Generative artificial intelligence is the technology that promises to revolutionize the financial services sector in ways not seen in years. From altering the way institutions operate to enhancing service delivery, the technology is also making it easy to make decisions that generate long-term value. Nevertheless, its most significant impact is enhancing the analysis of vast amounts of structured and unstructured data, therefore aiding in generating meaningful insights.
The technology is also being relied upon to enhance fraud detection, given its ability to simulate potential attack scenarios and provide solutions to avert them. Generative artificial intelligence also makes it easy for financial institutions to identify vulnerabilities and strengthen defenses. Its use is also transforming various facets of financial services, including credit management, banking operations, and customer service. Significant expansion and operational change are also anticipated.
Likewise, the global market for generative artificial intelligence in financial services is expected to reach record highs of $18.9 billion by 2030. That’s because it is growing at a compound annual growth rate of 38.7%, according to research findings by Research and Markets.
A mix of technological innovations, operational necessities, and evolving customer demands propels the rapid integration of generative AI in the financial services sector. A significant factor contributing to this trend is the growing intricacy of financial markets, necessitating advanced tools to analyze and produce actionable insights from extensive data sets.
“The financial services industry has moved beyond innovation pilots to real-world implementation in 2024-25,” said Pratik Shah, Partner and National Leader – Financial Services, EY India. “Firms are integrating GenAI with core banking systems, including CRM, loan origination, and card management platforms.”
Similarly, the growing demand for personalized financial offerings, such as tailored investment strategies and flexible loan options, is also fuelling the integration of generative AI solutions. Additionally, pressures related to regulatory compliance have further expedited the integration of AI, as companies strive to automate and improve the precision of their compliance processes to adhere to strict legal requirements.
Moreover, the fusion of AI with blockchain and quantum computing technologies is opening avenues for new applications in areas like secure international transactions and quantum-resistant financial modelling. Shifts in consumer behaviour, such as the desire for immediate financial interactions and self-service capabilities, are motivating financial institutions to implement generative AI solutions to fulfil these expectations.
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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.
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10. TELUS Corporation (NYSE:TU)
Number of Hedge Fund Holders: 13
TELUS Corporation (NYSE:TU) is a telecom services company that provides a range of telecommunications and information technology products and services in Canada. On March 18, the company inked a strategic collaboration with Nvidia to develop Canada’s first Sovereign AI factory. The proposed AI factory will enhance the development of AI technologies, increase productivity, and protect data.
The Sovereign AI Factory will use TELUS’ high-speed, ultra-low-latency, fibre-optic network and sustainable data centres to provide AI as a Service (AIaaS). The super secure facility will come equipped with Nvidia’s latest generation AI semiconductors to give Canadian businesses and researchers access to cutting-edge technology. TELUS Corporation (NYSE:TU) also plans to expand operations at its facility in British Columbia and install NVIDIA’s most recent generation of industry-leading graphics processing units (GPUs).
“Canada has made AI a national priority, investing in talent, research and commercialization. The TELUS Sovereign AI Factory now provides the infrastructure for this innovation to scale, empowering Canadian businesses, startups and researchers with access to cutting-edge AI infrastructure to turn their bold ideas into real-world breakthroughs — and now, they don’t have to look beyond our borders to get it,” said Hesham Fahmy, Chief Information Officer at TELUS.
9. Lucid Group Inc. (NASDAQ:LCID)
Number of Hedge Fund Holders: 24
Lucid Group Inc. (NASDAQ:LCID) manufactures luxury electric vehicles (EV). It also designs and develops proprietary software in-house for lucid vehicles. The company remains focused on developing software-defined vehicle (SDV) architecture as it pursues growth opportunities amid the growing trend of AI-enabled autonomy in the automotive sector.
Under the new leadership, Lucid Group Inc. (NASDAQ:LCID) is looking into strategic alliances and AI integration prospects that could expand its influence in the EV and AI industries. On March 18, Morgan Stanley upgraded the stock to an Equal Weight from Underweight with a $3 price target. The upgrade comes amid expectations that Lucid can re-rate under the new leadership that is increasingly pursuing an artificial intelligence strategy.
8. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 25
C3.ai, Inc. (NYSE:AI) is a software company that provides a platform and applications for building, deploying, and operating AI applications. The company inked a strategic alliance on March 18 with professional services company PwC, to enhance the deployment of AI-powered business transformation at scale.
The strategic partnership paves the way for the merger of C3.ai Enterprise AI application software with PwC’s deep domain expertise and advisory services. PwC’s strategy and consulting skills combined with C3.ai, Inc.’s (NYSE:AI) AI-powered solutions should give businesses access to an end-to-end AI ecosystem that boosts resilience, speeds up growth, and ushers in a time when AI is not only reactive but genuinely autonomous and proactive. Businesses can achieve previously unheard-of levels of efficiency and innovation by integrating proactive learning and autonomous decision-making into AI applications.
“As organizations at every level face growing challenges in operational efficiency, regulatory compliance, and sustainability, AI has become a critical enabler of digital transformation. This alliance will deliver AI-powered solutions tailored to the specific needs of our clients, helping them navigate complex business environments with confidence and agility.”
7. NetApp, Inc. (NASDAQ:NTAP)
Number of Hedge Fund Holders: 41
NetApp, Inc. (NASDAQ:NTAP) is a technology company that provides solutions for storing, managing, protecting, and archiving business data. It also provides data management solutions to accelerate AI workloads while also offering tools and infrastructure for efficient data collection. On March 18, it announced it is collaborating with Nvidia to make it easy for businesses to leverage data to fuel artificial intelligence reasoning inference.
Consequently, NetApp, Inc. (NASDAQ:NTAP) is advancing its agentic AI with an intelligent data infrastructure that leverages the NVIDIA AI Data platform. NetApp ONTAP® and the NVIDIA AI Data Platform will help companies navigate the AI era more effectively by creating distributed systems that fully utilize corporate data to support data-driven decisions. At every step of the AI process, companies will be able to function under a single vision that combines automation, metadata cataloguing, and hybrid cloud capabilities to break down silos and provide valuable insights.
6. SentinelOne Inc. (NYSE:S)
Number of Hedge Fund Holders: 46
SentinelOne Inc. (NYSE:S) is a cybersecurity company that leverages artificial intelligence to protect organizations from threats. It also offers endpoint protection, threat hunting, and automated remediation capabilities. On March 19, the company enhanced its strategic collaboration with High Wire Networks to redefine cybersecurity for Managed Service Providers (MSPs).
The two companies are joining forces to enhance cybersecurity solutions focused on hyper automation and AI-driven security. The focus is on redefining cybersecurity by integrating hyper automation and AI-driven security into the High Wire Network’s platform. SentinelOne Inc. (NYSE:S) will incorporate AI-powered threat detection automated responses and hyper-automation solutions to eliminate inefficiencies and enhance security outcomes.
“SentinelOne recognizes Overwatch is more than just a cybersecurity provider—we are an enabler of success for our partners,” said Ed Vasko, CEO of Overwatch. “As such, they want to partner with us to increase our revenue growth across their expanding portfolio. Because AI and automation are the foundation of a more innovative, efficient security ecosystem, we can scale revenue faster, keep costs flat, and provide better security.
5. Unity Software Inc. (NYSE:U)
Number of Hedge Fund Holders: 48
Unity Software Inc. (NYSE:U) is a technology company that operates a platform to create and grow games and interactive experiences for mobile phones, PCs, consoles, among other devices. The company is also integrating AI into its real-time 3D development platform to empower creators with tools like Unity Muse. On March 19, it announced plans to strengthen its product line with three Unity 6 Updates.
With the first Unity 6.1 expected in April, Unity plans enhanced performance & stability, expanded platform support and new AI-powered workflows in the platform. Other updates later in the year should make it easy for developers to leverage AI-driven workflows to build games much faster and more efficiently. Unity Software Inc. (NYSE:U) also plans to integrate agentic tools into the Editor to accelerate workflows.
“We don’t want developers to have to choose between stability and new features, or between fidelity and ubiquity. We are committed to delivering it all,” said Matt Bromberg, CEO and President of Unity. “Pressure testing new releases in production environments with our partners is enabling much higher quality builds.”
4. Zscaler, Inc. (NASDAQ:ZS)
Number of Hedge Fund Holders: 52
Zscaler, Inc. (NASDAQ:ZS) is a cloud security company that provides cybersecurity solutions, focusing on a Zero Trust approach, to help businesses secure their digital transformation by protecting users, devices, and applications. It also utilizes AI to enhance its cloud security platform while offering data protection and security automation solutions, including AI-powered data discovery. The company released its ThreatLabz 2025 AI Security Report, which showed a 3,000% increase in AI/ML tool usage on March 20.
The report showed businesses are under immense pressure to block 59.9% of AI/ML transactions because of security concerns, and that 3,624 TB of data is being transferred to AI tools overall. Study findings echoed the need for Zscaler, Inc.’s (NASDAQ:ZS) Zero Trust security measures as a first line of defence to counter AI-powered cyber threats by highlighting new risks posed by agentic AI. By shielding IP addresses and apps from hackers, scanning all traffic for dangers, and making sure users only access approved apps, its solutions lessen the impact of AI-powered threats.
“Data is the gold for AI innovation, but it must be handled securely. The Zscaler Zero Trust Exchange platform, powered by AI with over 500 trillion daily signals, provides real-time insights into threats, data, and access patterns—ensuring organizations can harness AI’s transformative capabilities while mitigating its risks. Zero Trust Everywhere is the key to staying ahead in the rapidly evolving threat landscape as cybercriminals look to leverage AI in scaling their attacks, said Deepen Desai, Chief Security Officer at Zscaler.
3. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 66
Hewlett Packard Enterprise Company (NYSE:HPE) is a technology company that provides IT products, solutions, and services for businesses. It focuses on helping organizations connect, protect, analyze, and act on their data and applications. It also innovates across networking, hybrid cloud, and AI to help customers develop new business models. The company unveiled a new data layer for artificial intelligence on March 19 to strengthen its strategic collaboration with Nvidia.
The unified data layer has significant enhancements across the enterprise data storage portfolio. By combining Hewlett Packard Enterprise Company’s (NYSE:HPE) high-performance data fabric, industry-leading enterprise storage, and advanced data intelligence, the new unified data layer unifies both structured and unstructured data, accelerating the AI data lifecycle. Businesses will be able to intelligently input AI-ready data into their AI applications, models, and agents once the new NVIDIA AI Data Platform is implemented.
2. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 83
Datadog, Inc. (NASDAQ:DDOG) is a technology company that provides an observability platform, offering monitoring and security services for cloud-scale applications. It also uses AI and machine learning to enhance its monitoring and analytics platform, offering features like AI-driven alerting, root cause analysis, and generative AI capabilities. Analysts at DA Davidson reiterated a Buy rating on the stock on March 17 and a $165 price target.
The bullish stance comes amid growing expectations that Datadog, Inc. (NASDAQ:DDOG) is well-positioned to benefit from the shift from AI hardware to AI software infrastructure. According to DA Davidson, the company’s financials could be significantly boosted due to growing platform usage, continuous cloud migrations, and the advantages of generative AI technology. Datadog is positioned to benefit from these changes in the technology landscape as businesses continue to use AI technologies and move to cloud-based solutions.
1. Oracle Corp (NYSE:ORCL)
Number of Hedge Fund Holders: 105
Oracle Corp (NYSE:ORCL) is a software infrastructure company that offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software is a service offering that includes various cloud software applications. It also integrates AI into its cloud services and applications, offering both pre-built and customizable AI models, including generative AI. The company’s customer base received a significant boost on March 18 when Singapore’s Defence Science and Technology Agency (DSTA) selected it for cloud offerings.
The company has since signed an Oracle Cloud Isolated Region agreement with the Ministry of Defence (MINDEF) and Singapore Armed Forces (SAF). The deal paves the way for the company to provide high-performance, air-gapped, and secure sovereign cloud computing solutions. Singapore’s Defense Science and Technology Agency will also access data management and artificial intelligence services in a safe environment.
“The demand for secure and scalable cloud solutions is growing. It is more than just data storage and computing—it will be the foundation for a lot of innovation. Through this pilot collaboration with Oracle, we will harness advanced cloud and AI technologies to digitalize and transform our operations,” said Mr Ng Chad-Son, Chief Executive of DSTA.
While we acknowledge the potential of Oracle Corp (NYSE:ORCL) 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. If you are looking for an AI stock that is more promising than ORCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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