The global AI industry is growing at a rapid pace but a looming deadline could stall development across the world. The AI diffusion rule, unveiled by Former US President Joe Biden during his last week in Office, restricts the number of AI processors that can be exported to most nations. The rule will be effective on May 15th.
The goal is to ensure that AI development stays concentrated in the US and its close allies. American policymakers want AI data centers and infrastructure built elsewhere to comply with US security standards. If the US government implements the controversial framework, industry experts believe it could disrupt global infrastructure development plans and pose challenges for leading technology companies expanding in foreign markets.
When asked about export controls last week, Nvidia CEO Jensen Huang said that “we should continue to interact with the government,” so that “whatever policy they believe is best, is informed.”
Amid fears of the US taking control of global AI development, senior foreign officials and top tech companies urge the Trump Administration to reassess the semiconductor strategy. They are trying to persuade Trump’s team to ease some regulations before the compliance deadline.
“Left unchanged, the Biden rule will give China a strategic advantage in spreading over time its own AI technology, echoing its rapid ascent in 5G telecommunications a decade ago,” said Microsoft president Brad Smith last month.
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 Q4 2024 database of over 1000 hedge funds.
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).
An executive in a suit checking a bank of computers symbolizing the technology of the financial services industry.
8. NANO-X Imaging Ltd. (NASDAQ:NNOX)
Number of Hedge Fund Followers: 7
Nano-X Imaging Ltd. (NASDAQ:NNOX) offers affordable medical imaging technologies powered by AI and a proprietary digital X-ray source. The company provides a multi-source digital tomosynthesis system, a suite of AI algorithms to augment CT imaging readings, and a cloud-based software platform to manage data collected by Nano-X devices.
On March 26th, Nano-X Imaging Ltd. (NASDAQ:NNOX) announced that its deep-learning medical imaging analytics subsidiary, Nanox AI Ltd., will present new data from the AI-enabled Detection of OsteoPorosis for Treatment (ADOPT) study at four upcoming medical conferences between March and June. Kassim Javaid, the lead investigator of the ADOPT study, will present data from the study showcasing the clinical utility of the AI bone solution in assessing bone health and tracking key indicators of osteoporosis. The study results will also focus on the economic benefits AI tools could bring to healthcare. The ADOPT study revealed that AI-enabled Fracture Liaison Services, enhanced with other improvements, lowered patient refracture rates by up to 10%. Nanox AI’s more recent version of the AI bone solution, HealthOST, is FDA-cleared and was developed after the initiation of the ADOPT study. It offers better precision in measuring fractures.
“These conferences provide an important opportunity to share our growing body of evidence supporting the clinical value of AI in transforming bone health assessment. With osteoporosis affecting hundreds of millions worldwide, our AI solution is demonstrating the potential to significantly improve early detection rates and enhance patient care pathways.”
-said Orit Wimpfheimer, chief medical officer of Nano-X Imaging Ltd.
7. Spectral AI Inc. (NASDAQ:MDAI)
Number of Hedge Fund Followers: 7
Spectral AI Inc. (NASDAQ:MDAI) is a predictive AI company that leverages its DeepView System for medical diagnostics to provide faster and more accurate treatment in wound care, focusing on patients with burns. The DeepView System is being developed to help clinicians assess the healing potential of a burn wound before treatment at machine speed, reducing healthcare costs and improving patient outcomes.
On March 24th, Spectral AI Inc. (NASDAQ:MDAI) announced closing a debt financing agreement of up to $15 million from Avenue Venture Opportunities Fund II. It also raised $2.7 million of equity financing from investors to accelerate commercialization efforts for its products, including the upcoming launch of the DeepView System in the US.
“This significant financing provides Spectral AI with the resources necessary to finalize our commercialization efforts and bring our cutting-edge DeepView System across the finish line to the U.S. market. We are excited to be working with Avenue Capital and expect the partnership to provide long-term benefits to the Company. This supports our efforts to bring our technology to market and transform the way healthcare providers predict burn wound healing potential and ultimately improve patient outcomes.”
-said J. Michael DiMaio, chairman of the board of directors of Spectral AI Inc.
6. Verint Systems Inc. (NASDAQ:VRNT)
Number of Hedge Fund Followers: 24
Verint Systems Inc. (NASDAQ:VRNT) is a tech firm that prioritizes customer experience automation. Its diverse solutions enable clients to enhance customer engagement and experiences across various channels, including contact centers, web/mobile, and back offices.
On March 26th, Verint Systems Inc. (NASDAQ:VRNT) posted Q4 diluted earnings per share of $0.45, up from $0.37 a year earlier, on strong AI momentum. However, total revenue for the fiscal fourth quarter fell year-over-year to $253.55 million from $265.1 million. The company increased its subscription ARR guidance for the fiscal year 2026 from $760 million to $768 million.
“We are pleased to finish the year with strong AI momentum, overachieving our Q4 FYE 2025 ARR guidance by $8 million, and are raising our Q4 FYE 2026 ARR guidance. We are also pleased with our record SaaS ACV bookings from new deals, representing 30% growth year-over-year, and better than expected Bundled SaaS Revenue, representing 23% growth year-over-year. Behind our momentum is the strong ROI we deliver to our customers with AI business outcomes that are faster and stronger than any other vendor in our market. During FYE 2025, some of the largest brands in the world began to deploy Verint’s AI powered bots and we expect them to expand their usage over time. As of today, more than 90 of the Fortune 500 are using Verint’s AI-powered bots to automate workflows and many are already reporting strong AI business outcomes and expanding with us,”
-said Dan Bodner, CEO of Verint Systems Inc.
5. Allot Ltd. (NASDAQ:ALLT)
Number of Hedge Fund Followers: 25
Allot Ltd. (NASDAQ:ALLT) supplies cybersecurity solutions and network intelligence for global communication service providers and enterprises. The company’s offerings include network-native cybersecurity services, network and application analytics, and traffic control and shaping.
On March 26th, Allot Ltd. (NASDAQ:ALLT) announced that Rakuten Mobile deployed Allot Network Protection and Deep Network Intelligence solutions as it transitions from a Network Functions Virtualization architecture to its cloud-native Rakuten Symphony Platform. The Allot Smart NetProtect solution uses ML and AI to detect anomalies in network traffic before they impact service quality.
“The migration process from NFV to Rakuten Symphony’s cloud-native platform was a feat in itself, in which Allot participated as a close technology partner with Rakuten Mobile. As a part of the Rakuten Mobile blueprint for cloud-native networking services, Allot has displayed an ability to support a top-tier communications service provider in the live cloud-native deployment of its fully containerized solutions, protecting one of the most advanced networks in the world.”
-said Oren Kaufman, general manager at Allot Ltd., Japan.
4. Leonardo DRS Inc. (NASDAQ:DRS)
Number of Hedge Fund Followers: 25
Leonardo DRS Inc. (NASDAQ:DRS) offers advanced defense technologies to US national security clients and allies globally. The company designs, develops, and manufactures sensing, network computing, electric power and propulsion, among other mission-critical technologies for autonomous, interconnected, and multi-domain capabilities to defend against evolving threats.
On March 25th, Leonardo DRS Inc. (NASDAQ:DRS) introduced its high-performance Artificial Intelligence Processor (AIP) computing system, designed for rugged environments. The system swiftly delivers real-time threat detection, situational awareness, and advanced mission insights to military vehicles. The processor analyzes vast repositories of battlefield data to offer actionable intelligence to soldiers across the US Army’s ground vehicle fleet, reducing the cognitive burden on crews and commanders.
“With AIP, we are redefining how A.I. is deployed in combat operations. This is not just about processing power—it’s about delivering decisive advantage in real-time, ensuring soldiers and commanders are able to make the right decisions when it matters most.”
-said Denny Crumley, senior vice president and general manager at Leonardo DRS Inc.
3. Harmonic Inc. (NASDAQ:HLIT)
Number of Hedge Fund Followers: 27
Harmonic Inc. (NASDAQ:HLIT) offers virtualized broadband and video delivery solutions to help media firms and service providers deliver high-quality video streaming and broadcast services to global consumers. The company’s virtualized broadband solution enables operators to offer gigabit internet services to consumers. Meanwhile, its innovative cloud and software platforms simplify OTT video delivery, paving the way for clients to monetize live and on-demand content efficiently.
On March 25th, Harmonic Inc. (NASDAQ:HLIT) announced the enhancement of the VOS360 SaaS solutions with new AI features for better viewer engagement and monetization. The company said broadcasters and service providers can now explore new monetization opportunities with the AI-enhanced VOS360 Ad SaaS solution, which auto-detects ad breaks and inserts SCTE-35 markers in live content for providers to monetize source content without ad markers. The VOS360 solutions will also offer features like automated subtitles powered by speech-to-text AI, AI-based sports clipping for real-time highlight creation, and automated translation with voice cloning. These innovations will be showcased at the 2025 NAB Show.
“AI has undoubtedly emerged as one of the key transformational forces shaping the future of the video industry — from delivering state-of-the-art viewer experiences to unlocking new ad revenues. Streaming providers and broadcasters need to embrace AI to stay ahead in an evolving industry landscape. The latest AI enhancements to our VOS360 solutions offer a host of benefits and are fully orchestrated within a single, tested and qualified solution, making it easier, faster and more cost-efficient for our customers to embrace innovation.”
-said Orit Kahana, vice president of SaaS product management at Harmonic Inc.
2. Keysight Technologies Inc. (NYSE:KEYS)
Number of Hedge Fund Holders: 51
Keysight Technologies Inc. (NYSE:KEYS) leverages AI in its electronic design, manufacturing, and testing solutions to streamline complex testing data analysis and achieve faster and more accurate identification of signal and power integrity issues in the automotive, aerospace, and communications industries.
On March 25th, Keysight Technologies Inc. (NYSE:KEYS) announced two new oscilloscopes for 1.6T optical transceiver testing that deliver ultra optical measurement sensitivity and integrated clock recovery up to 120 GBaud. The products target the growing demand for 1.6T transceiver optical testing for R&D and manufacturing optical interconnects for data center AI clusters. The new DCA-M sampling oscilloscopes are designed to match higher transmission rates required by AI and ML.
“Enabling next-generation data centers and AI clusters, raises the bar for time-to-market and performance of R&D and manufacturing solutions. We are proud of our progress in supporting the industry as it advances AI infrastructure, laying the foundation for future generations to innovate in new and transformative ways.”
-said Joachim Peerlings, vice president of Network and Data Center Solutions at Keysight Technologies Inc.
1. Motorola Solutions Inc. (NYSE:MSI)
Number of Hedge Fund Holders: 57
Motorola Solutions Inc. (NYSE:MSI) is a tech firm offering enterprise security and public safety solutions through communication and video security products, cybersecurity solutions, LTE devices and broadband systems, and command center software.
On March 26th, Motorola Solutions Inc. (NYSE:MSI) announced a portfolio of AI-powered devices called Pelco for enterprises operating in challenging environments like oil, gas, ports, and aviation. Pelco devices include fixed cameras, sturdy long-range cameras, smart sensors, and AI analytics that integrate with various third-party video management systems. All Pelco devices are supported by the camera support platform Elevate, which evaluates camera health and expands its sensing capabilities with cloud-based AI.
“Pelco provides security operators with robust AI-powered security solutions capable of performing across a wide range of environmental conditions. We’ve purposefully created Pelco to combine rugged hardware, state-of-the-art sensing and AI-powered analytics for a VMS-agnostic device portfolio that is driving higher standards in critical infrastructure security.”
-said Hamish Dobson, corporate vice president, Pelco.
While we acknowledge the potential of Motorola Solutions Inc. (NYSE:MSI) 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 MSI 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 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
