As the US stock markets were catching up with the tech disruption led by cheap Chinese AI models, US President Donald Trump’s decision to impose tariffs against countries, including a 10% tariff on China, is driving market volatility.
On February 4th, the US stock index futures were marginally lower as investors refrained from risky assets after China announced retaliatory tariffs against America. Futures tied to the Dow Jones Industrial Average were down 0.2% or 77 points. Beijing slapped tariffs of up to 15% on US coal imports and 10% higher duties on crude oil, farm equipment, and some cars, effective February 10th.
Trump also announced a 25% tariff on goods from Mexico and Canada but later agreed to a 30-day pause on February 3rd in return for concessions on border and crime from both countries.
Elsewhere, in the world of AI, OpenAI CEO Sam Altman inked a deal with tech giant Kakao in South Korea on February 4th as part of plans to create new alliances after DeepSeek’s impact on the global AI industry.
“We’re excited to bring advanced AI to Kakao’s millions of users and work together to integrate our technology into services that transform how Kakao’s users communicate and connect,” said Altman. However, Altman reportedly admitted at a closed meeting with South Korean AI developers that Open AI “hasn’t found a strategy yet” to respond to DeepSeek.
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 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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8. Knightscope Inc. (NASDAQ:KSCP)
Number of Hedge Fund Holders: N/A
Knightscope Inc. (NASDAQ:KSCP) develops and deploys AI technologies and autonomous security robots that use lasers and advanced sensors to patrol public areas like corporate campuses and malls. These robots can detect suspicious activities and alert authorities in case of security incidents.
On February 4th, Knightscope Inc. (NASDAQ:KSCP) announced it received full Authority to Operate (ATO) through the Federal Risk and Authorization Management Program, enabling broader deployments of the company’s autonomous security solutions across federal agencies. The authorization validates the company’s robust security infrastructure and compliance with the government’s rigorous cybersecurity standards.
7. Onity Group Inc. (NYSE:ONIT)
Number of Hedge Fund Holders: 7
Onity Group Inc. (NYSE:ONIT) is a non-bank financial services firm offering mortgage origination and servicing solutions alongside other financial services like insurance claim collection, loan underwriting, escrow account administration, and e-commerce offerings through its subsidiaries, PHH Mortgage and Liberty Reverse Mortgage.
On February 3rd, Onity Group Inc. (NYSE:ONIT) subsidiary PHH Mortgage announced the launch of an AI assistant through its proprietary LoanSpan client reports and analytics platform called the LoanSpan’s AI assistant (LASI) to help clients access data repositories with ease. The AI assistant can swiftly understand and answer unstructured questions accurately and automate query escalation to the company’s Client Relations team for a better and more secure client experience.