We recently published a list of 10 AI News Investors Probably Missed. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other AI news investors probably missed.
The world of AI is shifting fast, and DeepSeek is at the center of the latest shake-up. A small Chinese company with just 200 employees has built an AI model that rivals tech giants at a fraction of the cost. This breakthrough raises big questions about the future of AI: Will open-source models challenge the dominance of closed systems? Will companies still need massive data centers, or is AI becoming more efficient? And how will major tech firms respond? While the answers aren’t clear yet, one thing is, that AI is evolving, and the race is far from over.
DeepSeek Breakthrough and the Future of AI Development
Chief Investment Strategist and Portfolio Manager at Hightower, Stephanie Link joined CNBC Squawk Box to discuss the market downturn, especially in tech and energy, and the impact of DeepSeek on AI competition. She acknowledged concerns about the AI semiconductor sector but emphasized that the market is large enough for multiple players. While she questioned whether DeepSeek’s technology is truly superior, she suggested investors look for opportunities in companies like Amazon and Broadcom.
Andrew Ross Sorkin of CNBC raised points about the potential shift toward open-source AI, questioning whether this could commoditize AI technology and reduce the need for massive data centers. Link responded that while open-source models like DeepSeek may become widespread, there are still unresolved questions regarding security and long-term adoption by large companies. Despite this, she believes hyperscalers will continue to invest in AI, with billions earmarked for the sector. While Link sees the AI market continuing to grow, she emphasized the need for careful stock selection rather than jumping in immediately.
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 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).
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) delivers cloud, productivity, and business solutions driven by AI, enhancing operational efficiency and security while making substantial investments in AI development.
On January 29, Bloomberg reported that Microsoft (NASDAQ:MSFT) and OpenAI are investigating whether a group linked to Chinese AI startup DeepSeek improperly accessed data from OpenAI’s technology. Microsoft’s security team reportedly observed individuals, possibly connected to DeepSeek, extracting large amounts of data via OpenAI’s API. DeepSeek recently launched R1, an open-source AI model that claims to rival leading U.S. AI models at a lower cost. OpenAI acknowledged that some Chinese groups use distillation to replicate U.S. AI models and is reviewing indications that DeepSeek may have done so improperly. DeepSeek, however, maintains that its R1 model was built using open-source AI systems rather than proprietary technology from OpenAI, the report states.
Overall, MSFT ranks 1st on our list of AI news investors probably missed. While we acknowledge the potential of MSFT 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 MSFT 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.