We recently published a list of Top 9 AI News Updates Investors Probably Missed. In this article, we are going to take a look at where DocuSign, Inc. (NASDAQ:DOCU) stands against other top AI news updates investors probably missed.
Developing and maintaining advanced artificial intelligence systems can be financially challenging. Likewise, spending on the much-needed AI infrastructure is not expected to slow soon. That’s because big tech companies are expected to spend more than $500 billion by early next decade as the focus shifts to running AI models rather than training them.
High-end technology, such as GPUs and TPUs, are necessary for building and running AI models and training big AI models. These parts are costly as they cost thousands of dollars and require frequent maintenance and upgrading. Operational costs are further increased by the processing and storage capacity needed to handle large datasets for model training.
In addition to hardware, companies must contend with personnel expenses since hiring and keeping specialized AI talent such as researchers, engineers, and data scientists comes with extremely competitive pay that is frequently greater than that of other IT industries.
Hyperscale companies or the big tech giants in the US are on course to spend $371 billion in building out data centers and other computing resources in 2025. According to a new study by Bloomberg Intelligence, the amount is expected to increase by over $525 billion by 2032. The surge starkly contrasts initial concerns of a shift of focus into developing cost-effective AI models following DeepSeek revelations.
“Capital spending growth for AI training could be much slower than our prior expectations,” Mandeep Singh, an analyst with Bloomberg Intelligence, wrote in the report. But the immense amount of attention on DeepSeek, he wrote, will likely push tech firms to “increase investments” in inference, making it the fastest-growing segment in the generative AI market.
The introduction of the DeepSeek models raised concerns about the necessity of funding AI infrastructure, but it also increased interest in reasoning models, which demand higher inference costs. Bloomberg analysis predicts that by 2032, training-related expenditures will account for only 14% of hyperscalers’ AI budgets, down from over 40% this year. On the other hand, about half of all AI spending that year may come from inference-driven initiatives.
Our Methodology
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 in 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 software engineer in front of a computer screen, typing code to build the company’s electronic signature software.
DocuSign, Inc. (NASDAQ:DOCU)
Number of Hedge Fund Holders: 51
DocuSign, Inc. (NASDAQ:DOCU) is a technology company that offers electronic signature solutions. It also provides Intelligent Agreement Management (IAM) solutions that enable businesses to create, sign, and manage agreements electronically. It also uses AI to transform agreement data into insights and actions. William Blair upgraded the stock to outperform on March 17 on optimism that the IAM platform has the potential to drive double-digit growth.
According to William Blair, IAM has already shown strong traction, going by the high single-digit percentage of deal volume in the fourth quarter. Additionally, DocuSign, Inc. (NASDAQ:DOCU) is projecting a low double-digit percent growth in its subscription book. The research firm also remains bullish about the stock owing to significant investments in product-led growth, artificial intelligence and enterprise solutions.
Overall, DOCU ranks 6th on our list of top AI news updates investors probably missed. While we acknowledge the potential of DOCU as an investment, our conviction lies in the belief that 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 DOCU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
