hospital divestitures. For instance, net income available to common shareholders in the third quarter of 2024 was $472 million, or $4.89 per diluted share, including an after-tax gain of $209 million, or $2.16 per diluted share, primarily associated with previously announced hospital divestitures. Moreover, the company’s partnership with Commure to deploy an AI-powered scribe across its employed physician network, Tenet Physician Resources, has caught the attention of investors. This AI platform is designed to automate clinical documentation, which would reduce administrative burdens on healthcare providers and enhance patient care.
4. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 71
Occidental Petroleum Corporation (NYSE:OXY) engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. There are various aspects that make this company a promising investment avenue. For instance, as per the reports for the third quarter of 2024, strong operational performance drove operating cash flow of $3.8 billion and operating cash flow before working capital of $3.1 billion. This underscores the company’s strong operational performance. Additionally, capital spending of $1.7 billion and contributions from noncontrolling interest of $47 million resulted in quarterly free cash flow before working capital of $1.5 billion. This represents the company’s ability to generate substantial free cash flow. Moreover, Oxy is developing numerous nascent technologies and approaches to help find net-zero fuel solutions. A big part of this innovation involves removing emissions directly from the atmosphere right now while simultaneously working toward global commercialization of alternative fuels and materials.
3. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 75
Costco Wholesale Corporation (NASDAQ:COST) engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, Mexico, Japan, the United Kingdom, Korea, and Australia. This company presents a highly rewarding investment opportunity for several reasons. Notably, according to the report for the third quarter of 2024, the company reported net sales of $78.2 billion, an increase of 1.0% compared to net sales of $77.4 billion in the fourth quarter of fiscal year 2023. For the fourth quarter of the fiscal year, the company reported net sales of $249.6 billion, an increase of 5% from $237.7 billion reported in the fourth quarter of the prior year. This shows the company’s ability to maintain revenue growth and manage fiscal year variations effectively. Moreover, the company is planning to construct a new warehouse in Westgate West Shopping Center. This would serve the local community with competitively priced goods and services from nationally known brands and regional businesses.
2. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 88
Walmart Inc. (NYSE:WMT) engages in the operation of retail, wholesale, and other units worldwide. There are numerous reasons why investing in this company is worthwhile. To start with, the company showed strong sales performance, suggesting expansion in operations or increased demand for products/services in the report for the third quarter of 2024, as the consolidated revenue was $169.6 billion, showing an increase of 5.5% from the prior year, and consolidated gross margin rate increased by 21 basis point, led by Walmart US. Moreover, the company is also introducing Walmart Cross Border, a new import service for full-container-load shipments that will facilitate the transportation of inbound goods from Asian ports directly to WFS facilities in the US.
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. This company offers a robust investment case for several reasons. To begin with, as per the report for the third quarter of 2024, free cash flow less principal repayments of finance leases and financing obligations increased to $44.9 billion for the trailing twelve months, compared with $15.9 billion for the trailing twelve months of the prior year. This reflects the company’s enhanced ability to generate cash flow from its core operations after accounting for the repayment of finance leases and other financing obligations. Moreover, the company has introduced multiple new generative AI-powered features, including Rufus, a generative AI expert shopping assistant available in Canada, France, Germany, India, Italy, Spain, and the UK. In addition, Project Amelia was also introduced, which is an AI assistant for sellers that offers tailored business insights to boost productivity and drive seller growth.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a 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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