Europe is back and means business in the artificial intelligence race. That’s the sentiment echoed at the Artificial Intelligence Action Summit in Paris as France President Macron touted a $112.8 billion investment in AI. The massive investment comes as four of the biggest US tech giants plan to spend $325 billion to further strengthen their AI ambitions in 2025.
France’s $112.8 billion underscores Europe’s desire to take on the US and China, which have dominated the AI debate on innovations and investment in recent years. For starters, the US is receiving praise as part of the $500 billion Stargate project as China appears to have an edge on innovation following DeepSeek’s revelation of cost-effective AI models.
Critics of Europe have long argued that the continent has overregulated the tech sector, hindering innovation. Nevertheless, some in the technology sector believe that Europe is headed in the right direction, even though that perception hasn’t completely changed.
“As a European region, at least, we are starting to see global leaders emerge, and that’s the thing we really need,” Victor Riparbelli, CEO of AI video company Synthesia, told CNBC in an interview on Monday.
While there appears to be a tussle or fierce competition between nations to spearhead the AI revolution, China has made it clear that it is willing to work with other countries. Beijing insists it is willing and ready to promote development, safeguard security, and share achievements in the field of artificial intelligence.
According to Chinese President Xi Jinping’s special representative, Zhang Guoqing, AI has become an essential driving force for the new round of scientific and technological revolution and industrial transformation. China has always participated in global cooperation and governance on AI with a highly responsible attitude.
Corporations between nations instead of competing against each other to control the spoils are key to unlocking the full advantages of the AI revolution. Likewise, economists at Goldman Sachs expect widespread adoption of generative AI to raise US labour productivity by 15% over the next 10 years. It is also likely to unlock about $4.5 trillion in annual US GDP.
AI economic benefits are anticipated to flow to hardware and infrastructure providers early on. Later, they will spread to platform and application developers, and finally, they will manifest as increases in productivity and efficiency throughout the industry as a whole. According to the Goldman Sachs team, the US AI investment cycle will peak at 2% of GDP before declining as the compute costs of running AI queries and training AI models decline. Investment in AI software was expected to rise gradually over time as end-user adoption rose.
According to the Goldman Sachs team’s projections, the US will begin to see productivity gains from generative AI technology in 2027, with the impact peaking in the early 2030s. According to these projections, the US timeline is a few years ahead of other developed markets and important emerging market nations.
“Given that potential cost savings from generative AI are large and the marginal cost of deployment once applications are developed will likely be very small, we see the adoption of generative AI as more of a question of ‘when’ rather than ‘if,” Joseph Briggs, co-leader of the Global Economics team.
According to Briggs, the kinds of work tasks that generative AI can automate would save several thousand dollars annually per worker, and Goldman Sachs Research continues to predict that AI adoption will increase in the medium term.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
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8. IREN Limited (NASDAQ:IREN)
Number of Hedge Fund Holders: 28
IREN Limited (NASDAQ:IREN) offers high-performance computing solutions, including artificial intelligence cloud services. Brett Knoblauch of Cantor Fitzgerald reiterated a Buy rating on the stock on February 13th, with a $23 price target. The buy rating comes on the heels of the company delivering record revenue of $53.7 million and operating cash flow of $18.7 million in the fiscal second quarter of 2025.
While IREN Limited (NASDAQ:IREN) is best known for its bitcoin mining operations, it’s also strategically shifting towards high-performance computing in offering AI cloud services. IREN is also targeting artificial intelligence opportunities backed by its new 600MW Sweetwater 2 site, which is expected to create a 2GW data center hub. The company’s AI cloud service revenue significantly improved in the second quarter totaling $0.8 million.
7. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 36
SAP SE (NYSE:SAP) is a technology company that provides applications, technology, and services worldwide. On February 13th, the company confirmed the launch of SAP Business Data Cloud. The data management platform is designed to help enterprises unlock data across business units and accelerate artificial intelligence adoption. In addition, the company inked a strategic collaboration with Databricks to integrate the power of Databricks directly into SAP Business Data Cloud.
The launch of Business Data Cloud comes amid growing concerns that businesses have trouble executing large-scale AI projects due to data source integration and data quality issues. Business AI can fully utilize enterprise data thanks to SAP Business Data Cloud. It creates a revolutionary solution enabling organizations to do more with their data than ever by fusing Databricks’ world-class data engineering capabilities with SAP’s distinct expertise in mission-critical, end-to-end processes and semantically rich data. Therefore, the solution seeks to make it easy for businesses to reap the benefits of their AI investments.
Muhammad Alam, a Member of the Executive Board of SAP SE (NYSE:SAP), says: “Our customers are telling us that they’re struggling to implement and realize the value of AI in their organizations. Getting reliable, high-quality datasets across the enterprise to power this AI is hard. Many have done hundreds of proof of concepts but have been unable to get them to production effectively.”
6. CyberArk Software Ltd. (NASDAQ:CYBR)
Number of Hedge Fund Holders: 51
CyberArk Software Ltd. (NASDAQ:CYBR) and its subsidiaries develop, market, and sell software-based identity security solutions and services. On February 13th, the company moved to strengthen its prospects in the identity security market with the acquisition of Zilla Security for $165 million plus a $10 million performance-based earn-out. The acquisition paves the way for merging the company’s identity security solutions with Zilla’s modern identity governance and administration solution.
The acquisition should add two key products to CyberArk’s Identity Security Platform—first, Zilla Provisioning offers AI-driven automated access management for onboarding, role transitions, and offboarding. Secondly, Zilla Comply streamlines user access reviews and audit documentation. The integration of the two solutions will address a significant market gap in cloud-native identity management. With its proven 5x faster deployment and 80% lower access review effort, Zilla’s AI-driven strategy puts CyberArk Software Ltd. (NASDAQ:CYBR) is in a strong position to take a sizable chunk of the enterprise IGA market.
CyberArk CEO Matt Cohen stated, “By expanding the CyberArk Identity Security Platform with Zilla’s modern IGA capabilities, we will reshape identity governance with scalable automation that delivers compliance and helps maximize security for the modern enterprise.”
5. Snowflake Inc (NYSE:SNOW)
Number of Hedge Fund Holders: 71
Snowflake Inc (NYSE:SNOW) is a technology company that provides a cloud-based data platform that enables customers to consolidate data into a single source of truth to drive meaningful business insights and share data. On February 11th, the company confirmed the expansion of its AI DATA cloud with support from Microsoft Azure Mexico.
The expansion and strategic collaboration with Microsoft strengthens Snowflake Inc’s (NYSE:SNOW) capability to provide customers with a cloud platform that meets data residency and sovereignty requirements. Likewise, organizations in Latin America will be able to leverage built-in security and governance solutions powered by artificial intelligence. Additionally, they should become more data-driven as they capitalize and deploy generative AI capabilities.
Ernesto Serrano, Country Manager, Mexico, Snowflake, stated, “Snowflake is committed to providing the enterprises of the world with the infrastructure necessary to succeed in the age of AI. By providing support for Azure Mexico to local businesses, Snowflake customers can further reduce latency and optimize performance for critical workloads all with the built-in security and governance of the AI Data Cloud.”
4. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 71
Datadog, Inc. (NASDAQ:DDOG) is a technology company that operates an observability and security platform for cloud applications. Its products comprise infrastructure and application performance monitoring, log management, and digital experience monitoring. On February 11th, Blair Abernethy of Rosenblatt reiterated a Buy rating on the stock and hiked the price target to $160 from $148.
Datadog, Inc. (NASDAQ:DDOG) has emerged as one of the biggest investors in artificial intelligence as it looks to strengthen its cloud offerings and competitive edge. The platform from Datadog keeps an eye on a variety of computer systems and compiles all of the diagnostic information into a single, cloud-based dashboard. Cloud-based AI apps are expected to be widely adopted, which is good news for businesses like Datadog, which offers cloud infrastructure monitoring software. IT specialists find it much simpler to identify possible issues using that method.
3. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 78
ServiceNow, Inc. (NYSE:NOW) is a software application company that offers end-to-end digital transformation, artificial intelligence, machine learning, robotic process automation, and development tools. As a leading provider of AI platforms for business transformation, the company launched the new Government Transformation Suite on February 12th. The AI-powered suite is designed to increase visibility and accelerate return on investments while also accelerating efficiencies in federal agencies.
It is intended to optimize software investments, help federal agencies manage assets, save time, and change the experience of government employees. About $125 billion is spent annually on IT by the US government, much of which cannot be audited or measured against real usage or mission requirements. With its single architecture and single data model, the AI-first ServiceNow Platform serves as a unifier on top of obsolete tech stacks and legacy systems to activate workflows across departments and simplify complexity. Fueled by millions of automation, knowledge bases, and tools, and with access to trillions of workflow executions, ServiceNow, Inc. (NYSE:NOW) has expanded its capabilities to boost productivity and reduce costs.
Steve Walters, senior vice president, public sector, ServiceNow, stated, “The federal government is focused on improving programs and policies through transparency, efficiency, and accountability is a critical imperative. The new ServiceNow Government Transformation Suite helps agencies work smarter and drive efficiency at speed to move beyond incremental improvements to exponential gains. The goal of Government Transformation Suite is to help agency leaders demonstrate ROI on their technology investments, while also navigating modernization and efficiency priorities by adding intelligence, speed, and staying mission ready.”
2. Oracle Corp (NYSE:ORCL)
Number of Hedge Fund Investors: 91
Oracle Corp (NYSE:ORCL) is a software infrastructure company that offers products and services that address enterprise information technology environments. The company’s chairman and co-founder, Larry Ellison, reiterated on February 12th that governments should strive to consolidate national data for consumption by artificial intelligence models.
According to Ellison, unifying data about health, agriculture, infrastructure, procurement, and borders is the missing link to taking full advantage of artificial intelligence. The remarks come as the software giant works alongside ChatGPT developer OpenAI and Softbank to try to expand artificial intelligence infrastructure in the US as part of the Stargate project.
1. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 123
Adobe Inc. (NASDAQ:ADBE) is a software infrastructure company that offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content. On February 12th, Adobe released the Firefly Video Model, an AI tool for generating video clips, to compete with models from OpenAI, Runway, and Meta Platforms.
The tool integrates with Premiere Pro and generates five-second clips at 1080p resolution, with pricing set at $9.99 for 20 clips per month and $29.99 for 70 clips per month. Premium pricing for studios will be announced later. Alexandru Costin, Adobe’s vice president of generative AI, emphasized quality over clip length:
“We actually think that great motion, great structure, great definition scheme, making the actual clip look like it was film, is more important than making a longer clip that’s unusable.”
While we acknowledge the potential of Adobe Inc. (NASDAQ:ADBE) as an investment, our conviction lies in the belief that 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 ADBE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
