In this article, we will take a detailed look at the Top 10 Stocks Everyone Is Talking About These Days.
Major AI stocks are wavering as investors assess the impact of decreasing hardware costs and their effects on technology spending. T. Rowe Price’s Tony Wang said in a latest program on CNBC that while Mag. 7 companies are still strong, there are opportunities to look elsewhere as the technology-related gains broaden out.
“You saw the Mag. 7 really dominate the last two years, and I think going into this year, I think that there’s a lot of concern over the capex that’s being spent. I mean, they’re kind of becoming fundamentally different businesses in some respect in terms of the capital intensity. And then on top of that, you had kind of more inline reports, and so when you’re spending a lot of capex and you’re coming in line, I think that tends to set up for a tougher stock reaction. And so, you know, I think there’s other areas in tech that naturally things will broaden out to, like things that have more bottoming fundamentals and can have a little bit easier setup. So I think that, you know, we’re looking for more broadening, and I think that these are still very good companies and still like a core part of tech portfolios, but I think there’s opportunity elsewhere as well.”
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For this article, we picked 10 stocks currently trending on latest news and analyst ratings. With each stock we have mentioned the number of hedge fund investors. 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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10. Tempus AI, Inc (NASDAQ:TEM)
Number of Hedge Funds Investors: 7
Cathie Wood and Ark Invest recently bought 400,000 shares of Tempus AI Inc (NASDAQ:TEM). The stock is up 80% so far this year. The Ark Innovation ETF (NYSEARCA:ARKK) bought 367,388 shares, while the ARK Genomic Revolution ETF (BATS:ARKG) added 78,570 shares.
Baron Discovery Fund stated the following regarding Tempus AI, Inc (NASDAQ:TEM) in its Q3 2024 investor letter:
“Shares of Tempus AI, Inc (NASDAQ:TEM) contributed to performance. Tempus is a cancer diagnostics company that provides genomic testing results. Tempus has also amassed an over 200 petabyte proprietary multimodal dataset that combines clinical patient data with genomic testing data. In addition to using this data to empower more intelligent diagnostics for its own tests, Tempus also licenses this data to biopharmaceutical companies which use it to design smarter clinical trials and identify potential new drug targets. We think this proprietary dataset is unique with meaningful barriers to entry, and brings meaningful value to biopharmaceutical R&D. As we mentioned in the letter from last quarter, shares have been incredibly volatile. We took advantage of this volatility to buy a meaningful position when shares sold off into the low $20’s per share from an IPO price of $37. When shares spiked into the mid-$70’s (likely due to short sellers covering losses as shares rose), we took profits on a meaningful portion of the investment as we believed valuation had become stretched (shares now trade in the high $40’s to low $50’s level). We like our position sizing now, and would add to the position at lower valuations. We believe that Tempus has significant growth ahead of it and we are excited about its unique business model.”
9. Ford Motor Company (NYSE:F)
Number of Hedge Funds Investors: 36
A caller recently asked Jim Cramer about Ford Motor Company (NYSE:F). Cramer advised the investor to stay away from the stock.
“Ford, no, you don’t want to own. I feel terrible about saying that. I have a Ford, but it’s not where you want to be. You got to be in a place where you feel confident that the earnings are going to go up or the sales are going up, and I don’t feel that way with Ford. I’m sorry.”
8. Oracle Corporation (NYSE:ORCL)
Number of Hedge Funds Investors: 91
Dan Niles from Niles Investment Management analyzed Oracle Corp’s (NYSE:ORCL) capEx outlook in a latest program on CNBC to prove his thesis that AI spending is expected to slow down, impacting chipmakers like Nvidia.
“I’ve written about this multiple times. Look at Oracle. If you look at Oracle, Oracle came out and said for their next fiscal year they’re going to go ahead and double capex. So you look at that, you get incredibly excited when you don’t do any of the math. When you do the math, you go, “Okay, well, their fiscal year ends in May. This implies 13.7 billion in capex. You already had six months go by, so that leaves 7.5 billion left to spend.” In the most recent quarter, they spent 4 billion, so 4 billion doubled is 8 billion. That’s not seven and a half, right? So their sequential growth is actually going to go down in AI capex. But you look at the headlines and you go, “Oh, capex is doubling. That’s fantastic.” That’s the problem with a lot of the analysis you’re seeing. People aren’t actually going through and doing the math, what it means sequentially much.”
Parnassus Value Equity Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q3 2024 investor letter:
“Oracle Corporation (NYSE:ORCL) announced second-quarter results that exceeded consensus expectations, driven by growth in its cloud infrastructure business, which is benefiting from demand for AI applications. Investor sentiment was further bolstered by the company’s announcement of a new partnership with Amazon.”
7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Funds Investors: 99
Ross Gerber, Co-Founder, President and CEO of Gerber Kawasaki Wealth and Investment Management, said the following about Tesla in a latest media appearance:
We still have a ton of Tesla Inc (NASDAQ:TSLA), so I don’t wish anything negative on the company. In fact, I’d argue the “opposite—I love Tesla. The problem is Elon Musk. We all know what the issue is. People can debate other factors, but on the surface, you’d think Tesla would be doing well. However, nobody wants to buy their cars, people are protesting, and Elon has become one of the most hated people in the world. That’s not good for selling vehicles.”
Analysts are still trying to look beyond Elon Musk’s claims and find out the specifics on the company’s EV and robo-taxi plans.
Tesla Inc’s (NASDAQ:TSLA) product lineup is showing signs of stagnation, with over 95% of sales still coming from the Model 3 and Model Y. Meanwhile, competitors are rolling out more advanced models. According to Reuters, Tesla’s market share in Europe is slipping as legacy automakers like BMW post stronger sales. Chinese competitor BYD is also gaining ground in Europe, despite talk of tariffs.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”
6. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Funds Investors: 115
Benchmark recently added Alibaba to its Best Ideas list. The firm expects Alibaba Group Holding Limited (NYSE:BABA) shares to see a structural rerating in 2025 as its core businesses strengthen. They see e-commerce growth picking up, helped by better take rates, and anticipate AIDC reaching profitability in FY26.
Benchmark believes Alibaba Group Holding (NYSE:BABA) will benefit from the broader AI adoption in China, driven by DeepSeek’s rise.
“We see BABA as a leading China AI play and recommend it as a top pick for 2025,” Benchmark said. “We firmly believe that full-stack service providers with robust infrastructure capabilities will be the primary beneficiaries of China’s growing AI adoption. BABA stands out due to its competitive advantages in cloud infrastructure, proprietary models, application versatility across various use cases, and flexible edge device capabilities.”
“As China’s largest cloud service provider, AliCloud offers extensive support in computing resources and technical collaboration, along with its unmatched consumer behavior data (such as transaction and payment information), making it highly attractive to large-scale edge device OEMs. Apple’s partnership with BABA could provide a significant boost, enabling BABA to leap ahead in the AI cloud competition,” they added.
The firm set a $160 price target on Alibaba Group Holding (NYSE:BABA).
Baron Emerging Markets Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q4 2024 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) is the largest retailer and e-commerce company in China. Alibaba operates shopping platforms Taobao and Tmall as well as businesses in logistics, local services, digital media, and cloud. Shares fell on continued weakness in core domestic commerce growth. Quarterly results were roughly in line with expectations, with relative strength in profitability, but the timing for acceleration in core gross merchandise value is still unclear. We retain conviction that Alibaba is well positioned to benefit from China’s ongoing growth in online commerce and cloud in China, though competitive market concerns remain.”
5. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Funds Investors: 136
Jim Cramer in a latest program on CNBC recommended investors to gradually buy Uber Technologies Inc (NYSE:UBER) and called those selling the stock after the company’s latest earnings as “morons.”
“I like Uber very much now. I was there when they reported, and it was incredible. The stock went down, and I called out the people who were selling it as morons. Now, like, I think it can look— I mean, it’s a 74, could go back to 68, absolutely. So, Bill, here’s what we’re going to do: we’re going to buy a little bit tomorrow, and then if it goes to 68, we’ll buy a little bit more. Okay, that’s the game plan.”
Ariel Appreciation Fund stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its Q4 2024 investor letter:
“During the quarter, we initiated three new investments, each in companies we have followed closely for a considerable time. At various points, we viewed them as missed opportunities; however, our experience with Mr. Market has taught us that patience often creates inevitable entry points. This quarter, some exciting opportunities presented themselves. The three investments are Amazon (NASDAQ: AMZN), Diageo (NYSE:DEO), and Uber Technologies, Inc. (NYSE:UBER). We will discuss each in detail below
At the halfway point of the year, Uber was one of the top-performing stocks in the S&P, and we couldn’t help but kick ourselves for having spent considerable time researching the company—demonstrating gen[1]uine interest—only to never invest a dime. By year-end, however, Uber’s stock had not only surrendered all its gains but had fallen even further. So, what changed? Hype, plain and simple. Specifically, hype surrounding fully autonomous vehicles (AVs).
While we are excited by the advancements toward full autonomy and have friends who rave about their experiences with Waymo, the narrative (there’s that word again!) surrounding the inevitability of AVs has become so pervasive that it’s taken on a life of its own in markets…” (Click here to read the full text)
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Funds Investors: 158
Jim Cramer in a latest program on CNBC talked about the impact of DeepSeek on top AI stocks in the US. Cramer said major US tech companies spent billions of dollars on Nvidia chips but the DeepSeek breakthrough potentially proved that high-performance AI systems could be built using affordable chips. He said Apple Inc (NASDAQ:AAPL) is the only company that did not spend a fortune to buy AI chips, which saves it from the potential negative impact of the Chinese technology.
“Apple’s the only one that hasn’t spent fortunes paying Nvidia for the life blood of the AI platform. They always figured they could just license the technology from somebody else, given their massive user base. Yes, Apple didn’t have to spend tens of billions of dollars on these warehouses full of servers, so its stock hangs in there, irrespective of potential tariffs from Chinese components, which seem to also include Taiwanese components. It looks like if the punitive government of China goes after them, well, anyway, President Trump has so far been okay, and he has not hurt them.”
Apple’s latest quarterly results were helped by Services revenue in the latest quarter, but the key challenges haunting the company remain as they were. Many analysts believe just a few AI apps would not be enough to trigger a broader upgrade cycle for iPhone. Apple is dealing with currency headwinds as the stronger US dollar is expected to reduce top-line growth by 2.5% next quarter. For Q2 FY2025, management expects overall revenue to grow in the low to mid-single digits. Apple’s stock is trading at a premium valuation, with a price-to-earnings ratio of 39-40x, a price-to-free-cash-flow ratio of 33-34x, and a PEG ratio exceeding 3x. Upcoming quarters would be difficult for Apple and its current valuation is not justified.
Tsai Capital stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.
The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.
Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.
Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Funds Investors: 193
Jim Cramer in a recent program on CNBC said NVIDIA Corp (NASDAQ:NVDA) has become the “odd man” among the Mag. 7 group amid the dependence of many other companies on it and several other vulnerabilities.
“It’s not really Apple or Microsoft or Amazon or Alphabet or Meta or Tesla. It’s the odd man out of the Magnificent 7: it’s Nvidia, the most important stock in this entire stock market. Nvidia holds the key to countless tech companies. Plus, Nvidia now might be hurt by the president of the United States, who wants to tighten Chinese export controls further. The most exposed group might be semiconductor capital, with Nvidia being the most visible potential casualty. Some are going so far as to say that Nvidia holds the key to the fortunes of big momentum stocks like Paler, Apple, IT service now, and even Bitcoin. Can you imagine?”
The market will keep punishing Nvidia for not coming up to its gigantic (and sometimes unrealistic) growth expectations. About 50% of the company’s revenue comes from large cloud providers, which are rethinking their plans amid the DeepSeek launch and looking for low-cost chips. Nvidia’s Q1 guidance shows a 9.4% QoQ revenue growth, down from the previous 12% QoQ growth. Its adjusted margin is expected to be down substantially as well to 71%. The market does not like when Nvidia fails to post a strong quarterly beat. The stock will remain under pressure in the coming quarters when the company will report unimpressive growth.
Nvidia is facing challenges at several levels. Competition is one of them. Major competitors like Apple, Qualcomm, and AMD are vying for TSMC’s 3nm capacity, which could limit Nvidia’s access to these chips. Why? Because Nvidia also uses TSMC’s 3nm process nodes. Nvidia is also facing direct competition from other giants that are deciding to make their own chips. Amazon, with its Trainium2 AI chips, offers alternatives. Trainium2 chips could provide cost savings and superior computational power, which could shift AI workloads away from Nvidia’s offerings. Apple is reportedly working with Broadcom to develop an AI server processor. Intel is also trying hard to get back into the game with Jaguar Shores GPU process, set to be produced on its 18A or 14A node.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Funds Investors: 279
Dan Niles of Niles Investment Management believes CapEx spending on Nvidia chips will slow down based on Microsoft Corp’s (NASDAQ:MSFT) outlook. Talking in a latest program on CNBC, Niles cited Microsoft’s latest statement:
“I look at what the biggest spender of AI capex is saying, which is Microsoft. One of the things that’s driving the market down today is IR from Microsoft in Australia, and they’re sort of clarifying some of the notes that came out on Friday. They’re saying, “Right, you know, we think supply and demand are going to be in balance by the end of our fiscal year, which, by the way, is June, so it’s not that far away, and we think our capex growth is going to slow to more in line with our revenue growth.” Well, capex growth is running 50 to 60%, while revenue growth is running in the mid-teens. So you look at that, and you go, “Okay, well that pretty much confirms the fact that capex is going to slow down.” So for the Nvidia print, it’s more interesting to just see what they have to say. Jensen looks out 10 years in.”
Mairs & Power Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.
A perfect example is Microsoft Corporation (NASDAQ:MSFT), which has grown to become the largest holding in the Growth Fund. Microsoft has a near monopoly on the office software productivity market with its Microsoft Office Suite. The company’s Azure platform is a leader in cloud computing and has been steadily gaining share. Thanks to its Office and Azure products, the company is deeply embedded within many enterprise IT ecosystems. Therefore, it should be well-positioned to expand its presence within its customer base, as it rolls out premium-price AI solutions. The company is not resting on its laurels and plans on spending an astounding $80 billion in 2025 to build out AI data centers.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Funds Investors: 286
Joshua Ketter from Spreetail recently said while talking to Schwab Network that Amazon.com Inc (NASDAQ:AMZN) smart home devices are still not up to consumer expectations and it will take time for the company to catch up.
“Amazon, to a certain extent, they’re kind of a victim of their own success. They’ve set a very high bar and have very high expectations with consumers, and I personally believe that they’re not going to quite get there with this release. I think over the course of time they’ll get there. They really do have a right to win in this space, though. To your point, I have over 50 devices in my house—Amazon Alexa connects all of those, but it doesn’t do a good job at understanding which ones I actually wanted to turn on or off unless I’ve named it just right. And so that kind of nuance in language is really important, and you see that ChatGPT has made tremendous strides in that area. However, if I look at some of Amazon’s own current AI models, they’re not quite there. They’re about a year behind, and so I do think they’ll get there eventually, but if they’re using their current AI capabilities, I do think it’s going to be limited. And again, I think the challenge is going to be the consumer is going to have the expectations that this is another kind of Tony Stark Jarvis-type thing or a Star Trek Central Computer, and that they’ll be able to do anything, right? And the moment you start asking questions and it fails, I think it can be challenging for Amazon to meet consumers’ expectations.”
Despite weak guidance, Amazon could easily surpass $100 billion in operating income within the next two years because of its AWS growth engine. In the latest quarter, Amazon Web Services sales jumped 19% and operating profit for the segment jumped 62% in 2024 on an annual basis.
The market is currently forecasting $6.27 per share in profits this year (a 13% YoY growth) and $7.59 per share next year (a 21% YoY growth). Amazon’s stock is priced at a profit multiple of 30.2x. This valuation might look rich, but when we incorporate AWS growth, the stock seems to have more upside potential.
Mar Vista Global Quality Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc.’s (NASDAQ:AMZN) profitability was the key highlight of the third quarter financial results, with AWS and International Retail achieving record operating margins, and North America Retail posting its second-best margin in five years. Even more impressive was the fourth quarter operating income forecast, projecting up to $20 billion, significantly exceeding the expected $16 billion and suggesting a record 11% margin. This exceptional performance was driven by economies of scale, logistics efficiencies, successful AI implementations, increasing ad revenue, and accelerated AWS growth.
We keep our investment in Amazon due to several factors: AWS growth has further potential, Amazon Prime Video monetization is in its initial stages, and the company is expanding into promising sectors like Pharmacy and Logistics. Furthermore, with strengthening profitability and cash reserves exceeding $100 billion, the possibility of substantial capital returns increases. By continuing to innovate and invest in technologies like AI and cloud computing, Amazon is well-positioned to keep its competitive edge.”
While we acknowledge the potential of Amazon.com Inc (NASDAQ:AMZN), our conviction lies in the belief that under the radar 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 AMZN 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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