The S&P 500 neared record highs on February 14th despite a busy week of US tariff hikes, inflation updates, a slump in retail data, and mixed reports from company earnings reports. Meanwhile, some magnificent seven stocks inched higher today due to optimism around growing AI-chip demand.
Furthermore, the global AI race is heating up as DeepSeek AI is empowering Chinese chipmakers to lower reliance on US technology as export limits remain in place.
In turn, the US is swiftly building partnerships with Asian countries founded on AI. The US and India announced on February 13th that they would work to create a roadmap by year-end to accelerate the development of AI infrastructure by boosting investments in new-age data centers and offering US-origin AI infrastructure to expand computing power access in the sub-continent.
“The US and India will work together to enable industry partnerships and investments in next generation data centres, cooperation on development and access to compute and processors for AI, for innovations in AI models and building AI applications for solving societal challenges while addressing the protections and controls necessary to protect these technologies and reduce regulatory barriers,” the countries stated in a joint statement.
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
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11. MicroCloud Hologram Inc. (NASDAQ:HOLO)
Number of Hedge Fund Holders: N/A
MicroCloud Hologram Inc. (NASDAQ:HOLO) offers digital twin and diverse high-precision LiDAR solutions based on holographic LiDAR point cloud architecture design, holographic imaging technology, LiDAR sensor chip design, and holographic vehicle intelligent vision technology for diverse clients, including those who offer holographic advanced drive assistance systems.
On February 13th, MicroCloud Hologram Inc. (NASDAQ:HOLO) announced it achieved a breakthrough in digital simulated quantum computing, facilitated by the integration of the DeepSeek AI mode. The company, using the DeepSeek model, developed a new neural architecture called the Quantum Tensor Network Neural Network (QTNNN) that can integrate deep learning with quantum system simulation to automatically learn the complex structure of quantum systems while minimizing resource consumption and retaining simulation accuracy.
10. Datasea Inc. (NASDAQ:DTSS)
Number of Hedge Fund Holders: N/A
Datasea Inc. (NASDAQ:DTSS) is a software company that focuses on supplying smart security solutions and innovating education-related technology, especially acoustic high-tech products like ultrasonic air sterilizers and utilizing 5G+AI multimodal digitalization services to combat viruses and prevent human infections through sound technology.
On February 14th, the company reported an 81% YoY revenue jump to $20.5 million for the quarter ended December 31st 2024, from $11.3 million, driven by accelerated adoption of its 5G+AI multimodal digital business services in China. Datasea Inc. (NASDAQ:DTSS) reported a marked YoY decrease in basic and diluted net loss per share at $0.16 from $0.72. During the quarter, its AI multimodal models recorded breakthroughs in sentiment analysis, machine translation, and natural language processing as it integrated DeepSeek’s distributed training methods. Moving forward, the company will prioritize profitability through margin expansion on acoustic products and global expansion through mergers and partnerships.
“Our strong performance in the second fiscal quarter reflects the successful expansion of our 5G+AI multimodal digital business customer base, where we continue to be an industry leader. We believe the expanding footprint of our 5G+AI customer base and the initial market penetration of our high-margin acoustic products underscore our ability to innovate and capture emerging opportunities. We remain committed to advancing our technological innovation while driving sustainable growth.”
-Zhixin Liu, CEO, Datasea Inc.
9. Aurora Mobile Ltd. (NASDAQ:JG)
Number of Hedge Fund Holders: N/A
Aurora Mobile Ltd. (NASDAQ:JG) provides mobile big-data products and developer services focusing on core in-app functionalities for leading internet firms and consumer brands. The company gathers anonymous device-level mobile behavioral data for AI-driven modeling exercises. It also applies AI and ML to its data repositories for the refinement of its data solutions.
On February 14th, Aurora Mobile Limited (NASDAQ:JG) announced that its AI platform, GPTBots.ai, launched new Audio LLM capabilities to enhance real-time, voice-driven AI interactions. The transformative update facilitates low-latency voice-to-voice communication powered by OpenAI’s native audio multimodal LLM, eliminating the need for traditional Automatic Speech Recognition and Text-to-Speech processes for better customer engagement and lead generation. Furthermore, GPTBots has enhanced its Audio LLM by integrating it with its Retrieval-Augmented Generation framework and workflow orchestration features to enable seamless interaction between audio messages and complex knowledge bases for businesses to easily manage knowledge-intensive scenarios.
8. Jet.AI Inc. (NASDAQ:JTAI)
Number of Hedge Fund Holders: 1
Jet.AI Inc. (NASDAQ:JTAI) is a private jet charter AI firm that uses natural language processing and advanced fleet logistics optimization services to streamline workflows for aviation operators and experiences for customers. Its software segment features the B2C CharterGPT and the Ava agentic booking AI powered by machine learning to enhance the private jet booking experience. Meanwhile, the Jet.AI operator platform is a software suite that helps charter providers boost revenue and efficiency while reducing environmental impact. The company’s aviation unit offers jet card program management, on-fleet charter services, and carbon crediting solutions.
On February 14th, a provider of premium jet charter experiences, flyExclusive Inc. (NYSEAmerican:FLYX), announced entering an agreement to acquire the aviation business of Jet.AI Inc. (NASDAQ:JTAI) that will help the latter improve its focus on becoming a pure-play AI solutions firm. The deal will occur after Jet.AI’s spin of the business into a new firm called “SpinCo”, which would then be purchased by flyExclusive. As part of the acquisition, Jet.AI (NASDAQ:JTAI) shareholders will retain their Jet.AI stock and receive new Class A common shares in flyExclusive (NYSEAmerican:FLYX).
7. D-Wave Quantum Inc. (NYSE:QBTS)
Number of Hedge Fund Holders: 6
D-Wave Quantum Inc. (NYSE:QBTS) is the parent company of D-Wave Systems and DPCM Capital. It is focused on advancing quantum AI products to enhance the optimization capabilities of annealing quantum computing, ultimately enabling clients to build energy-efficient AI and ML workloads. D-Wave Quantum Inc. (NYSE:QBTS) claims to be the commercial supplier of quantum computers, helping clients resolve real-world business challenges across industries like logistics, AI, materials science, and drug discovery.
On February 14th, B. Riley analyst Craig Ellis increased D-Wave Quantum Inc.’s (NYSE:QBTS) target price to $11 from $9 and maintained a “Buy” stock rating. The brokerage believes Microsoft Corp.’s (NASDAQ:MSFT) “Quantum Ready” service addition to Azure’s Quantum platform and proclamation that this year will be “the year to become quantum-ready” could be significant for sectoral market sentiment. B. Riley views quantum computing as the “what’s next” in high-performance compute beyond in-progress AI uptake, adding that recent industry and company developments should bring stock demand.
6. eGain Corp. (NASDAQ:EGAN)
Number of Hedge Fund Holders: 6
eGain Corp. (NASDAQ:EGAN) is a cloud-based software firm offering an AI-powered knowledge hub and SaaS-based analytics and customer service application to automate customer engagement and enable businesses to serve clients better across channels like web, mobile, and contact centers.
For Q2, the company’s revenue slid 6% year-over-year (YoY) to $22.4 million, marginally missing consensus estimates of $22.53 million. The GAAP net income was $671,000, or $0.02 per share on a basic and diluted basis, marking a YoY drop from $2.2 million, or $0.07 per share.
“We won several new enterprise logos in the second quarter,” said CEO Ashu Roy. “As a result, our annual recurring revenue from AI Knowledge Hub customers grew by 17% YoY and 5% sequentially. Customer service automation is a strategic focus for AI investment in Global 1000. As a result, we are seeing a growing number of seven-figure ARR deals in our sales pipeline.”
5. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technolgies Inc. (NASDAQ:PLTR) is a leading AI software system provider enabling machine-assisted and human-driven data analysis. Its data fusion interfaces, like the Palantir Artificial Intelligence Platform (AIP) and Palantir Foundry improve big data analytics for diverse industries and government agencies.
On February 4th, Morgan Stanley analysts led by Sanjit Singh increased Palantir Technolgies Inc.’s (NASDAQ:PLTR) target price to $95 from $60 and upgraded the stock to “Equal-weight” from “Underweight.” The brokerage highlighted the AI company’s accelerated growth for six consecutive quarters, which was driven by a steady increase in US commercial contracts and US government contracts. Analysts noted that the company expects Q1 2025 revenue growth north of 30%, much higher than the consensus outlook of mid-20% growth. Despite ultra-premium valuation, Singh explained that their upgrade was based on improving fundamentals and a robust 2025 outlook that could prevent any downside catalysts from materializing.
4. Wipro Ltd. (NYSE:WIT)
Number of Hedge Fund Holders: 11
Wipro Limited (NYSE:WIT) is a multinational company that offers IT and consulting services as well as business solutions worldwide for diverse sectors, including finance, healthcare, and manufacturing.
On February 13th, AI fintech firm Veuu announced a partnership with Wipro Ltd. (NYSE:WIT) to combine their AI capabilities and healthcare data management solutions to facilitate an instant payment platform for speedy and accurate health insurance claim processing while minimizing fraud and rejections.
Nani Iyer, Vice President & Sector Growth Leader, Healthcare at Wipro Ltd. (NYSE:WIT) said: “We are excited to partner with Veuu to deploy our Provider in a Box solution, that includes Veuu’s AI-enabled instant payments platform alongside our comprehensive IT and Provider Operations Transformation expertise to deliver immediate cash-flow relief, reduce overall healthcare costs, and improve the quality of care.”
3. Hewlett Packard Enterprise Co. (NYSE:HPE)
Number of Hedge Fund Holders: 64
Hewlett Packard Enterprise Co. (NYSE:HPE) offers high-performance computing systems, AI software, and data storage solutions for running diverse AI workloads.
On February 13th, Hewlett Packard Enterprise Co. (NYSE:HPE) stated that the company had completed the shipment of its first Nvidia (NASDAQ:NVDA) Grace Blackwell family-based system called the NVIDIA GB200 NVL72. The new rack-scale system will enable service providers and enterprises to swiftly deploy large and complex AI clusters with new-age, direct liquid cooling solutions with optimal efficiency and enhanced performance.
2. Palo Alto Networks Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Palo Alto Networks Inc. (NASDAQ:PANW) is a cybersecurity firm that provides network security products, including firewalls and cloud-based services. The company’s proprietary “Precision AI” system uses ML and AI to enhance cyber threat detection and remediation capabilities in real-time across network, cloud, and endpoint environments.
On February 14th, JMP Securities increased Palo Alto Networks Inc.’s (NASDAQ:PANW) price target to $212 from $208 and maintained an “Outperform” stock rating. Analysts said the company’s Q2 results met or exceeded expectations across all metrics. The management cited factors supporting the improvement of operating margins and cash flows beyond the FY25 guidance, including internal AI-based efficiencies, which could lower contract labor to support IT processes by 50% by the end of FY25.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) designs, manufactures, and sells consumer electronics, software, and services. The tech giant’s Apple Intelligence leverages generative models to improve user experience on Apple devices. Furthermore, the company’s AI capabilities also use on-device processing and private cloud compute to safeguard user privacy.
On February 14th, Bloomberg reported that Apple Inc. (NASDAQ:AAPL) might launch its AI features in China in May as it navigates legal challenges and works to modify Apple Intelligence for the Chinese market. Apple Inc. (NASDAQ:AAPL) is reportedly working with Baidu Inc. (BIDU) and Alibaba Group Holding Ltd. (NYSE:BABA) to include AI features in iPhones for China. The mainland has received AI features from Apple Inc. (NASDAQ:AAPL) for evaluation as it works with Alibaba to create a complaint, on-device AI system for Macs, iPads, and iPhones sold there.
While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL) 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 AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
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