We recently published a list of 10 AI Stocks to Watch Amid DeepSeek Impact. In this article, we are going to take a look at where Vertiv (NYSE:VRT) stands against other AI stocks to watch amid DeepSeek impact.
The launch of DeepSeek is drawing new battle lines in the AI competition and many analysts believe the technology investment landscape won’t be the same again after the Chinese breakthrough. Talking to CNBC, Databricks CEO Ali Ghodsi said that DeepSeek would result in “distillation” where companies will make smaller, more efficient models based on the technology:
“So we’re going to just see distillation happening left and right. It’s already happening—like, there’s so many versions of DeepSeek that have been reproduced and redone just in the last week as we speak. So this distillation is going to just create so much competition at the LLM or the AI layer.”
In the coming days, it would be interesting to see how American AI companies tackle this challenge and come up with new products or breakthroughs to maintain their dominance.
READ ALSO 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 AI stocks that are trending on the back of 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).
10 Important AI Announcements for Investors
Vertiv Holdings (NYSE:VRT)
Number of Hedge Fund Investors: 91
Shana Sissel from Banríon Capital Management explained in a latest program on Schwab Network why she likes Vertiv (NYSE:VRT) as an AI play for 2025:
“Vertiv is another AI play that you don’t hear about, but it’s critical data—data center infrastructure that is absolutely critical as we grow and build our AI capabilities. Because you need these cooling systems that they provide to maintain the computer systems to be able to do the machine learning that takes up so much computing power. So, it’s critical infrastructure. And it’s really, as AI goes, so does the stock. It is the leading player in the space, and so it’s one that I really like and that I think people should be taking a look at.”
Baron Small Cap Fund stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its Q3 2024 investor letter:
“Vertiv Holdings Co (NYSE:VRT) is a leader in data center equipment, with significant share in both power and cooling applications. The stock rebounded off recent weakness, as investors gained confidence that a massive build out of AI data centers globally was on the horizon. Vertiv’s strong relationship with chip manufacturers and involvement in the necessary technology roadmap for solutions as the energy density of server racks increases were catalysts. Vertiv’s orders were up 57% year-over-year in the second quarter, backlog was $7 billion, a record, and 2024 operating profit margin and EPS guidance was raised.”
Overall, VRT ranks 6th on our list of AI stocks to watch amid DeepSeek impact. While we acknowledge the potential of VRT, 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 timeframe. If you are looking for an AI stock that is more promising than VRT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.