5 Generative AI Stocks To Watch Amidst Copyright Concerns

In this article, we will be taking a look at 5 generative AI stocks to watch amidst copyright concerns. To read our detailed analysis of current developments in the generative AI space, you can go directly to see the 10 Generative AI Stocks To Watch Amidst Copyright Concerns.

5. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 49

Upside Potential: 10.16%

Average Analyst Price Target: $146.40

International Business Machines Corporation (NYSE:IBM) is a technology company using generative AI through its Watsonx.ai.

We saw 49 hedge funds holding stakes in International Business Machines Corporation (NYSE:IBM) during the first quarter, with a total stake value of $1.5 billion.

Shannon Cross at Credit Suisse holds an Outperform rating on International Business Machines Corporation (NYSE:IBM) shares as of June 26, alongside a $162 price target.

4. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 243

Upside Potential: 11.20%

Average Analyst Price Target: $141.37

Amazon.com, Inc. (NASDAQ:AMZN) had 243 hedge funds long its stock during the first quarter, with a total stake value of $25.8 billion.

DBS Bank analyst Sachin Mittal initiated coverage on Amazon.com, Inc. (NASDAQ:AMZN) shares with a Buy rating on July 7, alongside a $150 price target.

Amazon.com, Inc. (NASDAQ:AMZN) has also joined the generative AI race by launching two AI language models on Amazon Web Services, which will allow customers to build their own AI bots.

Here’s what ClearBridge Investments said about Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2023 investor letter:

“2023 has so far marked a return to mega cap leadership, with Apple, Microsoft, Alphabet, Amazon.com, Inc. (NASDAQ:AMZN) and Nvidia accounting for approximately two thirds of the benchmark return. At 41.3%, the five largest stocks in the market represent the highest concentration in the 26-year history of the Russell 1000 Growth Index. Among these names, we maintain overweights to Nvidia (+246 bps) and Amazon (+117 bps), underweights to Microsoft (-353 bps) and Apple.

The Strategy’s IT holdings also drove performance in the second quarter, led by the continued rerating of graphics chipmaker Nvidia as a key beneficiary of the generative AI boom. AI-connected holdings Microsoft and Amazon also delivered strong gains.”

3. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 132

Upside Potential: 13.94%

Average Analyst Price Target: $480.61

NVIDIA Corporation (NASDAQ:NVDA) is vital to the operation of OpenAI’s ChatGPT since the company’s GPUs are being used to train the chatbot. Lawsuits against OpenAI and other generative AI companies relying on NVIDIA Corporation (NASDAQ:NVDA) may thus spell bad news for the chipmaker as well.

In the first quarter, 132 hedge funds held stakes in NVIDIA Corporation (NASDAQ:NVDA). Their total stake value was $12.3 billion.

John Vinh at Keybanc holds an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA) shares as of July 11. He also raised his price target on the stock from $500 to $550.

Artisan Partners mentioned NVIDIA Corporation (NASDAQ:NVDA) in its second-quarter 2023 investor letter:

“Top contributors to performance for the quarter included graphics semiconductor company NVIDIA Corporation (NASDAQ:NVDA). Nvidia rose after reporting strong results and forecasting significantly higher data center revenues for the coming quarter, driven by rising artificial intelligence investments around the world.

When we are successful in achieving disproportionate equity outcomes, we need a process for managing them. Entering this year, we had a ~6.5% position in Nvidia. Due to the enthusiasm for generative AI and a rapid conclusion to “cloud optimization,” the stock has surged 189.5% this year including 52.31% in Q2. We retained an investment in Nvidia with less capital at risk, an approach which afforded us the potential to prudently participate in excellent investments over long periods of time. Notably, despite our gradual position reductions, Nvidia has contributed 1491bps to performance since inception. In turn, these value pathways form the foundation upon which our risk management framework rests, and put us in position to execute our investment program in future periods of duress.”

2. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 43

Upside Potential: 33.32%

Average Analyst Price Target: $190.58

Baidu, Inc. (NASDAQ:BIDU) was spotted in the portfolios of 43 hedge funds during the first quarter, with a total stake value of $2.1 billion.

Baidu, Inc. (NASDAQ:BIDU) is a Chinese company that has launched its own AI chatbot, the Ernie bot, as a rival to ChatGPT in the generative AI space.

Morgan Stanley’s Gary Yu upgraded shares of Baidu, Inc. (NASDAQ:BIDU) from Equal Weight to Overweight on June 20. The analyst also raised his price target from $160 to $190.

Here’s what Tweedy, Browne said about Baidu, Inc. (NASDAQ:BIDU) in its first-quarter 2023 investor letter:

“Many, if not most, stocks held in the Funds’ portfolios performed quite well in the first quarter. This was particularly true for the Funds’ non-US equity holdings, many of which have come into their own over the last two quarters, despite years of underperformance versus their US counterparts – a welcome shift given that our Funds’ portfolios have been somewhat non-US-centric in terms of their portfolio allocations for well over a decade. The Funds also received a long overdue boost from their Chinese and Hong Kong-based holdings in the wake of China’s reopening and the government’s signaling of a relaxation of their interventionist policies. This included strong returns in Baidu, Inc. (NASDAQ:BIDU) among others.”

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 128

Upside Potential: 57.20%

Average Analyst Price Target: $142.36

Fawne Jiang at Benchmark holds a Buy rating on Alibaba Group Holding Limited (NYSE:BABA) shares as of June 21, alongside a $180 price target.

Alibaba Group Holding Limited (NYSE:BABA) is another Chinese company that is trying to compete with ChatGPT, having released its own chatbot by the name of Tongyi Qianwen.

Our hedge fund data shows 128 funds long Alibaba Group Holding Limited (NYSE:BABA) during the first quarter, with a total stake value of $5.9 billion.

Baron Funds said the following about Alibaba Group Holding Limited (NYSE:BABA) in its first-quarter 2023 investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) is the largest retailer and e-commerce company in China. Alibaba operates shopping platforms Taobao and Tmall and owns 33% of Ant Group, which operates Alipay, China’s largest third-party online payment provider. Shares of Alibaba were up this quarter, given meaningful margin expansion, guidance to stabilize core commerce market share in China, and an announced plan to split the company into six units which could further unlock value. We retain conviction that Alibaba is well positioned to benefit from China’s reopening and the ongoing growth in online commerce and cloud in China.”

See also 10 Best Artificial Intelligence Stocks Under $20 and 15 Best Artificial Intelligence (AI) Stocks to Buy.