The United States is gearing up to be the leader in artificial intelligence technology. However, other nations are also intensifying their efforts to compete in this rapidly advancing field. To challenge the United States’ dominance in this critical technology, Russia has recently pledged to participate in the global race for artificial intelligence actively.
READ NOW: 10 AI Stocks Taking Wall Street by Storm and Top 10 AI Stocks on Latest News and Analyst Ratings
Speaking at Russia’s flagship AI conference last week, President Vladimir Putin said Russia would develop artificial intelligence with BRICS partners and other countries.
According to Putin, the new AI Alliance Network would include national associations and development institutions in the field of AI from BRICS countries and other interested states. He also claimed that the country must participate equally in the global AI race.
“Russia must participate on equal terms in the global race to create strong artificial intelligence. It is precisely the advanced solutions that Russian scientists are currently working on. We invite scientists from all over the world to join in the collaboration”.
-Putin told an AI conference in Moscow.
Russia has been subject to Western sanctions which have been directed to restrict the country’s access to technologies it needs in the war against Ukraine. As a result, some of the world’s major producers of microchips have halted exports to Russia, limiting its AI ambitions.
Reuters reports how Russia’s dominant lender Sberbank, who is currently leading the AI development in Russia, admits that the microchips underpinning AI development are the trickiest hardware to replace. In this regard, it noted how national AI associations from BRICS members Brazil, China, India, South Africa, Serbia, Indonesia, and other non-BRICS countries, had joined the AI Alliance Network.
The network will be working toward joint research in technology and AI regulation, offering opportunities for AI products to be sold in other member countries’ markets. Currently, the leading AI powers of the world are the United States and China. It goes without saying that Russia’s alliance with China has the potential to significantly reshape the future landscape of artificial intelligence.
Meanwhile, the US is also gearing up to continue leading in AI. President-elect Donald Trump has already appointed an AI and Crypto Czar. Trump is also set to repeal President Joe Biden’s executive order on AI. Trump plans to repeal Biden’s AI order to reduce regulatory constraints, fostering rapid innovation and maintaining the U.S. edge in the global AI race.
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.
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).
Photo by Andrea De Santis on Unsplash
10. Veritone, Inc. (NASDAQ:VERI)
Number of Hedge Fund Holders: 6
Veritone, Inc. (NASDAQ:VERI) provides artificial intelligence (AI) computing solutions and services. On December 12, the company announced that its longstanding exclusive global licensing agreement with CBS News has been renewed. The multi-year contract strengthens Veritone’s role as a leading content licensing provider for broadcast networks, now including exclusive local news content from CBS-owned stations. CBS News and Stations will continue to utilize Veritone’s aiWARETM enterprise AI platform to enable advanced and precise search and retrieval, helping researchers and creatives to quickly find specific scenes, quotes, or highlights, and automate rights management and delivery.
“We are thrilled to extend our longstanding CBS News partnership. With Veritone’s Content Licensing platform, CBS News and Stations gain continued access to advanced AI solutions to enhance the accessibility of their content and provide exceptional experiences for viewers across digital landscapes. This renewal is a testament to the value we deliver, and we’re excited to drive further innovation and growth in how users can search and identify their content”.
-Jay Bailey, senior vice president of licensing, Veritone.
9. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 17
C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company that builds and operates enterprise-scale AI applications. On December 11, JP Morgan downgraded shares of the company to an “Underweight” rating from “Neutral” and kept the price target unchanged at $28. Analyst Pinjalim Bora said that the downgrade largely comes from the stock’s valuation, which is stretched. Moreover, it noted how the company is pursuing a major AI opportunity but underperforms in growth and margins.
“Given the already rich valuation, which is likely already pricing in a much better growth-plus-profile, which we find difficult to underwrite currently, we expect shares to underperform our coverage for 2025. While we understand that C3.ai is going after a massive and rapidly evolving opportunity around Artificial Intelligence, we think it’s uneven and subpar growth-plus-margin performance leaves a lot to be desired, and it remains a big outlier compared to a broader base of peers trading at over 10x FTM revenue.”
-JP Morgan analyst
8. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. The company is all set to join the Nasdaq 100 index on Monday, December 23. The Nasdaq 100, comprising the 100 largest non-financial sector companies in the Nasdaq Composite Index, undergoes an annual reconstitution in December and is rebalanced quarterly to weight its constituents by market capitalization. Even though listing changes do not change a company’s fundamentals, the addition of Palantir to the Nasdaq 100 may increase demand from exchange-traded funds (ETFs), which are required to adjust their holdings based on index requirements. The move, seemingly made to appeal to retail investors, also reinforces Palantir’s image as a strong force in the AI industry, with the NASDAQ mostly affiliated with the tech sector.
7. Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 47
Elastic N.V. (NYSE:ESTC) is a search artificial intelligence company. It offers cloud-based solutions that enable users to bring in all kinds of unstructured data and quickly make the data searchable. On December 12, the company announced the general availability of Elasticsearch logsdb index mode. With AI advancements enabling easier analysis of text-based data, logs can be the simplest and most crucial signal for diagnosing issues. The Elasticsearch logsdb index mode is an innovation in log management that reduces log data storage by up to 65%. The innovation allows teams to have increased visibility while keeping all data immediately accessible for analysis. Other key benefits include reduced costs, preservation of valuable data, and streamlined data access.
“Logs are critical for detection and remediation, but the growing log volume generated by infrastructure and applications is driving up costs and forcing compromises that hinder analysis. Logsdb index mode reduces the disk footprint and overall cost of storing log data with features including smart index sorting, synthetic source and advanced compression”.
-Ken Exner, chief product officer at Elastic.
6. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 54
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant that specializes in artificial intelligence (AI) and internet services. On December 14, the South China Morning Post reported that China’s Ministry of Industry and Information Technology (MIIT) has announced the establishment of an “artificial intelligence (AI) standardization technology committee”. Comprising executives from tech giants Baidu, Alibaba Group Holding, Tencent Holdings, and Huawei Technologies, the 41-member committee has been formed to make and revise standards for different AI vertical markets, including assessment and testing, data sets, large language models (LLMs), and application development management. The move itself is part of an aspiring three-year plan to lead the nation’s work on setting AI standards and boosting national computing power.
5. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 56
International Business Machines Corporation (NYSE:IBM) is a multinational technology company that offers AI consulting services, software products, and solutions for cloud computing, analytics, and enterprise systems. On December 13, Bank of America Securities analyst Wamsi Mohan maintained a “Buy” rating on International Business Machines and kept the price target at $250.00. IBM’s strategic position in the enterprise AI space has led to the buy rating. The company’s integration with Red Hat’s offerings, such as RHEL AI and OpenShift AI, allows it to deliver cost-effective AI solutions for enterprises. The open-source approach offers a unique value proposition to its customers. The year 2025 is anticipated to be a pivotal year for AI production success given that the infrastructure is already in place for both private and public cloud environments. Additionally, Neural Magic is anticipated to enhance IBM’s capabilities further by enhancing model efficiency and reducing costs.
4. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 64
Hewlett Packard Enterprise Company (NYSE:HPE) is a technology company that provides high-performance computing (HPC) systems, AI software, and data storage solutions. On December 13, it was announced that the company has been commissioned by The Leibniz Supercomputing Center (LRZ) of the Bavarian Academy of Sciences and Humanities to build its next high-performance computer called “Blue Lion”. Scheduled to go live in early 2027 as part of Germany’s national high-performance computing (HPC) infrastructure, the supercomputer will support cutting-edge research in Bavaria as well as outstanding national science projects. The Blue Lion is based on next-generation HPE Cray technology, and works with next-generation NVIDIA accelerators and processors. It is going to be 30 times faster than its predecessor, SuperMUC-NG.
“Supercomputing plays a pivotal role for progress in science and society, as well as for national competitiveness. LRZ’s Blue Lion is another big step to reinforce Germany’s position as a leading region for supercomputing and AI innovation. Blue Lion will significantly advance LRZ’s computing capacity and also position them in a cutting-edge position with next-generation technologies that will set new standards for the future of supercomputing”.
-Heiko Meyer, Executive Vice President and Chief Sales Officer, Hewlett Packard Enterprise.
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that uses advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On December 13, Reuters reported that The Trump transition team wants the incoming administration to drop a car-crash reporting requirement opposed by Elon Musk’s Tesla. The requirement, if dropped, would weaken the government’s ability to investigate and regulate the safety of vehicles that come with automated driving systems.
Tesla is going to benefit the most from the removal of this provision, as the company has reported more than 1,500 crashes to federal safety regulators under the program. This has led to multiple federal investigations. The recommendation to eliminate the rule came from a transition team that was responsible for producing a 100-day strategy for automotive policy. According to the team, the rule is considered a requirement for “excessive” data collection, according to a document reviewed by Reuters.
2. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 123
Adobe Inc. (NASDAQ:ADBE) is a software company that provides digital marketing and media solutions. On December 12, BofA lowered the firm’s price target on Adobe to $605 from $640 and kept a “Buy” rating on the shares. The analyst told investors that Q4 results have been “mixed”. Despite this, there are also “some encouraging leading indicators” for growth heading into next year. The firm also quoted that Q4 “wraps up a year of delayed gratification for AI”. As such, the new target is based on a lower multiple applied to the firm’s calendar year 2026 free cash flow estimate, reflecting the lowered FY25 outlook.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that makes personal computers, mobile devices, and software. Its recent innovation is Apple Intelligence, the company’s AI-driven personal system. On December 11, the company announced that it has released iOS 18.2, iPadOS 18.2, and macOS Sequoia 15.2, bringing Apple Intelligence — to iPhone, iPad, and Mac in the U.K. Software updates issued include localized language support for the U.K. in addition to Australia, New Zealand, and Canada.
Other updates include removing distracting objects from images with Clean Up, exploring creative ways to express visually with Image Playground, creating emojis for any situation with Genmoji, and making the writing even more dynamic with Writing Tools. With advancements in Apple Intelligence, iPhone 16 and iPhone 16 Pro users can use Camera Control to instantly learn more about their surroundings. Moreover, ChatGPT is now integrated with Siri and Writing Tools.
While we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that some 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 AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
