In this article, we discuss the 30 most important AI stocks according to BlackRock.
In the third quarter of 2024, investment titan Blackrock released a commentary on the market outlook for artificial intelligence heading into the closing months of the year, stressing that investors were becoming cautious about the scale of AI spending by tech firms and thus diversifying investments into energy, utilities, real estate, and resources tied to AI infrastructure (for more on this click on 30 Most Important AI Stocks According to BlackRock). Following this warning, in September 2024, BlackRock, in collaboration with Microsoft, Global Infrastructure Partners, and MGX, announced a new AI partnership aimed at investing in data centers and supporting power infrastructure. This initiative was part of a larger strategy by the investment firm to enhance American competitiveness in AI while meeting the growing need for energy infrastructure to power economic growth.
The investment giant also expanded product offerings to cater to the growing interest in AI. In October 2024, the firm launched two new exchange-traded funds (ETFs) designed to provide investors with exposure to the burgeoning AI market. These ETFs aimed to capitalize on the increasing demand for AI-driven investment opportunities. Though still in their early stages, the initiatives appear to have paid off. BlackRock reported a net profit of $6.37 billion last year, marking a 16% increase from the previous year. Revenues rose by 14% to $20.4 billion, and assets under management expanded to $11.55 trillion. The firm has attributed a major part of this growth to advancements in AI technologies and projected that AI will be a significant driver of US equities and economic expansion in 2025.
The BlackRock Investment Institute notes that AI innovations are expected to outpace similar developments in Europe, with private markets playing a crucial role in funding AI-related infrastructure. BlackRock’s 2025 Global Outlook suggests that the global economy has moved beyond the traditional boom and bust cycle due to transformative mega forces such as AI technologies, net-zero carbon emission efforts, geopolitical fragmentation, demographic shifts, and the digitization of finance. The firm believes that significant investments, akin to those of the Industrial Revolution, are needed, particularly in infrastructure tied to AI and green technology. The claims made by BlackRock in relation to AI are shared by investment firm JPMorgan.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
According to a recent report on the topic by investment bank JPMorgan, investors should focus on opportunities that will prevail right along the AI value chain instead of focusing on obvious choices. Analysts at the bank have advised investors to weigh future potential earnings against what is already embedded in the price. Per JPMorgan, cheaper valuations and less demanding earnings expectations outside of mega cap tech stocks suggest that even AI bulls should be positioned for further broadening across sectors in 2025. The Investment Outlook 2025 report by JPMorgan takes a look at the soaring valuations of the Magnificent Seven group of stocks and their importance to the AI revolution. The bank highlights that while each of the companies in the Magnificent Seven are geared differently to the AI theme, this group of stocks now make up nearly 35% of the S&P 500 market cap and have driven over 70% of returns since the beginning of 2023.
This performance, compared against the rest of the market, has allowed for the expansion of valuations. JPMorgan underlines that while the rest of the S&P 500 trades on 12-month forward earnings multiple of 19x, the largest 10 stocks in the index now trade on 29x. Analysts led by Karen Ward, the Chief Market Strategist for EMEA at JPMorgan, contend that the valuation discrepancy between tech and the rest is unsustainable. The report stresses that if the broad AI ecosystem generates sufficient revenues to justify the earnings expectations already assumed for a handful of companies, the rest should catch up over time. It also cautions that if instead, the broader corporate universe does not see the clear use case of these technologies and is unwilling to pay for them, then a catch down scenario is more likely. However, when the strong fundamentals of these mega caps are compared to other parts of the S&P 500 today, as well as to the 2000s tech bubble, a catch down seems unlikely, it notes.
JPMorgan broke down the AI revolution into five key areas. These were identified as AI hardware, AI hyperscalers, AI developers, AI integrators, and AI essentials. JPMorgan has warned that there is a substantial gap between the revenue expectations of hardware companies and the revenue growth that can be generated by the AI ecosystem. The bank has cautioned that this weakness can spread throughout the AI value chain. The report notes that the attention of investors has so far focused on AI hardware and AI hyperscalers, two areas of the AI industry more exposed to the technology and communication services sectors. Per JPMorgan, high levels of valuation dispersion in these categories suggest that opportunities for skilled stock pickers persist, but investors must recognize that any earnings disappointment could lead to substantial volatility.
Read more about these developments by accessing 12 Best Quantum Computing Stocks To Invest In and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we selected AI stocks by consulting an investor note from prominent investment firm BlackRock. 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).
An executive from BlackRock, Inc. in a suit overseeing financial market monitors in an office environment.
Blackrock’s 30 Most Important AI Stocks
30. Lemonade, Inc. (NYSE:LMND)
Number of Hedge Fund Holders: 16
Lemonade, Inc. (NYSE:LMND) provides various insurance products through various channels in the United States, Europe, and the United Kingdom. There are many factors that make this company stand out as a worthwhile investment. Firstly, as illustrated in the report for the third quarter of 2024, the company showed strong growth with a 24% increase in In Force Premium and a notable improvement in loss ratios. The company’s strategic diversification and technology initiatives have contributed to its resilience and operational efficiency. Moreover, AI advancements in the company have led to a 2% rise in operating expenses but an 11% decrease in headcount. Secondly, the company’s AI-driven platform can provide a seamless customer experience by automating all the tasks, reducing the potential for human error. 97% of its policies are sold through bots, and 55% of claims handling is automated, which may attract investors looking to invest in technology-leading companies. Furthermore, the company is planning to increase in-force premiums from $1 billion to $10 billion, underscoring its ambitious growth strategy by advancing the integration of AI in its business model.
29. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)
Number of Hedge Fund Holders: 16
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) operates as a clinical-stage biotechnology company that engages in decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery. There are multiple factors highlighting the potential of this company as a strong investment candidate. Firstly, the report for the third quarter of 2024 showed great results, as the reported total revenue was $26.1 million compared to $10.5 million for the third quarter of 2023. The increase was due to revenue recognized from the partnership with Roche & Genentech and the $30 million acceptance fee for the completion of a neuroscience phenomap. Secondly, the collaboration of two leaders in the AI drug discovery space, Recursion and Exscientia, aims to advance the industrialization of drug discovery that would help them redefine the space by shrinking timelines and costs and identifying and optimizing lead candidates faster than traditional methods. Moreover, the company has launched OpenPhenom-S/16, a publicly available foundation model in Google Cloud’s Vertex AI Model Garden. This will enable Life Science companies to use OpenPhenom-S/16 on Google Cloud when building apps that require microscopy data to assess the effectiveness of drug treatments, analyze cultures, study tissues and ultimately accelerate drug discovery and for other uses, holding great investment potential.
28. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 17
C3.ai, Inc. (NYSE:AI) operates as an enterprise artificial intelligence (AI) software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company’s appeal as an investment is driven by a multitude of contributing factors. Firstly, as per the report of the first quarter results of 2025, total revenue for the quarter was $87.2 million, an increase of 21% compared to $72.4 million one year ago. Also, the subscription revenue for the quarter was $73.5 million, constituting 84% of total revenue, an increase of 20% compared to $61.4 million one year ago. This demonstrates the robust demand for enterprise AI software. Secondly, the company’s collaboration with Latin America’s largest power generation and transmission company, Eletrobras, also holds potential for investment. With C3 AI, Eletrobras can efficiently process and analyze real-time data, surfacing low-latency AI insights to mitigate network disturbances. Moreover, the company continues to collaborate with the US Marine Corps, digitally transforming the branch’s legacy software systems. Backed by the Manpower IT Systems Modernization program, this work with C3 AI supports the USMC’s multi-year roadmap and goals, which include becoming a more agile and technologically advanced force.
27. Iron Mountain Incorporated (NYSE:IRM)
Number of Hedge Fund Holders: 30
Iron Mountain Incorporated (NYSE:IRM) is a real estate investment trust that focuses on storage and information management services. The company’s appeal as an investment is driven by a multitude of contributing factors. Firstly, as per the report of the third quarter of 2024, adjusted EBITDA was $568.1 million, compared with $500 million in the third quarter of 2023, an increase of 13.6%. On a constant currency basis, Adjusted EBITDA increased by 13.9% in the third quarter, compared to the third quarter of 2023, driven by increased revenue in Global RIM, ALM, and data center. Secondly, the company has launched a new Digital Human Resources (HR) solution to revolutionize HR operations. This may be an attractive opportunity for investors as it aims to revolutionize HR departments by providing secure employee file management in a centralized platform so that both physical and digital documentation is complete, up-to-date, and in compliance with employee records requirements. Moreover, Iron Mountain has released its new InSight Digital Experience Platform (DXP), a secure software-as-a-service (SaaS) solution designed to help organizations handle their physical and digital information. These promising AI-integrated initiatives will revolutionize the system and hold the potential to drive substantial growth in this technologically driven world.
26. Jones Lang LaSalle Incorporated (NYSE:JLL)
Number of Hedge Fund Holders: 31
Jones Lang LaSalle Incorporated (NYSE:JLL) operates as a commercial real estate and investment management company. There are multiple factors that make this company stand out as a worthwhile investment. Firstly, as per the reports of the third quarter of 2024, the revenue was $5.9 billion, up 15% in local currency, and resilient revenues grew 16% in local currency, along with transactional revenues up 11% in local currency. In addition, leasing within Markets Advisory increased by 21% with broad-based geographic and asset class growth led by the US office. Secondly, JLL and Slate Asset Management’s joint venture to commercialize Slate’s best-in-class technology platform for commercial real estate professionals resulted in JLL Asset Beacon, a software-as-a-service (SaaS) technology platform that integrates data across asset management functions to create a real-time, end-to-end view of performance. Moreover, the company has launched its artificial intelligence (AI) platform, JLL Falcon, designed to accelerate the digital transformation of the commercial real estate industry. The new platform is a cutting-edge set of AI-enabled software services that combines JLL’s comprehensive proprietary data with generative AI models to deliver timely, revenue-generating and cost-saving insights, as well as maximize returns.
25. R1 RCM Inc. (NASDAQ:RCM)
Number of Hedge Fund Holders: 33
R1 RCM Inc. (NASDAQ:RCM) provides technology-driven solutions that transform the patient experience and financial performance of hospitals, health systems, and medical groups. There are several key aspects that contribute to the appeal of this company as a valuable investment opportunity. Firstly, as per the report of the third quarter of 2024, the Adjusted EBITDA was $148.2 million, compared to the adjusted EBITDA of $161.5 million in the same period last year. In addition, the revenue was $656.8 million, up $84 million or 14.7% compared to the same period last year. This demonstrates that the integration of AI and automation into R1’s platform continues to drive great results and enhance the operational efficiency of the company. Secondly, the company has integrated Intelligent Automation and Deep Data Analytics into healthcare through proprietary RCM optimization engines that turn complex data into financial and operating performance improvements. Moreover, with the company’s efforts to combine R1’s deep revenue cycle data and expertise with Microsoft’s AzureAI, R1 clients will realize the immediate benefits provided to patients and providers.
24. Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders: 36
Robinhood Markets, Inc. (NASDAQ:HOOD) operates as a financial services platform in the United States. The company’s appeal as an investment is driven by a multitude of contributing factors. Firstly, as per the report of the third quarter of 2024, transaction-based revenues increased 72% year-over-year to $319 million, primarily driven by options revenue of $202 million, up 63%, cryptocurrencies revenue of $61 million, up 165%, and equities revenue of $37 million, up 37%. In addition, funded customers increased by 1 million year-over-year to 24.3 million. Secondly, the company acquired Pluto, an AI-powered investment research platform, aiming to enhance Robinhood’s data analytics capabilities. This may attract investors as it holds the ability to personalize investment strategies, give real-time insights, and optimize portfolios. Moreover, the company also began rolling out Robinhood Legend, a powerful, sleek, browser-based desktop trading platform built from the ground up for active traders, and announced plans to launch futures and index options in the coming months with some of the lowest contract fees in the industry.
23. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 44
NXP Semiconductors N.V. (NASDAQ:NXPI) makes and sells various products related to semiconductors. This company stands out as a worthwhile investment due to a combination of favorable factors. Firstly, as per the report of the third quarter of 2024, cash flow from operations was $779 million, with net capex investments of $186 million, resulting in non-GAAP free cash flow of $593 million. NXP continues to execute its capital return policy with the payment of $259 million in cash dividends during the time and the repurchase of $305 million of its common shares. Secondly, the company’s collaboration with NVIDIA enables NVIDIA’s trained AI models to be deployed on NXP’s broad portfolio of edge processing devices through the eIQ machine learning development environment. Notably, NXP is the first semiconductor vendor to integrate the NVIDIA TAO APIs directly within an AI enablement offering to make it easier for developers to deploy trained AI models at the edge.
22. NRG Energy, Inc. (NYSE:NRG)
Number of Hedge Fund Holders: 49
NRG Energy, Inc. (NYSE:NRG) operates as an energy and home services company in the United States and Canada. There are multiple factors that make this company stand out as a worthwhile investment. Firstly, as per the reports of the third quarter of 2024, the company revised its share repurchase plan to $925 million and is on target to achieve investment-grade credit metrics by the end of 2024. It also plans to collaborate with Renew Home and Google Cloud to create and operationalize 1 GW of Virtual Power Plant platform capacity in Texas. Secondly, the company’s consistent efforts to integrate AI into all its operations make this company a compelling choice for investors. For instance, the company has established an AI Center of Excellence, focusing on developing a risk mitigation strategy. Moreover, the company has partnered with Renew Home to boost its residential VPP capabilities. This aims to distribute hundreds of thousands of VPP-enabled smart thermostats by 2035 and create a nearly 1 GW AI-powered VPP – enabled by Google Cloud technology – to improve the Texas grid’s resiliency and help households manage and lower their energy costs.
21. Nu Holdings Ltd. (NYSE:NU)
Number of Hedge Fund Holders: 54
Nu Holdings Ltd. (NYSE:NU) owns and runs a digital banking platform in Brazil, Mexico, Colombia, the Cayman Islands, Germany, Argentina, the United States, and Uruguay. Following are some compelling reasons that make this company a promising investment opportunity. Firstly, the report for the third quarter of 2024 shows excellent growth. For instance, the monthly Average Cost to Serve Per Active Customer remained below the one dollar level at $0.7 per customer, showing the strong operating leverage of the business model. The company’s efficiency ratio improved 60 basis points quarter-over-quarter, reaching 31.4% and more than 300 basis points better than a year ago, despite the one-off expenses of $48 million associated with the repositioning of Nucoins. Secondly, the company is expanding Pix using AI on its app and WhatsApp. This may attract investors as this initiative aims to speed up processing, reducing transaction time by up to 60% without compromising the security ensured by the app. Moreover, the company also announced the acquisition of Hyperplane, a data intelligence company.
20. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix, Inc. (NASDAQ:EQIX) is a California-based real estate trust that operates data centers and other technology assets. Following are some compelling reasons that make this company a promising investment opportunity. Firstly, the report for the third quarter of 2024 showed compelling financial growth. As per the report, adjusted EBITDA was $1,048 million, showing a 1% increase over the previous quarter and an adjusted EBITDA margin of 48%. In addition, the accelerated pursuit of growing AI demand in the US with the signing of a greater than $15 billion joint venture is expected to nearly triple the capital invested in the company’s xScale data center portfolio once completed. Secondly, the company announced a private AI solution that allows businesses to train AI models in scalable, cost-efficient public and private clouds while ensuring enhanced control, security and low-latency deployment on-premises.
19. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 60
Medtronic plc (NYSE:MDT) makes and sells device-based medical therapies. The company is using AI in medical domains like clinical decision support, creating new indications, and delivering personalized treatments. There are a variety of factors that underscore why this company is a compelling choice for investors. Firstly, as per the reports of the third quarter of 2024, the company reported a revenue of $8.089 billion, an increase of 4.7% as reported and 4.6% on an organic basis. This growth demonstrates good strategic management and strong market demand for its offerings. Secondly, the company has expanded the AiBLE spine surgery ecosystem with new technologies and a Siemens Healthineers partnership. This may hold investment potential as it would integrate innovative techniques, robotics, data and AI, imaging, software and implants that would enable more predictable outcomes in spine and cranial procedures.
18. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 61
KLA Corporation (NASDAQ:KLAC) markets process control and yield management solutions for the semiconductor industry. The firm is attracting the attention of investors due to its strong financial performance. As per the report of the first quarter of 2025, GAAP diluted EPS was $7.01, and non-GAAP diluted EPS was $7.33, both of which were near the upper end of the respective guidance ranges. In addition, cash flow from operating activities for the quarter and last twelve months were $995.2 million and $3.42 billion, respectively, and free cash flow was $934.8 million and $3.15 billion, respectively. The company is committed to integrating AI into its operations, exemplified in defection classification; these algorithms can identify defects at a microscopic level, allowing for rapid classification and categorization, reducing errors and enhancing efficiency. Moreover, KLA’s AI systems are designed to analyze large volumes of data from different manufacturing stages to identify patterns and anomalies. The company also incorporates AI into its robotics systems to enhance the efficiency of material handling and logistics within semiconductor manufacturing facilities.
17. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 64
ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. Wall Street is closely monitoring the financial progress of the company. As per the report of the third quarter of 2024, total net sales were €7.5 billion, gross margin was 50.8%, net income was €2.1 billion, and quarterly net bookings were €2.6 billion, of which €1.4 billion of EUV. The company is well-positioned to capitalize on the growing demand for artificial intelligence technologies. With an expected average sales growth rate of 8%-14% over the next five years, ASML is set to benefit from the increasing adoption of AI in various industries. Moreover, ASML’s leading position in EUV lithography technology gives a significant competitive advantage. The company’s ability to innovate and maintain its technological lead is crucial for its customers, who rely on ASML’s products to manufacture advanced microchips. These developments are expected to help fuel global semiconductor sales to over $1 trillion by 2030, which translates into an annual semiconductor market growth rate of approximately 9% in the period 2025-2030.
16. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. This company stands out as a worthwhile investment due to a combination of favorable factors. Firstly, as per the report of the fourth quarter of 2024, the reported revenue was $39 billion, up 8.8% from FY 2023, and net income was $10.1 billion, up 38% from FY 2023. In addition, the company’s unique position at the edge is driving access to an expanded Total Addressable Market of approximately $900 billion by 2030, with more than 50 billion cumulative connected edge device shipments expected from 2024 through 2030. Secondly, another investment potential initiative is the partnership of the company with Alphabet, offering a combination of chips and software that will let automakers develop their own AI voice assistants using technology from the two firms.
15. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 74
Applied Materials, Inc. (NASDAQ:AMAT) provides equipment, services, and software for the semiconductor industry. This company stands out as a worthwhile investment due to a combination of favorable factors. Firstly, as per the reports of the fiscal year of 2024, Applied generated a record revenue of $27.18 billion. On a GAAP basis, the company recorded a gross margin of 47.5%, a record operating income of $7.87 billion or 28.9% of net sales, and a record EPS of $8.61. Additionally, Applied Materials is betting on one of its most talked about chip designs, the gate-all-around transistor, to drive overall revenue, which was relatively flat year over year at $6.65 billion and down from $6.71 million last quarter. Secondly, the company plans to expand its global EPIC innovation platform with a new collaboration model specifically designed to accelerate the commercialization of advanced chip packaging technologies. The company has convened more than two dozen top R&D leaders from the semiconductor industry to encourage alliances between equipment makers, material providers, device companies and research institutes.
14. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 78
Constellation Energy Corporation (NASDAQ:CEG) generates and sells electricity in the United States. There are several key aspects that contribute to the appeal of this company as a valuable investment opportunity. Firstly, as per the report of the third quarter of 2024, GAAP Net Income was $3.82 per share, and Adjusted (non-GAAP) Operating Earnings were $2.74 per share. These figures demonstrate the company’s potential to drive positive financial growth. Secondly, the company is executing a 20-year Power Purchase Agreement (PPA) with Microsoft, supporting the restart of Three Mile Island Unit 1, renamed the Crane Clean Energy Center. Under the agreement, Microsoft will purchase the output generated from the renewed plant as part of its goal to help power its data centers in PJM with clean energy. Moreover, the company is planning to acquire Calpine, the largest natural gas-fired power fleet operator in the US, for $29.1 billion.
13. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 82
Intuitive Surgical, Inc. (NASDAQ:ISRG) develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care. There are compelling reasons that make this company a promising investment opportunity. Firstly, the report for the fourth quarter of 2024 showed great results. For instance, preliminary fourth quarter 2024 instruments and accessories revenue increased by 23% to approximately $1.41 billion, compared with $1.14 billion in the fourth quarter of 2023, primarily driven by growth in da Vinci and Ion procedure volume and customer buying patterns. Secondly, another factor that may serve as a golden investment opportunity is the integration of AI into surgical systems, such as the da Vinci 5 Surgical System. This system is built to enable the future of AI and machine learning in surgery, with over 10,000x the computing power.
12. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 89
GE Vernova Inc. (NYSE:GEV) is an energy company that engages in the provision of various products and services that generate, transfer, orchestrate, convert, and store electricity. Following are some compelling reasons that make this company a promising investment opportunity. Firstly, in the report for the third quarter of 2024, GE Vernova orders of $9.4 billion increased 17% organically, driven by services growth of 28%, with strength across all segments and equipment growth in Power and Electrification. Revenue of $8.9 billion was up 8%, 10% organically, with growth in equipment and services. Secondly, the company launched AI-based software, Proficy, for Sustainability Insights, designed to operationalize manufacturers’ goals toward sustainability while helping maximize productivity and profitability. Moreover, the company was selected for award negotiations by the US Department of Energy’s (DOE) Hydrogen and Fuel Cell Technologies Office (HFTO), a $1 million project to develop an AI Assistant trained for safe hydrogen (H2) handling and permitting and training focused on the safety for hydrogen development.
11. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 97
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. It has become the center of attention in the finance world due to AI-related power demand. There are other reasons to invest in the stock as well, including solid fundamentals. As per the report of the third quarter of 2024, net income increased by $1,335 million from the third quarter of 2023, driven primarily by unrealized mark-to-market gains on derivative positions and the addition of Energy Harbor. In addition, the cash flow from operations was $1,702 million, indicating strong operational cash generation. The company has advanced its efforts in solar energy storage and nuclear by securing two power purchase agreements at new solar facilities, together totaling over 600 MW, with two of the world’s leading tech companies – one for 200 MW with Amazon in Texas and one for 405 MW with Microsoft in Illinois. Moreover, the company plans to acquire the entire 15% minority interest in its Vistra Vision subsidiary, which will make Vistra the sole owner of its highly valuable, carbon-free assets. This acquisition will increase nuclear ownership by 970 MW and solar and energy storage ownership by 200 MW.
10. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 107
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. There are compelling reasons that make this company a promising investment opportunity. Firstly, as per the report of the fourth quarter of 2024, Micron delivered 93% year-over-year revenue growth in fiscal Q4, as robust AI demand drove a strong ramp of data center DRAM products and high bandwidth memory. Secondly, the company’s high-bandwidth memory portfolio stands at the forefront of technological innovation, offering cutting-edge solutions tailored to the demands of AI. With products like HBM3E, the company aims to deliver exceptional performance, speed and memory bandwidth that may attract investors. The company is also integrating AI-driven algorithms in its memory management systems to ensure the efficient performance of memory under high workloads.
9. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. There are multiple compelling reasons that make this company a promising investment opportunity. Firstly, as per the reports of the third quarter of 2024, data center segment revenue of $3.5 billion was up 122% year-over-year and 25% sequentially, primarily driven by the strong ramp of AMD Instinct GPU shipments and growth in AMD EPYC CPU sales. Additionally, client segment revenue was $1.9 billion, up 29% year-over-year and 26% sequentially, primarily driven by strong demand for Zen 5 AMD Ryzen processors. Secondly, the company has also launched the latest high-performance computing solutions defining the AI computing era, including 5th Gen AMD EPYC server CPUs, AMD Instinct MI325X accelerators, AMD Pensando Salina DPUs, and AMD Ryzen AI PRO 300 series processors for enterprise AI PCs. Moreover, the company has acquired Silo AI to accelerate the development and deployment of AI Models on AMD hardware.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. This company stands out as a worthwhile investment due to a combination of multiple factors. Firstly, as per the final report of the fiscal year 2024, the revenue grew 44% year-over-year to a record $51.6 billion, as infrastructure software revenue increased to $21.5 billion on the successful integration of VMware. Semiconductor revenue recorded was $30.1 billion, driven by AI revenue of $12.2 billion. AI revenue that grew 220% year-on-year was driven by the company’s leading AI XPUs and Ethernet networking portfolio. Secondly, the company is collaborating with different major tech companies, including Google, Meta Platforms, ByteDance, OpenAI, and Apple, to develop custom AI server chips, which will further solidify its position in the AI accelerator market and attract investors. Additionally, the company’s other AI solutions include PCIe Gen 5.0 switches, which serve as the open, standards-based fabric of choice for AI connectivity. They draw half the power of alternatives while offering industry-leading SerDes, telemetry and diagnostic capabilities.
7. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. There are many reasons that make this company a promising investment opportunity. Firstly, as per the report of the fiscal year 2024, the net income of the company was $15.6 billion, a 57% increase year-over-year. Secondly, the company’s 2nm technology provides superior performance and energy efficiency, along with its 3DFabric, driving Socionext’s 3D IC innovations to offer scalable solutions for a variety of applications, including data centers. Moreover, the company is partnered with leading tech firms to enhance design productivity, using large language models (LLMs) for workflow, running assistant flow script and Register-Transfer-Level (RTL) design and debugging, as well as for knowledge assistant tool and usage flow inquiries. This approach helps significantly increase design productivity, speeding up the process from an idea to a successful design. Lastly, the company is advancing 3D integration technologies, like System-on-Integrated Chips (SoIC), to meet the demands of AI applications.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. The following factors make Apple a prime investment opportunity. Firstly, the positive financial growth portrays a great picture of the company’s stability that may attract investors. As per the reports of the third quarter of 2024, the firm generated nearly $27 billion in operating cash flow, allowing for a return of over $29 billion to shareholders. Secondly, the company has introduced Apple Intelligence, a personal intelligence system integrated deeply into iOS 18, iPadOS 18, and macOS Sequoia. This comprises multiple highly capable generative models that are specialized for users’ everyday tasks and can adapt on the fly to their current activities. Moreover, its newly launched iPhone 116 has improved Siri, advanced photo editing, and writing aids. This model also offers free ChatGPT access through a partnership with OpenAI, aiming to transform the smartphone experience with AI advancement. Lastly, the company is dedicated to integrating AI across its product lines, and has invested approximately $20 billion in AI, with an estimated $4 billion invested in 2024 alone.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. The first thing that makes this company stand out is its total operating income, which increased by 34% and its operating margin percent expanded by 4.5 percentage points to 32% in the third quarter of 2024. Additionally, Google Cloud revenues increased 35% to $11.4 billion led by accelerated growth in Google Cloud Platform (GCP) across AI Infrastructure, Generative AI Solutions, and core GCP products. In Cloud, AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals, and YouTube’s total ads and subscription revenues surpassed $50 billion over the past four quarters for the first time. Secondly, the company has launched the most powerful and advanced AI model, Gemini. As per the reports of the second quarter of 2024, more than 1.5 million developers and other people were using the model for various purposes, which may hold key significance for investors. The company has also integrated AI to improve the coding process, which resulted in 25% of new code being AI-generated.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. The following factors make NVIDIA a prime avenue for investment. Firstly, as per the reports of the third quarter of 2024, GAAP earnings per diluted share was $0.78, up 16% from the previous quarter and up 111% from a year ago, and non-GAAP earnings per diluted share was $0.81, up 19% from the previous quarter and up 103% from a year ago. Secondly, the company launched Denmark’s largest sovereign AI supercomputer, an NVIDIA DGX SuperPOD driven by 1,528 NVIDIA H100 Tensor Core GPUs and interconnected using NVIDIA Quantum-2 InfiniBand networking. Moreover, the company introduced the NVIDIA AI Aerial platform for telecommunications providers and began working with T-Mobile, Ericsson and Nokia to accelerate the commercialization of AI-RAN, which may hold great potential for investment. Lastly, the company has announced that SoftBank is building Japan’s most powerful AI supercomputer with the NVIDIA Blackwell platform and has successfully piloted the world’s first combined AI and 5G telecom network using NVIDIA AI Aerial.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
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. This company stands out as a worthwhile investment due to a combination of favorable factors. Firstly, as per the report of the third quarter of 2024, Ad impressions delivered across the Meta apps increased by 7% year-over-year, and the average price per ad increased by 11% year-over-year. In addition, revenue was $40.59 billion, an increase of 19% year-over-year and total costs and expenses were $23.24 billion, an increase of 14% year-over-year. Secondly, Meta has developed LLaMA (Large Language Model Meta AI), an open-source large language model, which is designed to advance natural language processing capability. Llama 3.1 405B is in a class of its own, with unmatched flexibility, control, and state-of-the-art capabilities that rival the best closed-source models. Meta has also announced Grand Teton, designed with compute capacity to support the demands of memory-bandwidth-bound workloads, such as Meta’s deep learning recommendation models (DLRMs), as well as compute-bound workloads like content understanding.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. The following are the key factors that make this company a top choice for investors. Firstly, as per the report of the third quarter of 2024, Microsoft delivered over $245 billion in annual revenue, up 16% year-over-year, and over $109 billion in operating income, up 24%. Additionally, Microsoft cloud now also offers top performance for AI training and inference and the most diverse selection of AI accelerators, including the latest from AMD and NVIDIA, as well as first-party silicon, Azure Maia. Also, the company, in collaboration with Azure AI, is providing access to the most diverse selection of models to meet customers’ unique cost, latency, and design considerations.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
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. There are several key elements that position this company as an appealing choice for investors. Firstly, per the earnings report for the third quarter, operating cash flow increased 57% to $112.7 billion, compared with $71.7 billion for the previous year. The company has also launched new foundation models in Amazon Bedrock and Amazon SageMaker, including AI21 Labs’ Jamba 1.5 family, Anthropic’s upgraded Claude 3.5 Sonnet, Meta’s Llama 3.2, Mistral Large 2, and multiple Stability AI models. Furthermore, Amazon also launched new memory-optimized, compute-optimized, and general-purpose Amazon EC2 instances based on AWS’s latest generation Graviton4 processor, which delivers 75% more memory bandwidth and 30% better compute performance than the previous generation Graviton chips.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ: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 Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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