In this article, we discuss the 35 AI superstar stocks according to Goldman Sachs.
In September 2024, Peter Oppenheimer, the chief of global equity strategy and the head of macro research for Goldman Sachs in Europe, opined that the rise of tech stocks due to the AI boom was not indicative of a financial bubble. Instead, per the Goldman bigwig, the performance of these companies was expected to continue delivering solid returns to investors, fueled by the rise of AI superstars outside of the magnificent seven, among smaller tech firms and in non-tech sectors. In the months since, the AI hype has only grown stronger, leading to a massive surge in the value of tech offerings, only offset by the recent emergence of Chinese AI startup DeepSeek which is positioning itself as a budget ChatGPT. The success of this Chinese startup, popularized by the downloads that the DeepSeek application has achieved on the mobile operating system markets, has led to a downward spiral in American tech futures.
Although the tech sector selloff has caught many investors by surprise, a new investor note by Goldman Sachs, as seen by news agency Reuters, contends that hedge funds were already anticipating this slump. Per the Goldman report, in the last two weeks, hedge funds have significantly reduced their positions in technology stocks. This retreat is part of a broader trend, as hedge funds have remained hesitant to reinvest in tech-related sectors following the sell-off from June to August last year. Alongside selling major technology stocks, hedge funds have also been offloading shares in adjacent industries, such as power and energy companies that would benefit from AI advancements—especially those supporting data centers and electric vehicle infrastructure.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
However, Goldman remains bullish on AI futures. Per Oppenheimer, tech stocks have dominated global and US equity returns since 2010, contributing 32% and 40%, respectively. The Goldman executive further claims that unlike speculative bubbles, these gains are backed by strong financials, with tech sector earnings per share surging 400% since the 2008 financial crisis, compared to a modest 25% increase across other sectors. Hyperscale companies in software and cloud computing have been key drivers of this growth, leveraging their vast resources and high profitability, he notes. Recent AI advancements have further boosted their valuations, concentrating gains among a few market leaders. Oppenheimer highlights that this pattern is consistent with past technological innovations, where capital inflows and competition drive rapid growth before eventual consolidation.
While dominant AI companies today were also leaders in the previous tech wave, new competitors are emerging, he predicts. The report further notes that the number of AI patents jumped from 8,000 in 2018 to over 60,000 in 2022, signaling growing competition. History suggests that the companies pioneering a technology may not be the ones to benefit most in the long run, Oppenheimer claims. Just as internet infrastructure investments paved the way for social media and ride-sharing dominance, the greatest value in AI may emerge from new players that leverage current advancements in unexpected ways, per the Goldman strategist. The Oppenheimer point of view is echoed in the latest Goldman report. This report highlights that over the past year, hedge funds have been more inclined to sell rather than buy stocks that would typically gain value from a US-driven AI boom.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
However, a smaller group of hedge funds has maintained long positions, meaning they are betting that stock values will rise. In fact, these hedge funds currently hold the highest number of long positions in two years, indicating some confidence in future AI-driven growth, the report adds. Goldman underlines that the investment climate in AI has been heavily influenced by substantial spending from major US technology firms. Following the success of ChatGPT, companies have invested tens of billions of dollars in AI infrastructure. Notably, OpenAI and SoftBank recently committed $19 billion to fund Stargate, a joint venture aimed at developing AI data centers in the United States. Despite these large-scale investments, competition from international players such as Chinese AI startup DeepSeek has raised concerns about the long-term sustainability of US leadership in the AI sector.
Bruno Schneller, managing director at Erlen Capital Management, noted that hedge funds are adopting a cautious wait-and-see approach toward US AI-related stocks. Schneller further highlighted that large projects like Stargate come with significant regulatory complexities. The ongoing uncertainty regarding regulatory execution and enforcement has left many investors wary, contributing to the market’s volatility. While the US AI sector continues to receive significant investments, hedge funds remain uncertain about its profitability in the face of growing international competition and regulatory uncertainties. This cautious stance has led to stock market fluctuations, with many hedge funds opting to sell their tech-related holdings while a select few continue to maintain long positions, betting on future growth.
Our Methodology
For this article, we selected AI stocks by combing through a note on the AI industry by investment bank Goldman Sachs. 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).
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Goldman Sachs’ 35 AI Superstars
35. 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. In the fiscal second quarter ending October 31, 2024, C3.ai reported a 29% year-over-year revenue growth, reaching $94.3 million, surpassing analyst expectations of $91 million. This growth is attributed to heightened demand for enterprise AI solutions across sectors like energy, manufacturing, financial services, and healthcare. A significant factor in this performance is C3.ai’s expanded partnership with Microsoft. The company has become a preferred AI application provider on Microsoft’s Azure cloud platform, enhancing its market reach and credibility. Additionally, C3.ai has raised its fiscal year 2025 revenue forecast to between $378 million and $398 million, up from the previous range of $370 million to $395 million, indicating confidence in sustained demand for its AI offerings.
34. 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. Last year, Iron Mountain launched the AI-powered InSight Digital Experience Platform (DXP), designed to automate workflows, ensure compliance, and transform unstructured data into actionable insights. This platform enhances operational efficiency and data management for clients, positioning Iron Mountain as a leader in AI-driven information management. In Q3 2024, Iron Mountain reported total revenues of $1.6 billion, marking a 12.2% increase compared to the same period in 2023. During Q2 2024, the company achieved revenues of $1.53 billion, surpassing analyst expectations of $1.51 billion. The storage rental segment, which constitutes a significant portion of Iron Mountain’s revenue, experienced an 11% growth, reaching $920 million. This growth was largely attributed to heightened demand for data storage solutions amid increasing AI workloads and cloud migration.
33. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 33
Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high-performance server and storage solutions based on modular and open architecture. This company offers a range of qualities that make it a compelling investment. For instance, as illustrated in the fiscal year 2024 fourth fiscal report, reported net sales were $5.31 billion versus $3.85 billion in the third quarter, and $2.18 billion in the same quarter of last year. It demonstrates the company’s strong market demand, expansion in sales, and ability to scale operations effectively. In addition, the company, in collaboration with NVIDIA, is showcasing the latest solutions for the retail industry at the National Retail Federation. As generative AI grows in capability and becomes more easily accessible, retailers are leveraging NVIDIA NIM microservices, part of the NVIDIA AI Enterprise software platform, for a broad spectrum of applications.
32. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers. There are numerous factors that make this company a smart investment choice. An important point is the company’s expanding influence across diverse industries like cloud computing and mobile technology. For instance, as per the report for the second quarter of last year, revenue was $844 million, increasing 5% year-over-year due to record levels of royalty revenue and continued strength in license revenue. Moreover, in the third quarter, total revenue was a record $939 million, increasing 39% year-over-year and 1% sequentially. The company has collaborated with The Aston Martin Aramco Formula One Team, and joined as the team’s official AI compute platform partner.
31. Celestica Inc. (NYSE:CLS)
Number of Hedge Fund Holders: 40
Celestica Inc. (NYSE:CLS) offers a range of product manufacturing and related supply chain services. There are a host of factors that make this company an attractive investment prospect. Notably, in the fiscal year 2024, the company showed consistent revenue growth across all quarters. For instance, as per the report for the third quarter of 2024, the reported revenue reached $2.50 billion, marking a 22% increase compared to $2.04 billion in Q3 2023 and a slight improvement of approximately 5% over the second quarter’s $2.39 billion. The second quarter also saw strong performance, with a 23% growth from $1.94 billion in Q2 2023, following the first quarter’s revenue of $2.21 billion, a 20% increase from $1.84 billion in Q1 2023. The company has recently secured a program win with a major hyperscale customer for 1.6 Terabyte switching, showcasing the company’s market leadership and innovation in high-bandwidth networking solutions.
30. Fabrinet (NYSE:FN)
Number of Hedge Fund Holders: 42
Fabrinet (NYSE:FN) offers optical packaging, along with precision optical, electro-mechanical, and electronic manufacturing services. The company produces fiber-optic cables that power telecommunications, AI data centers, and the global Internet infrastructure. The case for investing in this company is strong due to several factors. One of them is the company’s strong financial growth and operational efficiency. As per the fiscal year 2024 report, total revenue was $2.88 billion, compared to $2.65 billion for fiscal year 2023, reflecting strong sales and improved profitability. In addition, GAAP net income was $296.2 million, compared to $247.9 million for fiscal year 2023, indicating better cost management. These metrics strengthen the company’s competitive position, making it a lucrative opportunity for investors. Furthermore, the company is most likely to benefit from large-scale AI infrastructure projects, such as Project Stargate which is a $500 billion initiative backed by Oracle, OpenAI, SoftBank, and MGX, aimed at investing in AI data centers over the next four years. Moreover, the company’s strong partnership with NVIDIA plays a key role in driving positive growth in its datacom segment.
29. Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Holders: 43
Teradyne, Inc. (NASDAQ:TER) designs, develops, manufactures, and sells automated test systems and robotics products globally. The company serves key markets such as semiconductors, defense, storage, and wireless testing. This company offers a range of qualities that make it a compelling investment. As per the reports for the third quarter of 2024, reported revenue was $737 million, increasing 1% from the $730 million reported in Q2 2024. The growth in Q3 was primarily driven by higher revenue in System Test, which rose from $61 million in Q2 to $73 million, and Wireless Test, which increased from $36 million in Q2 to $33 million. However, revenue from Semiconductor Tests remained stable at $543 million in both Q2 and Q3, while Robotics revenue saw a small dip from $90 million in Q2 to $89 million in Q3. Compared to the first quarter of 2024, where revenue totaled $600 million, Q3’s revenue represents a solid increase of 22.8%, with growth across all segments except for Robotics, which remained largely consistent. In addition, the company’s partnership with Analog Devices aims to accelerate the development and usage of advanced robotics. This would enable the company to deliver state-of-the-art solutions that drive innovation and efficiency throughout the semiconductor lifecycle.
28. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a public American company that specializes in software platforms for big data analytics. There are many aspects that contribute to this company being an excellent investment opportunity. Among them is the company’s consistent efforts to drive positive financial growth across all its quarters for the fiscal year 2024. For instance, as per the report for the third quarter of 2024, the US revenue grew 44% year-over-year and 14% quarter-over-quarter, reaching $499 million. This strong performance follows the second quarter of 2024, where US commercial revenue increased 55% year-over-year and 6% quarter-over-quarter, totaling $159 million. Similarly, in the first quarter of 2024, US commercial revenue saw a 40% year-over-year growth and a 14% quarter-over-quarter increase, reaching $150 million. Moreover, the company’s extended long-term partnership with the US Army to deliver the Army Vantage capability in support of the Army Data Platform also positions the company as a strong investment choice. The total value of this agreement is $400,746,583 for a period of up to four years, with a total available ceiling of $618,871,428.
27. Juniper Networks, Inc. (NYSE:JNPR)
Number of Hedge Fund Holders: 47
Juniper Networks, Inc. (NYSE:JNPR) designs, develops and sells network products and services worldwide. This company is an exceptional investment option for various reasons. As per the report for the third quarter of 2024, the company achieved a GAAP operating margin of 7.1%, reflecting an improvement from 6.3% in Q3 2023 and a significant increase from 3.8% in Q2 2024. This growth in operating margin indicates better cost management and operational efficiency. In the second quarter of 2024, the GAAP operating margin was 3.8%, a decline from 9.9% in Q2 2023, but a notable improvement from 1.2% seen in Q1 2024. The margin improvement from Q1 to Q2 suggests the company’s ability to recover from losses and stabilize its operations. In addition, the company has announced the latest evolution of its Juniper Partner Advantage JPA program for 2025. The program is designed to provide partners with the resources, support and strategic guidance to expand opportunities and boost profitability.
26. 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 many aspects that contribute to this company being an excellent investment opportunity. Among them is the company’s ability to enhance shareholder value through strategic share repurchases. For instance, in the report for the third quarter of 2024, the company’s share repurchase plan is up to $925 million and plans to achieve an investment-grade credit metric. This can boost earnings per share and signal confidence in its future performance. Moreover, the company’s ongoing partnership with Renew Home aims to boost its residential VPP capabilities. NRG and Renew Home plans would 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. This would improve the Texas grid’s resiliency and help households manage and lower their energy costs.
25. Coherent Corp. (NYSE:COHR)
Number of Hedge Fund Holders: 51
Coherent Corp. (NYSE:COHR) develops, manufactures, and markets engineered materials, optoelectronic components, and devices worldwide. There are numerous factors that make this company a smart investment choice. An important factor is the company’s operational strength and effective cost management, as illustrated in the fiscal year report. Reported total revenue was $4.708 billion, with GAAP gross margin of 30.9% and on a non-GAAP basis, gross margin was 36.0% with net income per diluted share of $1.67. This reflects the company’s strong profitability and its potential for sustained growth. In addition, fourth quarter fiscal 2024 revenue increased by 9% sequentially, primarily driven by ongoing AI-related strength in the company’s Datacom transceiver business. Moreover, the company’s strong partnership with GE Vernova positions it as a lucrative investment opportunity in this AI-driven world. The company’s advancements in 800G transceivers are pivotal for handling the massive volumes of data required for AI workloads. These high-speed transceivers are integral to data centers and AI systems, facilitating faster and more efficient data processing, and adding a competitive edge to the company’s portfolio.
24. 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. Equinix reported total revenues of $2.2 billion in Q3 2024, marking a 7% year-over-year increase. The company achieved an adjusted EBITDA of $1.1 billion, reflecting a 12% growth compared to the same period in the previous year. Interconnection services, a critical component for AI workloads, saw a 10% year-over-year increase, driven by the Equinix Fabric platform, which surpassed a revenue run rate of $250 million. Since 2021, Equinix has collaborated with NVIDIA on the AI LaunchPad program, providing enterprises with immediate access to NVIDIA-powered infrastructure and software to streamline the AI lifecycle. In December 2024, Equinix partnered with Dell to offer flexible and scalable AI infrastructure solutions, enabling enterprises to deploy tailored AI strategies effectively.
23. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 60
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. This company stands out as a strong investment opportunity for a variety of reasons. One of the main factors is the company’s exceptional financial position, illustrated in the report for the fiscal year 2024. For instance, cash and investments were $9 billion, and Dell reached its core leverage target of 1.5x exiting the fiscal year. The company is increasing its annual cash dividend by 20% to $1.78 per common share. This demonstrates the company’s ability to generate strong cash flow and confidence in its continued growth while prioritizing shareholder returns. Moreover, the company is an Elite Sponsor at NVIDIA GTC 2025, a global AI conference. At GTC 2025, Dell aims to empower organizations across industries to harness AI for solving their most complex challenges with Dell AI Factory with NVIDIA, the industry’s first end-to-end enterprise AI solution, designed to simplify and accelerate AI adoption.
22. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 63
Analog Devices, Inc. (NASDAQ:ADI) designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products. This company is an exceptional investment option for various reasons. For instance, the company’s strong financial performance and ability to generate significant cash flow portray it as a compelling choice, as illustrated in the report for the fiscal year 2024. Reported revenue was more than $2.4 billion, exceeding the expected range and showing sequential growth across all end markets. In addition, fiscal 2024 operating cash flow was $3.9 billion, and free cash flow was $3.1 billion. Moreover, the US Department of Commerce has signed four separate non-binding preliminary memoranda of terms (PMT) under the CHIPS and Science Act to provide up to $105 million in proposed direct funding to Analog Devices. As the company is at the forefront of innovation in the expansion of US semiconductor manufacturing, this investment would strengthen its workforce training and community partnerships.
21. 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. The appeal of this company as an investment lies in multiple factors. To illustrate, the company delivered consistent growth in revenue and improved profitability across three quarters of the fiscal year 2024. For instance, in Q3, the company reported total net sales of €7.5 billion, with a gross margin of 50.8% and net income of €2.1 billion, reflecting strong performance and profitability. In Q2, total net sales were €6.2 billion, with a slightly higher gross margin of 51.5% and net income of €1.6 billion, showing solid growth but a dip in profitability compared to Q3. For Q1, the company achieved €5.3 billion in net sales, with a gross margin of 51% and net income of €1.2 billion, marking a strong start to the year. Moreover, the company plans to expand its EUV capabilities through new innovations in single-patterning technology, specifically EUV 0.33 NA and EUV 0.55 NA systems, for both advanced Logic and DRAM manufacturing.
20. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 58
Lam Research Corporation (NASDAQ:LRCX) markets semiconductor processing equipment. The company is the third leading supplier of wafer fab equipment. This equipment is used by chipmakers in their chip manufacturing process. The demand for these chips has skyrocketed as firms seek to power their data centers with these chips for AI tasks. This company is an exceptional investment option for various reasons. For example, as illustrated in the report for the third quarter of 2024, reported revenue was $4,168 million, gross margin was $2,003 million, operating expenses were $738 million, operating income was 30.3% of revenue, and net income was $1,116 million, or $0.86 per diluted share on a US GAAP basis. These metrics reflect the company’s solid profitability from its core operation and its operational efficiency. Moreover, the company has joined RE100, an initiative composed of influential businesses around the world with a goal of achieving 100% renewable electricity in their operations.
19. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 68
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. There are several reasons why this company is a worthwhile investment. A key factor is the company’s strong financial growth, as illustrated in the fiscal year quarterly reports of 2024. For instance, reported revenue was $13.3 billion in the third quarter. In the second quarter, revenue was $12.8 billion, reflecting a 1% decrease year-over-year, indicating a slight slowdown compared to the same period last year. However, the first-quarter revenue of $12.7 billion marked a 9% increase YoY, demonstrating solid growth at the start of the year. Moreover, the company extended its computing leadership in the AI PC, edge and auto spaces with the launches of Intel Core Ultra 200V series mobile processors with Intel vPro, a new line of Intel Core Ultra processors for enthusiasts and edge computing, and a new Adaptive Control Unit designed for electric vehicle (EV) power trains and zonal controller applications at Consumer Electronic Show 2025.
18. Amphenol Corporation (NYSE:APH)
Number of Hedge Fund Holders: 69
Amphenol Corporation (NYSE:APH) specializes in designing, manufacturing, and marketing electrical, electronic, and fiber optic connectors. This company is an exceptional investment option for various reasons. For example, the report for the fiscal year 2024 shows that reported sales were $15.2 billion, increasing 21% in US dollars and 13% organically compared to the full year 2023. In addition, GAAP Diluted EPS was $1.92, marking an increase of 24% as compared to the prior year. Moreover, the company is leading DesignCon 2025, a premier event focused on high-speed communications and system design. It is a popular event for chip, board, and systems design engineers to network, source, and stay ahead of industry change.
17. Arista Networks, Inc. (NYSE:ANET)
Number of Hedge Fund Holders: 70
Arista Networks, Inc. (NYSE:ANET) engages in the development, marketing, and sale of data-driven, client-to-cloud networking solutions for data center, campus, and routing environments. There are a host of factors that make this company an attractive investment prospect. For instance, reported revenue was $1.811 billion for the third quarter of 2024, reflecting a 7.1% increase compared to the second quarter of 2024 and a 20% increase from the third quarter of 2023, signaling strong growth year-over-year and quarter-over-quarter. In contrast, revenue was $1.571 billion for the second quarter of 2024, marking a 2% increase compared to the fourth quarter of 2023 and a 16.3% growth from the first quarter of 2023, reflecting consistent growth across both periods. Moreover, the company is actively engaged in five major cluster trials, with three progressing to pilot stages. These groundbreaking AI-driven products include its CloudEOS Edge, cognitive Wi-Fi software, and AI ethernet switching platforms.
16. 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. There are many aspects that contribute to this company being an excellent investment opportunity. Among them is the company’s strong financial growth, as illustrated in the fiscal year report of 2024. For instance, Applied generated record revenue of $27.18 billion, and 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, on a non-GAAP adjusted basis, the company reported a gross margin of 47.6%, a record operating income of $7.92 billion or 29.2% of net sales, and a record EPS of $8.65. Moreover, the company’s AIx platform enables engineers to gain real-time insights into semiconductor processes, optimizing thousands of variables to improve performance, power efficiency, area, cost, and time to market. The AIx platform works across all Applied Materials process equipment, eBeam metrology systems and inspection systems and is extendable from lab to fab.
15. 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 offers a range of qualities that make it a compelling investment. For instance, as per the year 2024 third-quarter report, the company reported revenue of $10.24 billion, a 19% increase from the same time in the previous year. This reflects the company’s strong financial performance and growth momentum. Moreover, the company has announced the Qualcomm AI On-Prem Appliance Solution, an on-premises desktop, and Qualcomm AI Inference Suite, a set of software and services for AI inferencing spanning from near-edge to cloud. The combination of these new offerings allows small and medium businesses, enterprises, and industrial organizations to run custom and off-the-shelf AI applications on their premises, including generative workloads. Running AI inference on-premises can deliver significant savings in operational costs and overall total cost of ownership compared to the cost of renting third-party AI infrastructure.
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. The case for investing in this company is strong due to several factors. One of them is the company’s strong earnings growth and ability to deliver consistent profitability, portraying a compelling opportunity as illustrated in the fiscal year quarterly reports of 2024. In the third quarter of 2024, the reported GAAP net income was $3.82 per share, and adjusted (non-GAAP) operating earnings of $2.74 per share, showing strong profitability under standard accounting measures and excluding non-recurring items. In the second quarter of 2024, GAAP net income was $2.58 per share, with adjusted operating earnings of $1.68 per share. In the first quarter of 2024, GAAP net income stood at $2.78 per share, with adjusted operating earnings of $1.82 per share, reflecting a strong start to the year. Moreover, the company plans to acquire Calpine in a cash and stock transaction valued at an equity purchase price of approximately $16.4 billion, composed of 50 million shares of Constellation stock and $4.5 billion in cash plus the assumption of approximately $12.7 billion of Calpine net debt. This agreement would create the nation’s largest clean energy provider, opening opportunities to serve more customers coast-to-coast with a broader array of energy and sustainability products.
13. 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. There are numerous factors that make this company a smart investment choice. One of the most important factors is the company’s organic growth and strong market demand, as illustrated in the fiscal year 2024 report. For instance, the company received orders of $44.1 billion, showing a 7% organic growth, led by Power and Electrification equipment and services in each segment. Moreover, revenue was $34.9 billion, reflecting a 5% increase and 7% organic growth driven by the Electrification and Power sectors, contributing to its overall growth. The company’s Onshore Wind business has signed an agreement to provide 14 4.2MW-117m turbines for the Iwaya and Shitsukari wind farms being developed by Eurus near Higashidori, Aomori, Japan. The order was secured in the fourth quarter of 2024, and the projects are expected to reach commercial operations in 2028.
12. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 91
Vertiv Holdings Co (NYSE:VRT) designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. This company stands out as a strong investment opportunity for a variety of reasons. Notably, as per the report for the third quarter of 2024, net sales were $2,074 million, 19% higher than the third quarter of 2023. In addition, an operating profit of $372 million shows an increase of 48% from the third quarter of 2023 and an adjusted operating profit of $417 million, increasing 41% from the third quarter of 2023. These metrics reflect the company’s significant growth and profitability, making it a great investment avenue. Moreover, the company’s AI-driven products, like Vertiv 360AI Portfolio, include power, cooling, and service solutions designed to address the complex challenges arising from the AI revolution, positioning the company as a notable player. Lastly, the company’s partnerships with leading chipmakers like NVIDIA and Intel enhance its market position, enabling it to meet the specialized demands of AI workloads.
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. There are numerous factors that make this company a smart investment choice. An important factor is the company’s strong financial performance and consistent operational efficiency, illustrated in the quarterly reports for the fiscal year 2024. In the third quarter of 2024, the company reported Net Income from Ongoing Operations of $1,855 million and Adjusted EBITDA of $1,444 million, reflecting a substantial improvement in profitability. Comparatively, in the second quarter of 2024, the company recorded net income of $492 million and Adjusted EBITDA of $1,414 million, showcasing steady operational efficiency but a significant increase in net income in Q3. Moreover, the company has secured 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. This may hold investment potential as the surge in electricity demand from AI-driven data centers and cloud-computing infrastructure would further fuel Vistra’s growth.
10. 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 various reasons why this company makes an excellent investment. To begin with, the company’s enhanced financial performance is reflected in the fiscal year 2024 quarterly reports. In the third quarter of 2024, the company reported revenue of $6.8 billion, a significant improvement from the $5.8 billion in the second quarter. The gross margin increased to 50% from 49%, showcasing improved operational efficiency. Operating income saw a substantial rise to $724 million compared to $269 million in Q2, and net income nearly tripled to $771 million from $265 million. Moreover, the company has announced new gaming products to expand its leadership in desktop, mobile and handheld gaming and deliver incredible performance for the most demanding games. AMD has revealed new Ryzen 9900X3D and 9950X3D Series desktop processors, offering great performance for desktop gamers, as well as the second-generation handheld gaming PC processor – the Ryzen Z2.
9. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 107
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. There are several compelling reasons that make this company a prime investment opportunity. To start with, the company achieved substantial growth, as illustrated in the report for the fiscal year 2024. Reported revenue was $25.11 billion versus $15.54 billion for the prior year, and GAAP net income was $778 million, or $0.70 per diluted share. Moreover, as generative AI needs to access and absorb enormous amounts of data all at once and draw from vast stores of memory to determine proper responses, this positions Micron Technology at the forefront with its groundbreaking products. Micron technologies like HBM3E, high-density DDR5 DRAM, and multi-terabyte SSD storage, all of which enable the speed and capacity required for generative AI training and inference in the cloud, hold great investment potential.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. There are numerous reasons for considering this company a strong investment. To start with, the company’s exceptional growth and profitability are illustrated in the report for the fiscal year 2024. For instance, total revenue was $14,054 million, increasing 51% from the prior year period, GAAP net income of $4,324 million, and non-GAAP net income of $6,965 million. This shows the company’s financial health and its ability to drive substantial growth in both revenue and profitability. Moreover, the company plans to empower partners to grow their practices while providing customers with access to more agile, responsive solutions. This would include investments in training, certification programs, and tools to help partners deliver world-class professional services for VMware and Broadcom software solutions.
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 various reasons why this company makes an excellent investment. To begin with, the report for the third quarter of 2024 positions the company as a key player in the industry due to its exceptional financial performance. The company reported a 39% increase in revenue year-over-year, reaching a net income of $759.69 billion and a 54.2% rise in net income. Moreover, the company’s 2nm (N2) technology development adds more worth to the company’s portfolio. N2 technology features the company’s first generation of nanosheet transistor technology, with full-node strides in performance and power consumption expected to be introduced this year.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. In the fourth quarter of 2024, Apple reported a revenue of $94.9 billion, marking a 6% increase from the same period in the previous year. This growth was attributed to the successful launch of new products, including the iPhone 16 lineup, Apple Watch Series 10, and AirPods 4. Apple has been integrating AI across its product ecosystem to enhance user experience and drive growth. In June 2024, the company introduced Apple Intelligence, a personal intelligence system for iPhone, iPad, and Mac. This system combines generative models with personal context to deliver relevant and useful intelligence to users. By October 2024, Apple Intelligence became available to users, offering features such as writing refinement, notification summaries, and a more natural and capable Siri. These AI-driven enhancements have been well-received, contributing to increased user engagement and satisfaction.
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. This company stands as a top investment choice for a variety of reasons. To start with, the company showed strong growth in profitability, illustrated in the third quarter of 2024; for instance, a 34% increase in net income was reported, and a 37% rise in EPS, reaching $2.12. Moreover, in Q2 of 2024, the company achieved revenues of $85 billion, a 14% year-on-year increase, driven by strong performance in Search and Cloud. Notably, Cloud revenue exceeded $10 billion for the first time, with $1 billion in operating profit from this segment, highlighting the company’s successful expansion. The advancements in Gemini 2.0 in generative AI, the international expansion of Waymo and the re-entry into the VR/AR space with Android XR make Alphabet a lucrative choice for investment.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. There are various reasons why this company makes an excellent investment. For instance, the report for the third quarter of year 2024 reflects the company’s exceptional growth in profitability. For the quarter, GAAP earnings per diluted share was $4.93, increasing 33% from the previous quarter and a 765% increase from a year ago. Additionally, non-GAAP earnings per diluted share was $5.16, increasing 28% from the previous quarter and 486% rise from the previous year. Moreover, the NVIDIA Cosmos platform plans to advance physical AI with new models and video data processing pipelines for robots, autonomous vehicles and vision AI. Lastly, the company aims to revolutionize graphics with the NVIDIA GeForce RTX 5090 GPU, the most powerful GeForce RTX GPU so far, with 92 billion transistors and delivering 3,352 trillion AI operations per second (TOPS).
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. In the third quarter of 2024, Meta reported total revenue of $40.6 billion, marking a 19% year-over-year increase. Operating income reached $17.4 billion, resulting in a 43% operating margin, while net income was $15.7 billion, or $6.03 per share. Analysts anticipate continued growth, with projections for the fourth quarter of 2024 estimating earnings per share of $6.74 on revenue of $46.99 billion, reflecting a 15% increase from the previous quarter. Meta has significantly increased its investment in AI, with capital expenditures projected between $60 billion and $65 billion for 2025, surpassing analysts’ expectations of $51.4 billion. CEO Mark Zuckerberg has declared 2025 as the defining year of AI, emphasizing the company’s commitment to advancing its AI capabilities.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. In the first quarter of fiscal year 2025, Microsoft returned $9 billion to shareholders through dividends and share repurchases. Analysts project that for the quarter ending December 2024, Microsoft’s net income will be approximately $23.3 billion, with earnings per share expected at $3.11. Microsoft has been at the forefront of integrating AI across its product and service offerings. The company has pioneered AI breakthroughs in areas such as conversational speech recognition, machine translation, image captioning, and natural language understanding. In fiscal year 2025, Microsoft is on track to invest approximately $80 billion to build out AI-enabled data centers to train AI models and deploy AI and cloud-based applications globally.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. In the third quarter of 2024, Amazon reported net sales of $158.9 billion, an 11% increase from $143.1 billion in the same period the previous year. Net income rose to $15.3 billion, or $1.43 per diluted share, compared to $9.9 billion, or $0.94 per diluted share, in the third quarter of 2023. Amazon has been actively integrating AI across its services and operations. AWS offers a comprehensive suite of AI and machine learning services, including generative AI capabilities, enabling businesses to build and scale AI applications. In December 2024, Amazon announced a $50 million Generative AI Impact Initiative to support public sector organizations in accelerating innovation using AWS generative AI services and infrastructure. The company is also investing $11 billion in data centers and AI cloud infrastructure in Georgia, following a previous $18.5 billion investment in the state.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a 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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