Despite AI’s potential to transform our lives for the better, security threats associated with the technology continue to make headlines. North Korea’s Kim Jong Un oversaw tests of newly developed AI-powered suicide drones and called for increased production. Kim Jong Un had reportedly said that unmanned control and AI capability should be prioritized in modern arms development.
Elsewhere, Alabama Governor Kay Ivey banned Chinese AI tools over data security concerns.
“When it comes to the threat posed by the Chinese government, Alabama takes no chances. Our citizens’ information must be protected in the strongest possible ways, which is why we are not only putting a ban on these two Chinese AI companies within our state government but also safeguarding our state’s IT infrastructure from any foreign country of concern,” she said.
Bill Gates also recently reiterated concerns about AI replacing most jobs. He believes the rate of advancements in AI could mean that the technology could replace many professions, including doctors and teachers.
“It’s very profound and even a little bit scary — because it’s happening very quickly, and there is no upper bound,” Gates said in a recent interview. However, he noted that certain types of jobs will likely never be replaced by AI. He said last year that he remains optimistic about the overall benefits of AI, like “breakthrough treatments for deadly diseases, innovative solutions for climate change, and high-quality education for everyone.”
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of the number of hedge funds that hold stakes in them, as of Q4 2024.
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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9. Lantronix Inc. (NASDAQ:LTRX)
Number of Hedge Fund Holders: 17
Lantronix Inc. (NASDAQ:LTRX) offers computing and connectivity IoT solutions, focusing on high-growth markets, including smart cities, enterprises, and transportation. The company’s offerings include intelligent substation infrastructure, video surveillance, and Out-of-Band Management (OOB) for edge computing, which help clients advance their progress in the growing IoT markets.
On March 27th, Lantronix Inc. (NASDAQ:LTRX) announced the launch of its new Open-Q 8550CS system-on-module (SOM) powered by the Qualcomm Dragonwing QCS8550 processor. This SOM provides low-power, on-device AI and ML capabilities to help developers swiftly introduce edge products that involve applications like video collaboration/transcoding and integration with Edge AI gateways to markets. The company said it is an ideal platform for developing industrial edge AI products, including drones, controllers, robotics and industrial handheld devices for diverse industries like smart warehousing, manufacturing, transportation, logistics and retail.
“With the support of Qualcomm Technologies, Lantronix is driving seamless AI innovation at the Edge, empowering developers to harness embedded computing and IoT for cutting-edge, industrial-grade solutions. Together, we’re transforming the impossible into reality.”
-said Mathi Gurusamy, chief strategy officer at Lantronix.
8. Relay Therapeutics Inc (NASDAQ:RLAY)
Number of Hedge Fund Holders: 37
Relay Therapeutics Inc. (NASDAQ:RLAY) is a clinical-stage precision medicine firm focused on cancer treatments. The company leverages AI and ML for drug discovery, combining compute with experimental data to offer insights into protein motion and function and identify drug candidates that can potentially be transformed into novel therapies.
On March 27th, Barclays said it deems the latest pullback in Relay Therapeutics Inc. (NASDAQ:RLAY) shares as a buying opportunity. The brokerage said the biotech firm stands out in its coverage as having the “greatest upside and exposure to AI-driven drug discovery.” Analysts like the risk/reward for the stock with a cash runway till H2 2025 and a “derisked catalyst path.” The brokerage reiterated its “Overweight” rating on the stock and maintained a 12-month stock price target of $17 per share.