CNBC recently spoke to companies worldwide on how DeepSeek’s new AI models will likely impact their operations and financials. Roadzen, a technology company using artificial intelligence to disrupt the auto insurance sector, was asked how things are now different with DeepSeek releasing its R1 model.
According to its chief executive Rohan Malhotra, his company helps its insurance underwriting clients speed up claim processing, cutting the time to resolve 80% of minor accident claims from six weeks to two minutes. Since the nature of processing such claims is sensitive, the company has been using sophisticated AI models that produce accurate results, such as those from OpenAI, Meta, and Anthropic. However, things may be different now that DeepSeek is in the picture.
“Our clients cannot afford a model which has 60%-70% accuracy, that’s like a major economic issue. We need to deploy models that have 95%-99% accuracy.”
-Chief executive Rohan Malhotra
Rough calculations reveal that the company may be able to incur costs 50% lower using DeepSeek than the costs incurred with OpenAI’s models.
“What we really care about is the cost of inference. We care about the accuracy of the outputs. And we care about whether this model is performing to the certain benchmarks that we’ve set, in a good way”.
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Besides cost efficiencies, other companies have lauded the decision to keep the technology open source, stating that it makes it more attractive compared to existing open-source models like Meta Platforms’ Llama. Another company excited with the advent of DeepSeek is a North Carolina-based eldercare platform CareYaya. Neal K. Shah, CEO, told CNBC that their company has started using AI to help customers fight health insurance claims denials.
“DeepSeek just lowered our costs by 90% so we can help more people,” he said in a message. “The average cost to appeal a U.S. health insurance claims denial is $43.84. We had used OpenAI and Anthropic to get the cost down to 12 cents — now we’re doing it with DeepSeek on the back end, the cost per appeal is 2 cents.”
The above findings suggest how DeepSeek may democratize artificial intelligence. However, its models are also raising concerns regarding data privacy, security, and potential for misuse. That said, while the impact DeepSeek’s models have made is undeniable, it is a wait-and-watch moment to see whether it reshapes the AI world for the better or for worse.
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.
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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9. BigBear.ai Holdings, Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 7
BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions. On Wednesday, February 5th, Cantor Fitzgerald significantly increased the price target on the stock to $8.00 from $3.50 and maintained an “Overweight” rating. BigBear.ai soared after securing a major Department of Defense (DoD) contract. The DoD’s Chief Digital and Artificial Intelligence Office (CDAO) said they will advance BigBear.ai’s Virtual Anticipation Network (VANE) prototype to full use. Analysts at Cantor Fitzgerald are impressed by this contract win, along with other contracts and some recent board changes, which led them to up their price target. They have also revised their targets for BigBear.ai’s revenues for both the Fiscal fourth quarter of 2024 and full-year 2025 top-line estimates.
8. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 25
Strategy, formerly known as MicroStrategy Incorporated (NASDAQ:MSTR), offers AI-powered enterprise analytics software and services. It is the largest corporate holder of Bitcoin and the world’s first Bitcoin Treasury Company. On February 6th, Maxim raised the firm’s price target on the stock to $500 from $480 and kept a “Buy” rating on the shares. The rating has been issued following the company’s rebranding to the name “Strategy”. According to the company, the name change reflects Bitcoin and AI as the two transformative technologies of the industry. The firm expects Strategy to keep buying Bitcoin through market activities. Recently, it raised $584 million in a convertible preferred stock offering, which should begin trading on February 6. The price target raise reflects the estimated value of Strategy’s bitcoin holdings over the next 12 months plus the value of the core software business.
7. Booz Allen Hamilton Holding Corporation (NYSE:BAH)
Number of Hedge Fund Holders: 32
Booz Allen Hamilton Holding Corporation (NYSE:BAH) is a military-defense-focused AI stock and the leading provider of artificial intelligence (AI) services to the US government. On February 4th, Bank of America reiterated its “Buy” rating on the stock with a price target of $210. Perez Mora’s buy rating stems from Booz Allen’s strategic positioning and potential for growth. Its critical role in advancing technologies such as cyber and artificial intelligence helps meet the complex requirements of government missions. In addition, investments in key areas such as cyber warfighting and automation, together with strategic partnerships with firms like Palantir, Nvidia, and Amazon Web Services, position it as a bridge between commercial tech and evolving government needs. Perez Mora does acknowledge defense spending cuts but deems them overstated. The firm also said that the recent market sell off following the emergence of DeepSeek was a good chance to purchase the stock at a discount. The company is also suitable to advise on technology given its technical expertise and customer relationships, the firm noted.
6. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 47
Fortinet, Inc. (NASDAQ:FTNT) is a cybersecurity company that provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products. On February 6, the company announced the launch of its latest G series of next-generation firewalls (NGFWs), namely the FortiGate 70G, FortiGate 50G, and FortiGate 30G. These firewalls are designed to deliver high-performance security, unmatched power efficiency, advanced networking support, and FortiGuard AI-Powered Security Services. These next-gen firewalls are powered by Fortinet’s proprietary ASIC technology and the unified Fortinet operating system, FortiOS, helping customers reduce the risk of successful cyberattacks, and future-proofing IT infrastructure, reducing operational costs, and environmental impact.
“For nearly 25 years, we have set the standard for fortifying enterprise networks. By completing the FortiGate G series with the latest ASIC and FortiOS innovation, we give distributed enterprises cutting-edge tools like AI-powered security services and GenAI for network and security operations centers without compromising performance or sustainability needs. Our customers trust that Fortinet will continue redefining the standard for next-generation firewalls by delivering superior security effectiveness, greater energy efficiency, and unmatched performance for years to come.”
-Nirav Shah, Senior Vice President, Products and Solutions at Fortinet.
5. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 60
Accenture plc (NYSE:ACN) offers strategy and consulting, industry X, song, and technology and operation services. The company’s artificial intelligence consulting services and industry-specific solutions are high in demand. On February 6th, it was announced that Repsol, a global energy company, will be extending its co-innovation collaboration with Accenture (NYSE:ACN) to expand its Digital Program and boost the use of generative AI (gen AI) across the company. Repsol will be driving its digitalization and AI push through the introduction and deployment of AI agent systems, improving upon the efficiency of processes as they are scaled. The agentification will be powered by components of the Accenture AI Refinery™ platform and the NVIDIA AI platform, including NVIDIA accelerated computing and NVIDIA AI Enterprise software. These agents will be helping streamline and reinvent processes so that they boost productivity and allow workers to work efficiently. Repsol will also expand employees’ training plans to facilitate their learning and training in the new technologies.
“We are honored to extend our deep partnership with Repsol, a bold leader and early mover in the energy industry in embracing new technologies and ways of working. We are excited to help Repsol achieve a new level of performance by working together to create tailored AI agents with the Accenture AI Refinery™ and the NVIDIA AI platform. Accelerating the use of agentic AI will enhance efficiency and productivity at speed, better serve customers with personalized experiences, and ultimately help Repsol gain competitive advantage.”
-Julie Sweet, chair and CEO, Accenture.
4. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 61
Cisco Systems, Inc. (NASDAQ:CSCO) is an American technology company that provides information technology and networking services. On February 5th, Booz Allen Hamilton, a military-defense-focused AI company, announced that Cisco Systems, Inc. (NASDAQ:CSCO) has completed the acquisition of Snap Attack. The acquisition itself was completed on January 31, 2025, while the announcement from Booz Allen came today. Snap Attack is the cyber threat hunting and detection company created by Booz Allen DarkLabs, an elite team of cyber operators and defenders, to help clients stay proactive in the face of threats and fix gaps in cybersecurity. The company spun out of Booz Allen in 2021. SnapAttack will now be providing critical threat detection and engineering (TD/E) technology, intellectual property, and expertise to help Cisco’s Splunk improve its threat detection and engineering roadmap. Splunk is an AI-powered system for managing and analyzing network data, another firm that was acquired by Cisco to strengthen its AI-powered security and observability solutions. Snap Attack will also help Cisco customers switch to Splunk Enterprise Security from other platforms smoothly, Cisco has informed. Its TD/E management lifecycle solution enables security analysts to assess, organize, and optimize their security content, streamline research, writing, and validation and deployment of threat detections across their technology estate.
“We spun out SnapAttack because we believe in the power of dual-use technology to speed outcomes. When great products scale in the commercial market, their benefit expands across our government missions as well. This is an excellent outcome for all involved and we look forward to continuing to work with the SnapAttack team.”
-Booz Allen Chief Financial Officer Matt Calderone.
3. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets. On February 6th, Blayne Curtis from Jefferies reiterated a “Buy” rating on the stock, as reported by TipRanks. Shares of the stock surged 4.3% on Wednesday and gained another 1.5% on Thursday’s pre-market trading session. The uptrend can be attributed to news from one of its major clients, Alphabet. Alphabet recently announced that it is planning to invest up to $75 billion in 2025 to expand its artificial intelligence infrastructure. Broadcom, being a key supplier of custom AI application-specific integrated chips (ASICs) to Google, will stand to benefit from the substantial investments. This is because Alphabet’s increased capex will increase the demand for Broadcom’s semiconductor solutions.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that has recently launched Apple Intelligence, its personal intelligence system. On February 6th, multiple sources including Benzinga and Korean publication ET News reported that Apple’s AI-focused M5 chip is now being produced at scale. These chips are utilizing new process technology to boost AI performance. In comparison to earlier M-series chips, this new chip is likely going to have a redesigned structure and will deliver enhanced AI performance. The new chips will also be running at lower temperatures. This will enable it to maintain full power for longer durations before thermal throttling takes effect. The M5 chips will be powering the upcoming MacBook Pro, iPad Pro, and Vision Pro Devices.
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 6th, Bank of America analysts weighed in on the stock before its fourth-quarter results on the same day after markets close. The firm deems Amazon as a “top pick”. It kept a $255 price target and a “Buy” rating on the shares. According to analysts, the tech giant is all likely to demonstrate strong results.
“We think Amazon had a solid 4Q with fulfilment/headcount leverage. 4Q Retail data was constructive for revenues, and for cloud, we think AWS can meet expectations for 19-20% growth on a growing AI contribution.”
-Bank of America’s Justin Post
“We think cloud demand likely remained robust in 4Q, and anticipate strong AI demand to continue into 2025 (potentially contributing 8pts to growth in ’25)”.
Post has highlighted several key growth drivers, which include Amazon’s expanding partnership with Anthropic, new competitive AI products such as the Nova models, reduced infrastructure costs driven by Trainium, and increasing GPU availability. Post said that AI scaling and AWS margins will also be scrutinized. Post is calling for Q1 revenue of $155.25 billion at the midpoint. Meanwhile, the Street’s forecast is $3.3 billion (2.1%).
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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