President Donald Trump’s new tariff regimes have been introduced under the International Emergency Economic Powers Act. A 10% tariff was imposed on nearly all countries and territories this Saturday, with rates expected to escalate higher and become even more individualized for the “worst” offenders. In a tit-for-tat blow against Trump and his tariffs, China has moved to impose a 34% tax on all US goods.
Investment firm Wedbush has recently criticized these tariffs, citing them as a potential “economic Armageddon” for the U.S. tech sector. Analysts headed by Dan Ives believe that the impact of these tariffs could be even worse than previous major market crashes, such as the dot-com bubble and the 2008 financial crisis. This could wipe out a decade of technological progress in the US.
READ ALSO: Tariff Hits and More: 10 AI Stocks in the Spotlight and 9 Trending AI Stocks Making Headlines Today.
“The concept of taking the U.S. back to the 1980′s ‘manufacturing days’ with these tariffs is a bad science experiment that in the process will cause an economic Armageddon in our view and crush the tech trade, AI Revolution theme and overall industry in the process.”
Another investment firm, Bernstein, notes how China imports $10 billion worth of chips from the United States annually. $8 billion of these are Central Processing Units (CPUs) from Intel, commonly used in laptops and servers. Since China is its largest market in 2024, it will be impacted by the tariffs. Other companies being hit by the tariffs include Micron, considering some of its chips sold in China are imported from the US. This is despite the country having production facilities in China and other countries.
All in all, the firm is persistent that continued tariffs would imply lower growth, lower revenues, and lower profits for companies.
“The higher than expected tariff rates … were not factored into many investors’ or companies’ calculations. The question is will there be enough time for them to actually get those numbers in in time? Because we don’t know what the retaliation measures are going to be from some of the European partners … or even from other countries, in that sort of scenario exact numbers might be lacking in some cases”.
-Chandrasekaran.
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. The hedge fund data is as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A broker trading stocks on a financial trading floor, representing the investment approach of the company.
9. Cloudastructure Inc. (NASDAQ:CSAI)
Number of Hedge Fund Holders: N/A
Cloudastructure, Inc. Class A Common Stock (NASDAQ:CSAI) is a cloud-based video surveillance platform that specializes in artificial intelligence (“AI”) and computer vision analytics. On April 4, the company announced that it has entered into a partnership with one of the nation’s leading real estate investment firms to help expand its commitment to AI-driven security. The AI-security partnership marks an expansion of the current relationship between the two companies, with Cloudastructure’s advanced surveillance and remote guarding solutions being offered to seven multifamily communities and additional rollouts planned for the future.
“This partnership reflects a forward-thinking approach to risk management and asset optimization, both for property owners and their investors. As the multifamily sector continues to evolve, AI-powered security is no longer a luxury—it is a strategic investment that drives operational efficiency, enhances resident satisfaction, and ultimately contributes to long-term portfolio value. We are happy to be expanding our successful relationship with this valued client and look forward to supporting their vision and helping them scale that success across new markets.”
-James McCormick, CEO of Cloudastructure.
8. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 60
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products. On April 7, the company announced the acquisition of Hakkoda Inc., a leading global data and AI consultancy. The acquisition will allow Hakkoda Inc. to expand IBM Consulting’s data transformation services portfolio, helping fuel clients’ AI transformations.
“IBM is at the leading edge of the consulting industry with how we’re supercharging our consultants with AI. With Hakkoda’s data expertise, deep technology partnerships and asset-centric delivery model, IBM will be even better positioned to deliver value faster to clients as they transform with AI.”
-Mohamad Ali, Senior Vice President and Head of IBM Consulting.
7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 126
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On April 8, Wedbush reiterated the stock as “Outperform” and lowered its price target on the stock to $315 per share from $550.
“Tesla is less exposed to tariffs than other US automakers such as GM, Ford, and Stellantis as well as foreign autos … although Tesla still derives a considerable amount of its parts/batteries from sources outside the US including China.”
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. On Monday, April 8, Wedbush reiterated the stock as “Outperform” and lowered its price target to $250 per share from $325.
“At the current situation we do not expect most tech companies to give any guidance on the 1Q conference calls over the next month including Apple given too much uncertainty.”
Even though there is massive uncertainty when it comes to stocks such as Apple, Ives asserted that it is still one of the top names to own in the market.
“Today will be a scary day for investors (and us) … it will create opportunities and way oversold tech stocks but we need to essentially toss out the next few quarters and start to work with some new normal financial model for 2026 for valuations as this tariff situation settles into place during negotiations,” Ives said.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. One of the most notable analyst calls on Monday, April 8, was for Nvidia Corporation. Bernstein reiterated the stock as “Outperform,” stating that its shares are compelling.
“We are not sure where NVDA (or anything else) will bottom in the near term. But we do believe the AI narrative is still real. And once things do settle down (hopefully soon!) the stock at these levels is probably worth a look. We rate NVDA Outperform.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On April 8, BofA analyst Justin Post kept a “Buy” rating on the stock with a $225 price target. The analyst noted how Google will host its Cloud Next conference from April 9-11, viewing the opening note from CEO Thomas Kurian to be one of the “top events for updates on Google’s cloud and AI strategy”. According to the firm, the event has the potential to “boost AI sentiment on the stock”.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On April 8, Jefferies reiterated the stock as “Buy” and lowered its price target on Meta to $600 per share from $725. Despite the lowered price target, the firm said it is sticking with the stock.
“We cut our current fiscal year ests. for top-line and bottom-line by 1% and 2% respectively across our covered Software and Internet companies. Companies with the biggest est cuts are those that are more exposed to macro pressures like META, GOOGL, SONO, and UPWK.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On April 8, Jefferies reiterated Microsoft as “Buy” and lowered its price target on the stock to $475 per share from $500. Despite lowering its price target, the firm said it is sticking with the stock.
“We cut our current fiscal year ests. for top-line and bottom-line by 1% and 2% respectively across our covered Software and Internet companies. Companies with the biggest est cuts are those that are more exposed to macro pressures. Companies who we view as more insulated are MSFT, INTU, ROP, and WDAY.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
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. On April 4, TD Cowen analyst John Blackledge lowered the price target on the stock to $240.00 (from $265.00) and maintained a “Buy” rating. Blackledge cited macro concerns and weak consumer sentiment behind the decreased target. However, he still believes that the stock’s valuation is “appealing at current levels.” He further stated that he believes that Amazon will report strong Q1 2025 results, with a large part of this growth coming from AWS, its cloud business. AWS is expected to grow 17%.
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