Last month, DeepSeek wreaked havoc in the tech world by launching its popular chatbot and artificial intelligence model. While the advancements haven’t been exactly ahead of its Western competition, what spooked investors worldwide is its claims that its model took only $5.6 million in training costs using less advanced, and fewer, computer chips than those employed by tech giants.
These claims have led to concerns about the economics of AI development and competition for big tech players. There have also been suspicions regarding data distillation from Western models, disrupting AI leadership in the Western world.
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Another impact DeepSeek’s emergence has had on the AI world is that it has highlighted several new risks and even challenged market assumptions about how AI will develop.
“The DeepSeek saga is a fascinating inflection point in AI’s trajectory, raising ESG questions that extend beyond energy and market concentration”.
-Peter Huang, co-founder of Openware AI.
“Smaller companies and developers who couldn’t compete before can now get in the game …. It’s like we’re seeing a democratisation of AI development. And the efficiency gains are significant as they’re achieving similar results with much less computing power, which has huge implications for both costs and environmental impact.”
– Camden Woollven, group head of AI product marketing at IT governance and compliance group GRC International.
While all this may be true, one South Korean spy agency has accused the Chinese AI app DeepSeek of “excessively” collecting personal data. Not only does it collect data, but also uses all input data to train itself. According to The National Intelligence Service (NIS), an official notice was sent to government agencies last week advising them to take security precautions over the artificial intelligence app.
“Unlike other generative AI services, it has been confirmed that chat records are transferable as it includes a function to collect keyboard input patterns that can identify individuals and communicate with Chinese companies’ servers such as volceapplog.com”.
-NIS said in a statement issued on Sunday.
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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9. Blaize Holdings, Inc. (NASDAQ:BZAI)
Number of Hedge Fund Holders: N/A
Blaize Holdings, Inc. (NASDAQ:BZAI) provides AI-enabled edge computing solutions. On February 10, the company released financial guidance and new product pipeline details that demonstrate growing momentum for the business amid demand for edge AI in the enterprise across numerous verticals. The company projects a revenue of $19 million to $50 million for fiscal year 2025 and a revenue of $105 million to $140 million for fiscal year 2026, as solutions start to get deployed. It has also managed to grow a robust customer base owing to its innovative product pipeline built on full-stack programmable processor architecture suite and software platform for AI processing. The company’s AI-powered edge technology will enable low-latency and cost-efficient AI processing, which will in turn support real-time decision-making in defense systems, smart city management, and automotive applications.
“Blaize is well positioned to capitalize on the accelerating demand for edge AI. Our value proposition and solutions roadmap efficiently addresses the high-performance compute demands for defense, smart city, and automotive customers, which has resulted in a growing customer pipeline.”
“When it comes to edge AI, it’s not a matter of if, but when. The energy efficiency, lower cost, and low latency benefits of edge AI technology are remarkable and bring tremendous benefits across society. We’re excited to work with partners across multiple industries to bring these benefits to people’s everyday lives.”
-Dinakar Munagala, CEO of Blaize.
8. Lichen China Limited (NASDAQ:LICN)
Number of Hedge Fund Holders: 1
Lichen China Limited (NASDAQ:LICN) is a Chinese leading provider of financial and taxation solution services, education support services, and software and maintenance services. On February 10, the company announced that it had completed its acquisition of the remaining 40% equity interest in Bondly Enterprises Limited (“Bondly”). Bondly is a domestic consulting firm specializing in business process management and informationization. Lichen China initially purchased 60% equity in Bondly back in 2024, and with the acquisition of the remaining equity interest by Lichen, Bondly is now a wholly-owned subsidiary of Lichen China. The move will allow Lichen China to fully integrate Bondly’s advanced technologies and AI capabilities into its operations, strengthening its foothold in the AI and technology sectors. Bondly features a proprietary AWS BPM system that allows seamless integration across applications, departments, and business environments. Its expertise in AI development and strong client base will help Lichen China expand into the AI sector.
“The acquisition of the remaining 40% equity in Bondly is a strategic move that allows us to fully leverage Bondly’s technological expertise and AI capabilities. This transaction not only strengthens our control over Bondly’s operations but also positions us to accelerate the development of our AI-driven solutions, particularly our flagship product, the Lichen AI Robot. We believe that Bondly’s core technologies and talented team will play a pivotal role in our future growth and innovation.”
– Mr. Ya Li, Chairman and CEO of Lichen China, commented on the acquisition.
7. monday.com Ltd. (NASDAQ:MNDY)
Number of Hedge Fund Holders: 49
monday.com Ltd. (NASDAQ:MNDY) develops software applications globally, offering a cloud-based Work OS for creating work management tools. On February 10, the company announced its AI Vision for 2025, focusing on three strategic pillars—AI Blocks, Product Power-ups, and the Digital Workforce. AI Blocks are customizable AI actions that will allow users to automate workflows regardless of technical expertise, Product Power-ups will be the AI capabilities that enhance tools like CRM, and Digital Workforce will introduce a scalable, AI-powered team of agents to work around the clock. The company’s AI vision aims to democratize the power of software, integrating artificial intelligence into the company’s software to help businesses scale efficiently. Through Monday.com’s offering, anyone regardless of their technical background will be able to build AI as the technology will be integrated into their workflows. The company intends to launch its first AI agent, monday Expert, in March.
“People adopt products, not technology, and that’s where monday.com comes in. By embedding intelligence into the products our customers already know, use, and love, AI will accelerate our mission to democratize the power of software. “monday.com’s AI Vision is not just about adding new features; it’s about reimagining how work gets done, unlocking infinite possibilities, and empowering businesses to scale like never before. With a majority of our customers in non-tech industries, they’re looking to us to lead them through the AI transformation. Our productization of AI ensures that intelligence serves our customers and not the other way around.”
-Daniel Lereya, Chief Product and Technology Officer at monday.com.
6. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
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 February 10th, Needham maintained a “Hold” rating on the stock. The firm stated that upon reviewing the firm’s model, it has been revealed that the company’s longer-dated growth levers around FSD, Robotaxi, and Robotics look “more priced in than not”. Even though autonomous ridesharing is gaining momentum, the firm still considers Tesla stock to be overpriced. It also stated that the company is behind in autonomous rideshare and the Robotics business is still in its early stages.
“We still see an expensive stock, with TSLA needing to trade at 50x our new ’32 estimates discounted back to drive ~30% upside from current prices, despite TSLA operating from a trailing position in autonomous rideshare and the early stage nature of the Robotics business”.
-Analysts led by Chris Pierce said in a note
Overall, TSLA stock sports a consensus Hold rating on Wall Street. The average price target of $336 implies a 4% downside from current levels.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops semiconductors, providing processors and graphics technologies for gaming, data centers, and AI-driven high-performance computing. On February 10, Wells Fargo analyst Aaron Rakers reiterated a “Buy” rating on the stock with an associated price target of $140.00. Of the many factors pinpointing AMD’s strategic positioning and growth prospects, Rakers has highlighted AMD’s focus on expanding its data center GPU offerings, especially with the upcoming rise of the CDNA 4-based MI350X into mid-2025. This ramp is expected to enhance AI training capabilities significantly and also act as part of a broader portfolio strategy that will help AMD grab a meaningful share in the data center market over time. Another key growth driver for AMD is its momentum in the server CPU market, led by strong enterprise demand and recovery in the cloud sector. Additionally, AMD has the potential to grow its market share, especially in hyperscale cloud applications. Rakers also views an attractive risk-reward profile for AMD due to its strong positioning and strategic initiatives in the data center and server markets.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On February 10, Argus analyst Jim Kelleher kept a “Buy” rating and a $175 price target on the stock. According to the firm, the stock has been more “wobbly” since investors became aware of DeepSeek and the less costly large language models it claims to have produced. However, the analyst told investors in a research note that Nvidia’s first-mover status has gained it a significant competitive advantage and allowed it to become a provider to all the major AI and cloud service providers. The analyst further noted that Nvidia’s multi-generation lead in GPU compute technology and its other software and hardware products offer a matchless comprehensive solution. Beyond data centers, Nvidia can also grow in avenues such as gaming, professional visualization, and automotive.
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On February 10, analyst Justin Post from Bank of America Securities maintained a “Buy” rating on the stock and a $225.00 price target. According to the firm, the AI search landscape has had several new entrants in the market, particularly ChatGPT. Nevertheless, Alphabet’s Google has still maintained a stable global search share, with only a slight year-over-year decline. Traffic on Google remains strong, and daily web visits show signs of minimal impact from the rising AI competitors. That said, the firm reflects upon the company’s resilience amid competition and also recognizes its potential for AI to enhance Google’s monetization of its search services. Strong growth in search volumes, together with support from AI innovations, has in turn led to a positive outlook for continued revenue growth. Albeit risks such as increased competition and legal challenges, the overall stance on the stock remains positive.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On February 10, Meta began notifying staff of job cuts. These performance-based layoffs will be affecting almost 4,000 Meta workers across the United States, Europe, and Asia. According to Bloomberg, the eliminations come amid the company’s search for new talent that could help it dominate the artificial intelligence race. Chief Executive Officer Mark Zuckerberg told employees that Meta would cut 5% of its workforce, particularly those who “aren’t meeting expectations”. In a separate message to managers, Zuckerberg said that the cuts would help make space for creating space for the company to hire the “strongest talent.” He has also told his investors previously that Meta anticipates spending hundreds of billions of dollars on AI infrastructure.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
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 February 10th, CNBC reported that JPMorgan has reiterated Amazon as a top pick. The firm stated that the company has had “many years of strong growth & improving profit as the industry leader in two very large opportunities, e-commerce and cloud.”
“However, we believe AMZN has a very clear path to AI monetization through AWS, and it remains early in what should be an extended cycle of innovation and technology transformation.”
-JP Morgan
Analysts on Wall Street currently have a consensus Buy rating on AMZN stock. The average price target of $235 implies an upside of 0.8% from current levels, however, the Street-high target of $285 implies an upside of 22%.
While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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