We recently published a list of 10 AI Stocks on Wall Street’s Radar After DeepSeek Breakthrough. In this article, we are going to take a look at where F5, Inc. (NASDAQ:FFIV) stands against other AI stocks on Wall Street’s radar after DeepSeek breakthrough.
AI investors are desperately trying to find clues on the real impact of DeepSeek on chip demand in the future and gauge how the breakthrough in China would impact US companies. Tae Kim, senior technology writer at Barron’s, said in a latest program on CNBC that DeepSeek has been able to significantly reduce the AI costs but that would increase more use cases of the technology:
“Over time, computing history has shown when you get more computing power and put that into the hands of developers, they figure out new applications, new workloads to use it. I mean, there’s that saying, “Oh, you only need 640k of memory,” and then obviously that proved false. So over time, like researchers, I mean, we have healthcare, drug discovery, trillions of proteins that need to be simulated, robotics. There are these three mega trends that are happening this year right now: multimodal, where you analyze audio and video, there’s AI agents, all these things are happening that are going to require more computing power.”
The question, however, everyone would be focusing on in the coming days is what if a hardware breakthrough happens in China and the country comes up with its own AI chips performing at par with its US counterparts.
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For this article, we picked 10 AI stocks currently trending on the latest news. With each stock, we have mentioned the number of hedge fund investors. 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).
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F5, Inc. (NASDAQ:FFIV)
Number of Hedge Fund Investors: 31
F5, Inc. (NASDAQ:FFIV) recently jumped after strong quarterly results that showed AI could be a catalyst for the company.
“First, F5 Inc is benefiting from a more stable IT spending environment, improved technology refresh, and competitive wins,” said Goldman Sachs analyst Michael Ng, in an investor note. “Second, F5 Inc continues to demonstrate AI demand momentum. The majority of its AI deals are for delivering and securing data for model training and inference. Third, F5 Inc competitive position within ADC and security is being reinforced with evidence of expansion deals and share gains.”
F5, Inc. (NASDAQ:FFIV) raised its fiscal year revenue growth expectations from 4-5% to 6-7% after exceeding first-quarter forecasts and projecting second-quarter revenue between $705 million and $725 million (approximately 5% growth at the midpoint).
“The company highlighted three areas of early AI opportunity: delivering and securing data for model training, security for inferencing, and AI factory load balancing,” said Barclays analysts Tim Long and Emma Cho, in an investor note. “Though the partnership with Nvidia (NVDA) is still in its early stages, F5, Inc. (NASDAQ:FFIV) mentioned growing momentum. Demand for systems was positive and given the price increases implemented Jan 1st and the healthy pipeline we think it can carry into the rest of FY25.”
Hotchkis & Wiley Mid-Cap Value Fund stated the following regarding F5, Inc. (NASDAQ:FFIV) in its Q3 2024 investor letter:
“F5, Inc. (NASDAQ:FFIV) sells application networking and security software, as well as data center appliances. The company’s stock price rebounded sharply in Q3 after reporting a growing pipeline and better close rates in subscription software sales. F5 has no debt, trades at an attractive valuation, and is benefiting from an improving gross margin and lower operating expenses.”
Overall, FFIV ranks 10th on our list of AI stocks on Wall Street’s radar after DeepSeek breakthrough. While we acknowledge the potential of FFIV, our conviction lies in the belief that under the radar 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 FFIV 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.
