We recently compiled a list of the 10 AI Stocks Worth Watching Today. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against the other AI stocks.
The R1 model is going to get a successor soon. For those who don’t know, Chinese artificial intelligence startup DeepSeek wreaked havoc in the tech world last month with its cut-price AI reasoning model, the R1, claiming that it outperforms many Western competitors.
Only a month later, hundreds of Chinese companies have already integrated the AI model into their products and services. At least 13 Chinese city governments and 10 state-owned energy companies also report deploying DeepSeek into their systems. Tech giants Lenovo, Baidu, and Tencent have integrated it too.
Goldman Sachs anticipates that the country’s economy will reflect the positive impact of AI adoption from next year.
“The recent emergence of DeepSeek … suggests faster AI development and adoption in China than we previously anticipated.”
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The impact of the emergence was so intense, that it triggered a $1 trillion-plus sell-off in global equities markets last month. While the initial release of the R2 model was scheduled for release sometime in May, the company is now planning to launch it as early as possible.
“DeepSeek demonstrates that China is at or near the cutting edge of AI development, which boosts the prestige of China’s economy and tech ecosystem, making them more attractive for global investors”.
-Gabriel Wildau, managing director at Teneo.
DeepSeek is expecting highly of its new model too. The company said that it hopes that its new model will be able to produce better coding and be able to reason in languages beyond English. While competitors are still dealing with the implications of the R1 model, only time will tell how the market is going to react to its successor.
“The launch of DeepSeek’s R2 model could be a pivotal moment in the AI industry. DeepSeek’s success at creating cost-effective AI models “would likely spur companies worldwide to accelerate their own efforts … breaking the stranglehold of the few dominant players in the field”.
-Vijayasimha Alilughatta, chief operating officer of Indian tech services provider Zensar.
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. The hedge fund data is as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On February 24, Chegg Inc., an American education technology company, filed suit in federal district court against Google.
The company claims that Google’s artificial intelligence summaries of search results have negatively impacted its traffic and revenue. At the same time, Chegg is also weighing strategic options for its business, engaging with firms such as Goldman Sachs, and exploring options such as acquisition or going private.
“These two actions are connected, as we would not need to review strategic alternatives if Google hadn’t launched AI Overviews. Traffic is being blocked from ever coming to Chegg because of Google’s AIO and their use of Chegg’s content to keep visitors on their own platform”.
Chief Executive Officer Nathan Schultz said on Monday.
“Chegg has a superior product for education as evident by our brand awareness, engagement and retention. Unfortunately, traffic is being blocked from ever coming to Chegg because of Google’s AIO and their use of Chegg’s content to keep visitors on their own platform. We retained Goldman Sachs as the financial adviser in connection with strategic review and Susman Godfrey with respect to our complaint against Google.”
Overall GOOG ranks 2nd on our list of the AI stocks worth watching today. While we acknowledge the potential of GOOG 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 time frame. If you are looking for an AI stock that is more promising than GOOG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
