The tech world may be steering in a new direction with the emergence of DeepSeek and the cheaper and more efficient models it promises. In the latest news, bulls from Europe have deemed that the sector may have further to run, despite the emergence of these Chinese copies. This news emerged after January 27, when the tech world witnessed a broad market sell-off driven by DeepSeek’s advancements, investors’ concerns regarding West’s huge investments in chipmakers and data centers, valuation risks, and increasing competition from alternative AI models. In short, DeepSeek sparked a rout in the tech world.
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With the emergence of these models, companies are readjusting their approaches, focusing more on efficiency rather than demand. Even big AI names such as OpenAI have been prompted to rethink their strategies. The AI startup is reportedly thinking of “figuring out a different open-source strategy” after DeepSeek released a lower-cost open-source AI model, Seeking Alpha reported Saturday. Moreover, OpenAI Chief Product Officer Kevin Weil recently unveiled that the company was considering open-sourcing older AI models. This reflects a broader industry shift toward efficiency and accessibility.
Nevertheless, since the sell-off, tech stocks have thankfully rebounded. European markets in particular are hitting new highs, Reuters reports. One economic theory, known as the “Jevons Paradox” seems to be the answer. According to the paradox, when a resource becomes more efficient to use, demand may increase rather than the other way around. This is because the price of using the resource drops.
“I hadn’t discussed it until Monday (last week), and then suddenly it’s everywhere. This paradox highlights one of the uncertainties at the moment,” said Jewell, flagging that a key question for European stock-pickers is whether data centres and their suppliers will be less in demand.”
-Helen Jewell, Chief Investment Officer at BlackRock Fundamental Equities, EMEA, as reported on Reuters.
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.
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10. Alpha Modus Holdings, Inc. (NASDAQ:AMOD)
Number of Hedge Fund Holders: –
Alpha Modus Holdings, Inc. (NASDAQ:AMOD) is a technology company that creates, develops, and licenses data drive technologies. On February 4th, the company announced that its wholly owned subsidiary, Alpha Modus, Corp., had filed a patent infringement lawsuit against Walgreens Co. (“Walgreens”) in the United States District Court for the Eastern District of Texas. The company has alleged that Walgreens has willfully infringed on Alpha Modus’s patented AI-driven retail technology. This technology enhances in-store shopping through data-driven insights, interactive advertising, and consumer engagement tools. The event came to light when Walgreens deployed its Cooler Screens digital smart screens in its stores, which Alpha Modus claims mirror the patented innovations. Alpha Modus has previously taken action against major retailers and technology providers, including Kroger, Cooler Screens, Wakefern, Shelf Nine LLC, and more, reflecting the company’s commitment to protecting its AI technology. The company estimates potential damages exceeding $500 million, stating that they could easily run into billions over the life of its patents.
“We believe our technology is currently being used by scores of brands, retailers and technology providers. Our research demonstrates that, as a result, damages due Alpha Modus far exceed an estimated $500 million and could easily run into the billions over the life of our patents. This lawsuit is a necessary step to protect our intellectual property and uphold fair competition”.
– Alpha Modus CEO William Alessi.
9. Tempus AI, Inc (NASDAQ:TEM)
Number of Hedge Fund Holders: 7
Tempus AI, Inc (NASDAQ:TEM) is a healthcare technology company that provides AI-enabled precision medicine solutions. On February 3rd, the company announced that it had completed its acquisition of Ambry Genetics, a genetic testing company that strives to improve health by understanding the relationship between genetics and disease. The acquisition aims to leverage the powers of technology to expand Tempus AI’s testing capabilities for inherited cancer risk and complement its strategy of using data to advance clinical and scientific innovation. The company has paid $375 million in cash and $225 million in shares at closing. Of this, $100 million is subject to a lock-up agreement until one-year post-transaction close.
“This acquisition complements our strategy of leveraging diagnostics and data to drive innovation, further strengthening our ability to deliver cutting-edge solutions to clinicians, patients, and life sciences companies. We are excited to welcome Ambry to the Tempus team as we work together to improve patient outcomes and transform treatment journeys through the power of technology.”
-Eric Lefkofsky, Founder and CEO of Tempus.
