Is heavy regulation the right approach toward artificial intelligence? According to U.S. Vice President JD Vance, not quite. Instead, Vance is convinced that “massive” regulations on artificial intelligence could strangle the technology, rejecting content moderation as “authoritarian censorship”. On a similar note, the US and the UK have declined to sign the final statement of a recently held AI summit that said AI should be inclusive, open, ethical, and safe.
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With the AI arms race in full swing, countries appear to prioritize competition rather than safety and inclusivity. Vance has said that the United States intends to remain the dominant force in AI, strongly opposing the European Union’s strict regulatory approach.
“We believe that excessive regulation of the AI sector could kill a transformative industry. We feel very strongly that AI must remain free from ideological bias and that American AI will not be co-opted into a tool for authoritarian censorship.”
-Vance told the summit of CEOs and heads of state in Paris, as reported by Reuters.
Vance also noted criticizing the “massive regulations” created by the EU’s Digital Services Act as well as Europe’s online privacy rules. According to him, these rules will only translate to endless legal compliance costs for smaller firms.
“Of course, we want to ensure the internet is a safe place, but it is one thing to prevent a predator from preying on a child on the internet, and it is something quite different to prevent a grown man or woman from accessing an opinion that the government thinks is misinformation”.
-Vance.
Judging by these discussions and the news that the UK and US have declined to sign the international AI declaration, UN Secretary-General António Guterres has rightly warned that AI is transforming our world already, but its power rests “in the hands of a few”.
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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12. Confluent, Inc. (NASDAQ:CFLT)
Number of Hedge Fund Holders: 39
Confluent, Inc. (NASDAQ:CFLT) is a technology company that provides data streaming platforms. On February 11, the company announced a major expansion in its partnership with Databricks, a global data, analytics, and artificial intelligence company. The partnership will integrate Confluent’s complete Data Streaming Platform and Databricks’ Data Intelligence Platform, providing enterprises with real-time data for AI-driven decision-making. Owing to new integrations between Confluent’s Tableflow and Databricks Unity Catalog, businesses will be able to manage and analyze data seamlessly, and efficiently build AI applications.
“Real-time data is the fuel for AI. But too often, enterprises are held back by disconnected systems that fail to deliver the data they need, in the format they need, at the moment they need it. Together with Databricks, we’re ensuring businesses can harness the power of real-time data to build sophisticated AI-driven applications for their most critical use cases.”
– Jay Kreps, co-founder and CEO, Confluent.
11. ON Semiconductor Corporation (NASDAQ:ON)
Number of Hedge Fund Holders: 45
ON Semiconductor Corporation (NASDAQ:ON), or onsemi, is a semiconductor manufacturing company that provides intelligent sensing and power solutions. On February 10, the company announced its fourth quarter and fiscal year 2024 results. It reported adjusted earnings per share of $0.95 for the fourth quarter, missing the analyst consensus of $0.97 by $0.02. Meanwhile, revenue came in at $1.72 billion, which was below the expected $1.76 billion.
It has also forecast first-quarter revenue below Wall Street expectations due to weakening demand for its automotive chips as customers cut back on orders due to economic uncertainty. Onsemi expects first-quarter revenue between $1.35 billion and $1.45 billion, as compared to analysts’ estimates of $1.69 billion, according to data compiled by LSEG. Despite disappointing results, CEO Hassane El-Khoury remained optimistic about the company’s long-term prospects and its “differentiated intelligence power and sensing solutions”.
“As we continue to navigate this market downturn, our actions over the last four years have proven we are a structurally different company that is well-equipped to navigate prolonged volatility. While 2025 remains uncertain, we remain committed to our long-term strategy. We will maintain our financial discipline, streamline our operations and continue to deliver high-value, differentiated intelligent power and sensing solutions that position onsemi to emerge even stronger.”
-Hassane El-Khoury, president and CEO, onsemi.
10. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 47
Fortinet, Inc. (NASDAQ:FTNT) is a cybersecurity company that provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products. On February 12, the company announced that it would be showcasing its groundbreaking sovereign SASE solution at the MWC Barcelona 2025. Secure access service edge (SASE) is a cloud-native architecture that integrates network security and connectivity to provide secure access to applications and data for users regardless of their location.
The company is offering service providers a unique opportunity to explore how Fortinet Sovereign SASE enables them to create their own dedicated private SASE service. The Fortinet Sovereign SASE solution is powered by one operating system, FortiOS, along with simple integration. This enables service providers to create dedicated private SASE services so that they can enhance flexibility and control over data. Those who have already invested in Fortinet Secure SD-WAN can naturally expand into sovereign SASE by tapping on their existing investments and expertise.
“Organizations with strict regional or regulated industry compliance requirements are often faced with the dilemma of having a strong need for improved security posture while also having a significant barrier to adoption for modern SASE architectures. Fortinet’s Sovereign SASE solution takes the compliance guesswork out of adoption and enables service providers to deliver a robust SASE platform and expand from SD-WAN, which includes the latest DEM, network visibility and AI-assisted security capabilities to the customers that need it most.”
-Pete Finalle, Research Manager, Security & Trust at IDC.
9. monday.com Ltd. (NASDAQ:MNDY)
Number of Hedge Fund Holders: 49
monday.com Ltd. (NASDAQ:MNDY) develops software applications globally, offering a cloud-based Work OS for creating work management tools. On February 11, Jefferies analyst Brent Thill raised the firm’s price target on the stock to $400 from $300 and kept a “Buy” rating on the shares. The rating, issued after the company’s strong Q4 results, discussed how FY25 revenue guidance has been “better than feared.” The analyst further added that management’s tone was “confident”, and that the company will start monetizing artificial intelligence based on consumption. However, no benefit is embedded in FY25 guidance.
8. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity. On February 12, Baird raised the firm’s price target on the stock to $230 from $218 and kept an “Outperform” rating on the shares. Previewing Q2 results, the firm noted that Palo Alto is expected to report robust Next-Gen Security Annual Recurring Revenue (NGS ARR), likely exceeding guidance. The company defines Next-Generation Security ARR as the annualized allocated revenue of all active contracts as of the final day of the reporting period for its AI-powered Prisma and Cortex offerings.
It also stands to benefit from multi-quarter tailwinds from customer retention and platformization. Additionally, channel checks suggest that the company is gaining market share in key security areas such as SIEM/SecOps and single-vendor SASE adoption. Management’s focus on annual billings, free cash flow stability, and a strategic emphasis on deepening federal agency relationships, further reinforce the buy rating.
7. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 70
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers. On February 11, Benchmark Co. analyst Cody Acree reiterated a “Buy” rating on the stock and set a price target of $135.00. Besides Benchmark, several other analyst firms such as Bank of America Securities and Barclays are bullish on the stock, citing it as a leading semiconductor stock of 2025.
Vivek Arya from Bofa believes that Marvell, together with Broadcom and Nvidia, are at the heart of AI’s Sputnik moment. This is because semiconductor advancements position the stock at the forefront of the AI revolution. DeepSeek’s emergence is also seen as a catalyst, with the analysts citing the advancement to be a stimulant for an even bigger wave of investment. Firm analysts believe that hyperscalers and semiconductor companies will reap the rewards of it.
6. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection. On February 12, Truist analyst Joel Fishbein raised the firm’s price target on the stock to $460 from $385 and kept a “Buy” rating on the shares. The analyst noted that the effects of the July 19 Global IT outage are behind Crowdstrike.
The company has reported solid Q3 results, driven by more customers adopting its AI-native Falcon platform and increased demand for Falcon Flex deals, a flexible licensing agreement offering access to the entire CrowdStrike Falcon portfolio on a flexible basis. The firm also noted that Crowdstrike has built an adequate cushion in its guidance to account for delayed outbound prospecting. This has since fully resumed and is rising to pre-incident levels of response.
5. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On February 12, Benchmark analyst Mickey Legg initiated coverage of the stock with a “Buy” rating and a $475 price target. The firm stated that it likes Tesla’s growth opportunities.
It also said that apart from the company’s proliferation in the electric vehicle market, Tesla has multiple opportunities in areas such as autonomous vehicles, robotics, and energy generation/storage. “A key catalyst for the stock” in 2025 is going to be the release of more affordable Tesla models, analysts noted. They further added that its model has only baked in vehicle growth, “providing significant potential upside should autonomous vehicles and Optimus achieve scale”.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On February 11, Reuters reported that Nvidia’s potential competitor Positron, a startup chip maker, has raised $23.5 million to scale production of its U.S.-made artificial intelligence chips. Some of the investors who participated in the round include Valor Equity Partners, Atreides Management, Flume Ventures, and Resilience Reserve. Positron claims that its Ariuzona-manufactured chips use less than a third of the power of Nvidia’s top-of-the-line H100 graphical processing units, all while maintaining the same performance.
However, the startup’s chips are meant for inference, the period when an AI model is being used, instead of for training AI models. Even though demand is currently higher for training chips, analysts predict demand for inference chips could rise and even surpass them with more AI applications being deployed. At the moment, Nvidia’s chips have a market share of roughly 80%. However, tech giants and other players are increasingly looking at alternatives amid rising costs and dependence on a single supplier.
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On February 10, the company took on a new initiative, in partnership with OpenAI, Roblox Corp., and Discord, raising more than $27 million to provide free, open-source tools for improving child safety online. Robust Open Online Safety Tools, or ROOST, was launched at the Artificial Intelligence Action Summit in Paris. The new non-profit organization aims to bring together major technology companies and philanthropies to build safety infrastructure for the AI era.
The founding partners of this partnership include Eric Schmidt, Discord, OpenAI, Google (GOOGL), Roblox (RBLX), John and James Knight Foundation, AI Collaborative, Patrick McGovern Foundation, and Project Liberty Institute. According to Eric Schmidt, a founding partner of the organization and former chief executive officer of Google, ROOST promises to address “a critical need to accelerate innovation in online child safety”.
“ROOST ushers in a new era of collaborative safety innovation. By making robust safety tools accessible to all through open source, we’re creating a more pluralistic and secure digital future in the age of AI. We thank our founding partners and supporting partners for their invaluable contributions to this mission.”
– Camille François, President of ROOST and Professor at Columbia University.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On February 11, Bloomberg compiled data revealed that the tech giant has achieved the longest winning streak of any current Nasdaq 100 Index component since 1990. Monday’s session on February 10 capped off 16 straight days of gains. The stock was up 17% in that period and neared a $1.8 trillion valuation for the first time. Despite the gain, it remains one of the cheapest big tech plays.
DeepSeek’s emergence proved to be devastating for many tech stocks, but Meta’s shares climbed as investors viewed DeepSeek’s success as a validation of open-source models such as Meta’s. Moreover, the company’s results have highlighted how AI is improving ads that are being targeted to users. Zuckerberg also noted that 2025 is going to be a “really big year” for AI, and even began staff job cuts from Monday as it began focusing on AI talent.
“Meta is really ahead of its competitors in proving that the capex it is pouring into AI is working, which is why investors continue to gravitate toward it. It has shown that AI is having an impact on user engagement, on margins, whereas Alphabet still needs to prove its capex is working and that its market share in search won’t be eroded.”
-Jim Polk, head of equity investments at Homestead Advisers.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com Inc (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. On February 12, JFrog Ltd., a software company, announced that it had signed a strategic collaboration agreement (SCA) with Amazon Web Services (AWS). Through this agreement, enterprise customers will be empowered to swiftly migrate workloads to AWS to maximize the value of their cloud-based, software supply chain investments.
Customers will be able to leverage accelerated cloud migration and increased resources through AWS Marketplace procurement. JFrog’s comprehensive DevOps capabilities on AWS have been helping companies such as Fortra, a company offering cybersecurity and automation solutions, to ensure high-performance, secure, and scalable infrastructure management. Consequently, Fortra has been able to focus on innovating without constantly managing the underlying infrastructure.
“We at Fortra have greatly benefited from the implementation of the JFrog Platform on AWS. The seamless integration and robust features of JFrog, combined with the reliable and scalable infrastructure of AWS, have significantly optimized our developer experience. The comprehensive security measures and cloud-native DevSecOps capabilities provided by JFrog ensure our development processes are secure and compliant. Additionally, procuring JFrog through AWS Marketplace has streamlined the acquisition process, allowing us to quickly deploy and manage our solutions with ease. We are excited about the deepening collaboration between JFrog and AWS, and the tremendous value it will bring to customers like Fortra.”
-Jody Dahl, VP of Research and Development, Fortra.
While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some 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 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 Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
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