The US supremacy in artificial intelligence is at risk more than ever. That’s the harsh reality in the aftermath of Chinese intelligence startup DeepSeek unveiling low-cost AI models. Concerns that China is slowly beating the US come as a surprise, given that the two nations have been entangled in a fierce battle in the AI race.
The US has been the most aggressive in derailing China’s AI ambitions. Washington has already passed and implemented stringent regulations prohibiting US companies from trading, let alone selling advanced chips and equipment that would accelerate China’s AI development.
“[DeepSeek’s] algorithmic innovations remind us that China and the US are neck and neck and that our technological edge isn’t guaranteed, pushing our industry to make AI more efficient,” says Eric Schmidt, the former chief executive and chair of Google. “To get to AGI first, we’ll need to continue to invest in talent, support our vibrant open-source ecosystem, and ensure we out-innovate, not just outspend, our competitors.”
The innovation from DeepSeek has two ramifications for the technology sector. First of all, like ChatGPT in 2022, it is likely to hasten AI’s commercial development and adoption. By appearing to demonstrate that creating sophisticated AI models does not necessitate enormous amounts of infrastructure and, consequently, capital, it also poses a threat to shatter the investment tenets that have supported the US stock market as a whole.
Even as China and the US battle it out in the artificial arms race, other superpowers are also putting their house in order as they look to tap the massive opportunities around AI. India is one country that has also set sights on revolutionary technology that has the potential to impact various industries, from healthcare to defense, cybersecurity and the auto industry.
India has already engaged OpenAI, which looks to be at the forefront of creating a full AI stack.
“Had a super cool discussion with @same on our strategy of creating the entire AI stack – GPUs, model, and apps. Willing to collaborate with India on all three,” Union Electronics and IT Minister Ashwini Vaishnaw posted on X.
India’s Finance Minister Nirmala Sitharaman has already approved the establishment of three Centers of Excellence (Coe’s) in AI for education. With a Rs. 500 crore budget, the project intends to advance AI research and its application in the nation’s educational system. As India seeks to increase its competitiveness in the field of artificial intelligence, the new AI Centers of Excellence will focus on cutting-edge research and the creation of AI learning resources.
Within six months, the nation is also anticipated to introduce its own reasonably priced, safe, and indigenous AI model. The India AI mission is now closer to adapting native AI solutions for the domestic context using Indian languages, supported by a state-of-the-art shared computing facility.
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10. BlackSky Technology Inc. (NYSE:BKSY)
Number of Hedge Fund Holders: 7
BlackSky Technology Inc. (NYSE:BKSY) is a technology company that provides geospatial intelligence, imagery and related data analytic products and services. On February 5th, the company confirmed signing a multi-year contract with geospatial intelligence fusion specialist Emerging Dynamics. The agreement paves the way for the company to provide satellite imagery services for defense clients worldwide.
BlackSky Technology Inc. (NYSE:BKSY) achieves near-hourly satellite revisit rates by combining extensive AI-driven automation with deliberate constellation design. Its BlackSky Spectra tasking and analytics platform delivers time-sensitive imagery and analytical output. The combined services of BlackSky and EMDYN will combine terrestrial and space data for on-demand insights at scale. Thanks to the special AI-driven services, the entire tasking-to-dissemination process will experience a reduction in end-to-end latency.
9. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 26
Lumen Technologies, Inc. (NYSE:LUMN) is a telecom services company that offers telecommunications networks and cloud services. The company delivered better-than-expected fourth-quarter results on February 5, driven by strong demand for data centres amid the AI boom. It logged $3.33 billion in revenues against $3.2 billion expected, with earnings per share of 9 cents versus 5 cents expected.
The better-than-expected results come on Lumen emerging as one of the biggest beneficiaries amid increased investments in data centres needed to support AI applications. Lumen Technologies, Inc. (NYSE:LUMN) has already inked deals worth over $8 billion with cloud giants, including Google, Microsoft, Amazon Web Services and Meta Platforms for its networking solutions.
8. Dynatrace Inc. (NYSE:DT)
Number of Hedge Fund Holders: 45
Dynatrace Inc. (NYSE:DT) is a technology company that provides a security platform for multi-cloud environments called Dynatrace. On February 4th, the company confirmed it is launching a new set of AI-powered features that will make it easier to troubleshoot software and fix cybersecurity issues.
Dynatrace Inc.’s (NYSE:DT) observability platform, which assists businesses in identifying outages, performance problems, and hacker activity in their infrastructure, is getting new features. They will be accompanied by Davis, an AI assistant who will make tasks like determining the reason behind server failures easier. The company expects the AI assistant to offer summaries of natural language problems and recommend specific remediation steps.
7. Axon Enterprise Inc. (NASDAQ:AXON)
Number of Hedge Fund Holders: 46
Axon Enterprise Inc. (NASDAQ:AXON) develops, manufactures, and sells conducted energy devices (CEDs) under the TASER brand. The company has been on a growth trajectory owing to its expanding product portfolio and increased focus on artificial intelligence and software solutions. Likewise, on February 4th, Trevor Walsh of JMP Securities reiterated that the stock is a buy and increased the price target to $725 from $610.
While the TASER and body cameras segment has been the main driver of underlying growth, AI initiatives are also starting to elicit significant interest on Wall Street. Axon Enterprise Inc. (NASDAQ:AXON) is increasingly leveraging artificial intelligence to develop law enforcement solutions that make public safety faster, smarter, and more effective. Analysts are projecting a $1.8 billion opportunity in annual recurring revenue as the company empowers officers and safeguards communities with real-world AI-powered solutions. This move towards software and AI integration influences Axon’s long-term growth strategy and capacity to sustain rapid revenue growth rates.
6. Okta, Inc. (NASDAQ:OKTA)
Number of Hedge Fund Holders: 47
Okta Inc. (NASDAQ:OKTA) is a software infrastructure company offering products and services to manage and secure identities. It provides a Single Sign-On that enables users to access applications in the cloud or on-premises from various devices. The company has been integrating AI-driven features into a suite of customer identity solutions to strengthen its competitive edge.
Likewise, on February 5th, Needham analyst Mike Cikos took note of the company’s growth metrics amid the AI integration. The analyst reiterated a buy rating on the stock with a $115 price target. Okta Inc. (NASDAQ:OKTA) has emerged as a key player in the security sector owing to its identity governance and privileged access management products. Its Customer Identity and Access Management division could see accelerated growth amid growing concerns that generative AI could result in more sophisticated phishing attacks.
5. CyberArk Software Ltd. (NASDAQ:CYBR)
Number of Hedge Fund Holders: 51
CyberArk Software Ltd. (NASDAQ:CYBR) is a technology company that develops, markets, and sells software-based identity security solutions and services. On February 4th, the company confirmed the inking of a strategic partnership with SentinelOne. The two are coming together to enhance the use of AI-powered cybersecurity platforms to protect against misuse of privileged access.
The integration brings together CyberArk identity data and SentinelOne Singularity for AI SIEM and XDR. A merger of the two platforms will result in robust endpoint detection and response capabilities capable of accelerating threat detection and response through AI-enhanced security analytics. It should also provide customers with more context and correlation for threat hunting, investigations, automation, and detection and response.
4. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 78
ServiceNow, Inc. (NYSE:NOW) is a technology company that offers end-to-end intelligent workflow automation platform solutions for digital businesses. The company has received a significant endorsement just days after reaching an agreement to further acquire Cuein to strengthen its artificial intelligence agents. On February 5th, non-banking financial company Poonawalla Fincorp said it’s tapping its AI-powered solutions and tools to enhance audit and governance.
By integrating ServiceNow, Inc.’s (NYSE:NOW) AI solutions, Poonawalla Fincorp hopes to strengthen its risk management framework and streamline audit processes and outcomes. The integration should also enhance efficiency, automation, and operations compliance. ServiceNow AI solutions have proved to be highly effective in analyzing large data sets and generating content that aligns with existing patterns.
3. Eaton Corporation plc (NYSE:ETN)
Number of Hedge Fund Holders: 90
Eaton Corporation plc (NYSE:ETN) is a Specialty Industrial Machinery company that offers electrical, aerospace, vehicle, and eMobility solutions. RBC Capital Markets analysts reiterated that the stock was a buy on February 3rd but cut the price target to $405 from $407. The Buy rating comes on the heels of growing expectations that an artificial intelligence-related data center boom will trigger significant demand for electrical equipment.
Likewise, Eaton Corporation plc (NYSE:ETN) is expected to be one of the biggest beneficiaries as a key supplier of electrical components, industrial components, power distribution and assemblies. A few years back, Eaton electrical equipment was just another equipment for a utility, office building, or warehouse. That has since changed as its equipment has become an essential puzzle amid the explosive growth of data centres needed to power the AI revolution. While the company has added over $100 billion in market value since 2019, most of it has come over the past two years from the company benefiting from the AI boom.
2. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 123
Adobe Inc. (NASDAQ:ADBE) is a software infrastructure company integrating AI features into software solutions to enhance how people and businesses create, publish, and promote content. Likewise, its efforts have received a significant boost on Dentsu, confirming on February 3rd that it will integrate its generative AI offerings into its agency network as new offerings.
Adobe GenStudio dentsu+ is the new offering that combines Adobe GenStudio, a content supply chain solution, with Dentsu’s data and identity platform Merkury. The integration will offer a way for marketers to target millions of people as part of their marketing campaigns. With greater efficiency, marketers will also reach and engage with their target markets at a personalized level and at scale. Likewise, brands will no longer have disparate systems and data as all can be done in one place with integration.
1. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 136
Uber Technologies, Inc. (NYSE:UBER) is a multinational transportation company that offers ride-hailing services, courier services, food delivery, and freight services. Likewise, the company has been investing in artificial intelligence to enhance the user experience of its applications and technology. Similarly, Needham analyst Bernie McTernan reiterated a Buy rating on the stock with a $90 price target on February 6.
Uber Technologies, Inc. (NYSE:UBER) is increasingly leveraging AI to strengthen its autonomous vehicles and rider safety. Early this year, it inked a strategic partnership with Nvidia to speed up the integration of AI technology into self-driving cars. The ride-sharing giant plans to use the Chip giant’s Cosmos platform and DGX cloud to build strong AI models.
While we acknowledge the potential of Uber Technologies, Inc. (NYSE:UBER) 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 timeframe. If you are looking for an AI stock that is more promising than UBER 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 was originally published at Insider Monkey.
