We recently published a list of 11 AI News Updates on Wall Street’s Radar. In this article, we are going to take a look at where Semtech Corp (NASDAQ:SMTC) stands against other AI news updates on Wall Street’s radar.
China has sensed a window of opportunity in its race to usurp US dominance in AI innovation. As Washington remains focused on building regulatory walls that restrict access to AI, Beijing has resorted to fostering open-sourcing artificial intelligence models to boost AI innovation and adoption. That was clear when DeepSeek unveiled cost-effective AI models that challenged American tech dominance on large language models and data centers.
While the initial focus was on how DeepSeek came up with powerful AI models that rivaled US models, the focus has since changed to how the Chinese startup catalyzed the adoption of open-source AI models. The decision to open source AI source code comes as Chinese companies look to capitalize on growing opportunities in the artificial intelligence software market, growing at a compound annual growth rate of 35.52% and expected to be worth $223.35 billion by 2028, according to Research and Markets.
“DeepSeek’s success proves that open-source strategies can lead to faster innovation and broad adoption,” said Wei Sun, principal analyst of artificial intelligence at Counterpoint Research.
Understanding that it will require time for China to reach the level of the US in advanced AI computing, Chinese firms have concentrated on creating more efficient and cost-effective AI solutions. They are also striving to establish leading roles in open-source AI, cloud services, and worldwide data networks.
These approaches allow China to provide more affordable and unrestricted AI access to nations discontented with US policies, integrating it into developing markets in ways that will be challenging to disrupt. This is not merely a contest in AI; it is a struggle for dominance over the global digital infrastructure both now and in the future.
Since DeepSeek sent shockwaves, several Chinese companies have released open-source models that are free for individual users. The move to open-source AI models underscores a broader shift in China that no longer focuses on proprietary licensing. Instead, Chinese companies freely offer the underlying source code for modification and redistribution.
While US tech giants have always insisted on open-sourcing their models or source code, that has not always been the case in entirety, for starters, most US companies claim to use open-source code while still restricting their use and modifications. Other US companies generate revenue by charging people to access their models even on claiming they are open source.
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).
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Semtech Corp (NASDAQ:SMTC)
Number of Hedge Fund Holders: 57
Semtech Corp (NASDAQ:SMTC) is a technology company that specializes in semiconductors, Internet of Things systems, and cloud connectivity service solutions. The company announced the expansion of its broad optical communications portfolio on March 31 to include solutions across multiple generations of data center connectivity.
The new solutions are designed to address requirements for high speed, processing power and data throughput in machine learning and artificial intelligence clusters. Consequently, they should accelerate the shift to higher bandwidth density while enabling future 800G and 1.6T modules.
“Our 200G and 400G per channel innovations represent critical building blocks that enable the next generation of data center fabric. As AI models continue to grow exponentially in size and complexity, these architectural advances will help hyperscalers build the infrastructure foundation needed for tomorrow’s AI workloads while managing their data center power envelope,” said Amit Thakar, vice president of signal integrity product marketing at Semtech.
Overall, SMTC ranks 2nd on our list of AI news updates on Wall Street’s radar. While we acknowledge the potential of SMTC 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SMTC 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 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
