In this article, we discuss the 20 AI news items that broke the internet this week.
Artificial Intelligence (AI) is increasingly becoming indispensable for large businesses, providing them with tools to drive efficiency, innovation, and competitive advantage. As AI technology continues to evolve, the importance it has to large enterprises is underscored by significant investments and impressive returns. For example, the ability of AI to automate and optimize business processes is one of the most significant advantages for large companies. AI-driven automation can streamline supply chain management, optimize logistics, and improve customer service through chatbots and personalized recommendations. According to a report by McKinsey, companies that fully leverage AI could see a 20-25% increase in cash flow.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 10 AI Stocks That Could Go Parabolic.
In financial services, AI is transforming risk management, fraud detection, and customer insights. JPMorgan Chase, for instance, uses AI to review legal documents, a task that used to take thousands of hours of manual work, now accomplished in mere seconds. In the pharmaceutical industry, AI is accelerating drug discovery processes. For instance, companies like Pfizer have used AI to analyze vast datasets to identify potential drug candidates much faster than traditional methods. This not only speeds up the time-to-market for new drugs but also significantly reduces research and development costs, which are estimated to average around $2.6 billion per drug.
Moreover, AI is enabling companies to offer more personalized experiences to customers. Retail giants like Amazon and Walmart use AI algorithms to analyze customer behavior and preferences, tailoring recommendations that enhance the shopping experience and increase sales. Amazon’s recommendation engine, powered by AI, is responsible for 35% of the company’s total sales. NVIDIA, a leader in AI hardware, exemplifies how AI can drive business success. In the second quarter of fiscal 2025, the company reported $30 billion in revenue, with AI contributing significantly to this figure. The company’s GPUs are the backbone of AI models used across industries, from autonomous vehicles to large-scale data analysis, demonstrating the critical role AI plays in both revenue generation and technological advancement.
Read more about these developments by accessing Billionaire Stan Druckenmiller Is Betting On AI Infrastructure, Tobacco and Industrial Stocks and 10 Tech Stocks to Monitor Amid Market Volatility According to Bernstein Analyst..
Our Methodology
For this article, we selected AI stocks that have been in the news this week. 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).
A technician observing a complex fiber-optic networking set-up in a laboratory.
AI News That Broke The Internet This Week
20. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 74
Marvell Technology, Inc. (NASDAQ:MRVL) makes and sells semiconductors. The firm released second quarter earnings this week, beating market estimates on earnings per share and revenue by $0.01 and $20 million respectively. AI data center demand helped the chipmaker post these numbers, as customers like NVIDIA, Amazon, and Google integrated the products marketed by Marvell into their AI offerings. For example, the Blackwell GPUs of NVIDIA use the 1.6T optical DSP made by Marvell. Similarly, the AI ASICS made by Marvell is being used by Amazon in the Trainium 2 AI processor it is building, while Google is also using Marvell products in the Axion CPU processor.
The explosive growth in data center build can be gauged from the fact that Marvell Technology, Inc. (NASDAQ:MRVL) witnessed a 92% year-over-year surge in data center product sales in the second quarter this year. Multiple other growth drivers are likely to rally the shares further in the coming months, including 5G infrastructure and cloud compute. JP Morgan analyst Harlan Sur estimates that Marvell is going to ship $575-$600 million in AI ASICs this year, up from prior view of $500 million, and exit the year with a quarterly run-rate of $300 million, up from prior view of $200 million.
19. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. It offers AI-enabled chips for several industries, including data center and cloud, personal computers, adaptive and embedded devices, and gaming. Latest reports indicate that the company is purchasing AI infrastructure provider ZT Systems in a deal worth close to $5 billion. Nearly $400 million of this amount is tied to the latter closing some important milestones. The move is part of a larger plan by AMD to expand data center and AI systems capabilities. ZT Systems specializes in designing and optimizing cloud computing solutions that will help cloud and enterprise customers accelerate the deployment of AMD-powered AI infrastructure at scale.
Advanced Micro Devices, Inc. (NASDAQ:AMD) CEO Lisa Su commended on the purchase recently, noting that combining the high-performance Instinct AI accelerator, EPYC CPU, and networking product portfolios of AMD with the industry-leading data center systems expertise of ZT Systems would enable AMD to deliver end-to-end data center AI infrastructure at scale within the ecosystem of OEM and ODM partners.
18. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 88
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. The firm posted second quarter results this week, beating market expectations on earnings per share and revenue by $0.18 and $910 million respectively. The market had been eagerly waiting for the results of the infrastructure solutions division of the firm, which supplies products to AI data center customers. These results did not disappoint. The infra solutions group delivered $11.6 billion in revenue for the quarter, up 38% year-over-year. This included an 80% rise in servers and networking revenue at $7.6 billion, well above the $5.9 billion estimate.
Dell Technologies Inc. (NYSE:DELL) shares rallied following the result and analysts on Wall Street upgraded their price targets on the stock. Evercore ISI analyst Amit Daryanani noted that given the plethora of worries around the ISG and AI margins, the performance of the firm was fairly impressive and would help allay investor fears around margin issues. The analyst has an Outperform rating on the shares with a price target of $140.
17. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. Reports this week have indicated that the chipmaker is considering to spin off the foundry business as part of a larger plan to turn around the business amid mounting losses. Intel has three times as many employees as other AI chip giants and is still yet to develop a chip that can compete with NVIDIA in the AI world. Even recent layoffs and a shakeup of the product portfolio have failed to ease investor concerns around the stock. Intel is looking at options by seeking advice from investment banks like Morgan Stanley and Goldman Sachs.
However, Intel Corporation (NASDAQ:INTC) stock has gained marginally following the reports that it may spin off the foundry business. TF International Securities analyst Ming-Chi Kuo had commented on these developments earlier this week, noting that the recent decision by Lip-Bu Tan to resign from the company’s board, which some said occurred due to his concerns about Intel’s future, may be related to the spin off.
16. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 78
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. The company revealed earlier this week that it had purchased the 4G Internet of Things technologies, including certain employees, assets and licenses, of French firm Sequans Communications. The move is widely seen as a part of the plan by the chipmaker to bolster an Industrial IoT portfolio, offering low-power solutions for reliable and optimized cellular connectivity for IoT applications. Under the terms of the deal. Sequans would retain license of the 4G IoT technology for ongoing use and will continue to serve IoT markets.
Nakul Duggal, a senior executive at QUALCOMM Incorporated (NASDAQ:QCOM), commented on the purchase, noting that the acquisition of 4G IoT technology from Sequans added to the broad portfolio of his company, further strengthening QCOM offerings across enterprise customers of low-power solutions for reliable, optimized cellular connectivity for Industrial IoT applications.
15. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 84
Lam Research Corporation (NASDAQ:LRCX) markets semiconductor processing equipment. The company offers investors a healthy mix of value and growth. Even as it services high growth sectors like AI, the company has a stable and diversified business that has enabled it to build a stellar dividend profile, virtually unheard of in the semi space. The firm has managed to achieve nine consecutive years of dividend growth in a sector where the media in this regard is just a little over one year. It also has nine consistent years of payouts, highlighting the stability of the financials in a volatile macro environment.
Lam Research Corporation (NASDAQ:LRCX) recently declared a quarterly dividend of $2.30 per share, an increase of nearly 15% from the previous dividend of $2. The forward yield was 1.15%. The firm markets wafer fab equipment to leading chipmakers around the world. It is the third largest supplier of this globally. The firm believes that AI use cases expanded, investments for AI-enabled edge devices would play particularly well to the strengths of the firm.
14. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 81
ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. Reports released earlier this week claim that the Dutch authorities, ASML is based in the Netherlands, are considering further limiting the Chinese operations of the chipmaker by not renewing important licenses to repair and provide spare parts for semiconductor equipment in China. These licenses relate to the service of deep ultraviolet lithography (DUV) machines and are due to expire at the end of 2024. These reports amid US government plans to pressure allies in Europe and Asia to limit export of semi equipment to China.
ASML Holding N.V. (NASDAQ: ASML) DUV machines could become inoperable if the licenses are not granted. These DUV machines are important to the chipmaking factories in China as the country has not developed the technology to produce these machines. Some firms that could be impacted as a result of the restrictions include Huawei Technologies. They would also hurt ASML, as half the sales of the chipmaker are made in China.
13. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. Authorities in the EU recently granted approval for a new chip factory in the German city of Dresden. The factory, a joint venture between TSM and a German firm, would cost $5.5 billion. The project aims to serve the demand for automotive and industrial applications on the continent. Once developed, the facility would be the first-of-a-kind in Europe, as currently there is no comparable mass-production plant for the specific technology features offered. The foundry will produce high-performance chips, based on 300mm silicon wafers with 28/22nm and 16/12nm technology nodes.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) will run the foundry and it is estimated to be operating at full capacity by 2029, and is anticipated to produce 480,000 silicon wafers per year. The approval for the plant was granted The EU regulator under the European Chips Act. Announced last year, the €43 billion Chips Act supports local chip making.
12. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. Earlier this week, an electronics company in Taiwan, a hub of global chipmaking, confirmed that it had agreed to sell two factories it owned in the country to Micron in a deal worth $254 million. Previous estimates had put the value of this deal around $620 million. The deal, expected to close before the end of this year, will enable Micron to take over factories in Taichung and Tainan regions of Taiwan. The facilities would be used to expand the integrated circuit packaging and testing services for the company, along with increased production of high bandwidth memory.
As AI data center demand rises, Micron Technology (NASDAQ:MU) has sold out HBM capacity till 2025. These HBMs form an integral part of AI data centers for memory storage and AI computations. Micron revealed in the latest earnings call that demand for AI data center servers was likely to be a key driver of earnings growth of the company in the coming months.
11. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 64
Analog Devices, Inc. (NASDAQ:ADI) designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products. The company posted third quarter results earlier this month, beating market estimates on earnings per share and revenue by $0.07 and $40 million. During the period, bookings for industrial, communications and consumer grew across each vertical for the fourth consecutive quarter, even as automotive-related bookings declined. In communications, wireless and wireless both saw growth, while the consumer section witnessed notable strength in portable devices and gaming.
Analog Devices, Inc. (NASDAQ:ADI) also revealed guidance numbers for the coming quarter. The company expects revenue of $2.3 billion to $2.5 billion, with a mid-point above the consensus estimate of $2.38 billion. It expects fourth quarter adjusted earnings per share ranging from $1.53 to $1.73, with a mid-point in-line with the estimate of $1.63.