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..
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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.
10. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) builds and deploys software platforms for the intelligence community to assist in counterterrorism investigations and operations. The company has been in the news recently after it posted impressive growth in commercial business during the latest earnings report, driven by AI integration into existing products. The stock was initiated at Market Perform by Northland Capital this week, as the advisory termed the Denver-based big data firm a leader in the enterprise artificial intelligence market. Northland Capital analyst Michael Latimore has a Market Perform rating on the shares with a price target of $35, indicating upside potential just shy of two figures.
In a recent investor note on Palantir Technologies Inc. (NYSE:PLTR), the analyst noted that GenAI had lit a fire under companies to employ AI, but initial work had been fragmented and experimental. The analyst further added that the AI operating system of Palantir, powered by their Ontology software, overcomes myriad roadblocks to adoption and is igniting AI use across the enterprise landscape. Latimore claimed that the AI tools of Palantir did not just automate insight creation, but also decisions, and were the next wave of AI.
9. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. The firm, earlier this week, unveiled several tools related to the recent VMware acquisition as part of a larger effort to boost growth in the booming artificial intelligence market. The new tools would increase the exposure of the chipmaker to the edge computing market, which is expected to be worth $232 billion this year. Marker experts predict that the edge AI market will have an increased focus on software-defined products and services to boost both AI and non-AI workloads in the coming months.
Sanjay Uppal, an executive at Broadcom Inc. (NASDAQ:AVGO), commented during the launch of the new AI tools, highlighting that they would uniquely offer enterprises a good, better, best approach to connectivity at the edge by allowing them to tweak real-time WAN performance, gain insights from the network, and program the network. He added that this convergence of the underlay network enabled enterprises to build networks in minutes to support workloads.
8. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Constellation Energy Corporation (NASDAQ:CEG) generates and sells electricity in the United States. The increase in demand for power due to AI data center build has put a spotlight on energy firms. Morgan Stanley predicted earlier this week that increasing prices of electricity would benefit companies like CEG in the coming months. The investment bank predicts that capacity prices for most of the PJM coverage area could hit a $695/MW-day price cap, more than double the record-high $270/MW-day reached in the PJM July capacity auction and driven by tight power supplies.
Constellation Energy Corporation (NASDAQ:CEG) stands to benefit from these developments. Morgan Stanley has forecast that the potential jump in capacity prices for the 2026-27 delivery year auction set for December would push energy bills higher, and when combined with the previous capacity auction, the next auction could increase residential electricity bills by around 20%, according to market experts at the bank.
7. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 47
Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high performance server and storage solutions based on modular and open architecture. The stock has crashed since the company announced earlier this week that it would not be able to complete the annual 10K filing with authorities in the US. The filing details important business numbers for the fiscal year. The news came on the heels of a report by Hindenburg Research, an investment firm with a focus on activist short selling, that detailed that it had taken a short position on the chip firm because of glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.
Super Micro Computer, Inc. (NASDAQ:SMCI) has sought to ease investor concerns regarding accounting irregularities in a recent statement. In the press release, the management said that it did not expect any material changes to the numbers for the 2024 fiscal year despite not being able to file the report on time. Wall Street analysts have also turned bearish on the company following the delay in the 10K filing.
6. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. It has invested heavily in AI as it seeks to keep pace with new developments in the tech business. As part of these investments, the firm contributed $10 billion to a funding round for OpenAI, the California-based firm that launched the AI wave with the release of ChatGPT in late 2022. The startup is rumored to be valued at above $100 billion if the latest funding round, led by Microsoft, Apple, and NVIDIA, is successful. At the startup, developers are reportedly working on a next-level artificial intelligence product, dubbed Strawberry, which is capable of solving advanced problems and tasks.
Microsoft Corporation (NASDAQ:MSFT) hopes for the launch of the new product before the end of this year. Reports indicate that Strawberry is capable of solving math problems it has never encountered, something current AI models, such as ChatGPT, are incapable of – firmly putting the former in the generative AI basket. The product is also capable of performing high-level tasks, such as developing marketing strategies and solving complex word puzzles.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 165
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. Recent reports suggest that the company will soon roll out the people-generating feature of its AI assistant, Gemini. This feature was temporarily paused earlier this year due to concerns about racial handling. The update is significant as it will introduce a capability not yet offered by Google’s competitors, available to users subscribed to paid Gemini plans, including Gemini Advanced, Business, or Enterprise. Google has also updated the image-generating model within Gemini for this launch.
In another notable development, Reuters recently reported that Alphabet Inc. (NASDAQ:GOOG) is planning to construct a large data center in Vietnam. Data centers are critical to the ongoing AI revolution in the tech industry. To date, no hyper-scaler has announced plans to build a data center outside the US. According to Reuters, internal discussions are underway, and the facility could be operational by 2027.
4. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. A few weeks after announcing that spending on AI and related technologies would increase in the coming months, the company has now disclosed plans to close its augmented reality (AR) studio to redirect investments elsewhere. In a recent statement, the firm explained that this move is part of a broader strategy to allocate resources toward the next generation of experiences, focusing on emerging form factors like smart glasses.
Earlier this week, Meta Platforms, Inc. (NASDAQ:META) revealed that it had entered into an agreement with Sage Geosystems to procure geothermal energy for its AI data centers in the US. The first phase of this project is expected to be operational by 2027. Meta has committed to investing in sustainable energy sources as power demand surges across the country, having already secured over 12,000 MW in renewable energy projects in recent years.
3. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. Recent reports indicate that Amazon will use Anthropic’s AI model, developed by a California-based startup, to power the latest updates to its virtual assistant, Alexa. This decision hints at shortcomings in Amazon’s in-house AI models, with some sources telling Reuters that these internal models suffer from lag times of six to seven seconds and issues with consistency and accuracy. The tech giant plans to charge $5 or $10 per month for Alexa’s advanced AI features.
Amazon.com, Inc. (NASDAQ:AMZN) is also in the news after recent reports in the media claimed that Chinese companies are bypassing US export bans on AI-related products, software, and technology by leveraging American cloud service providers. These providers, including Amazon’s AWS, have integrated AI features into their platforms over the past few months to meet the rapidly growing demand for advanced technology. A report initially published by Reuters alleges that Amazon has granted Chinese entities access to high-end AI chips and advanced models such as Claude.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. Citi investment bank recently named the company as the top artificial intelligence stock pick heading into 2025. In a note to investors, the bank’s AI analysts pointed out that early developer feedback on iOS 18 — the latest iPhone software featuring beta AI capabilities — has been positive. Notably, the newly launched AI-powered feature that removes unwanted objects has received favorable reviews. According to the analysts, these innovations give consumers a strong incentive to upgrade their iPhones. The investor note also addressed concerns about the transition to a new CFO and the ongoing antitrust case against Google, expressing confidence that the company will emerge stronger from these challenges.
Apple Inc. (NASDAQ:AAPL) is potentially participating in a funding round for OpenAI, the California-based AI startup that is estimated to be worth around $100 billion, later this year. Experts are divided on the reasons behind the tech giant’s possible investment in OpenAI. According to an analysis by Bank of America, a deeper Apple-OpenAI partnership could be in the works if Apple makes a substantial investment, potentially positioning itself as a rival to Google in the internet search arena.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. The company recently reported its second-quarter 2024 earnings, surpassing market expectations with earnings per share beating estimates by $0.04 and revenue exceeding forecasts by $1.3 billion. Additionally, the guidance for the third fiscal quarter also came in above expectations. During the earnings call, concerns about the production ramp-up of Blackwell, the company’s latest AI chips, were addressed. The CFO disclosed that customer samples of the Blackwell architecture were shipped in the second quarter, with full-scale production scheduled to start in the fourth quarter and continue through fiscal 2026.
NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang, in an appearance on news platform CNBC after the earnings call, said that the company expected to earn billions of dollars in revenue from volume production of Blackwell chips in the fourth quarter and ramp up from there. Huang also underlined that hyperscalers only represented 45% of the total data center revenue of his company, emphasizing that NVIDIA was well diversified in this area, with customers ranging from internet service providers, sovereign AI firms, to industries and enterprises.
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) 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 NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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