Battle lines on artificial intelligence supremacy and dominance have been drawn. Fresh from touting the success of DeepSeek on the development of cost-effective AI models, China has made it clear it won’t sit back and play second fiddle to US dominance on AI innovations.
The country’s top economic officials are in the process of setting up a state-backed fund that will support technological innovation focusing on advanced technology like AI. According to Zheng Shanjie, head of China’s state economic planner, the state venture capital fund could attract $138 billion in capital over the next 20 years.
Most of the funding comes from local governments and the private sector and will accelerate the development of high-end chips. The capital injection should also support China’s ambitions for artificial intelligence, robotics, and quantum computing. China has already made significant progress in the rapid growth of microchips and AI large language models as it looks for ways to bypass US export control regulations.
“Scenes once only seen in science fiction are now becoming reality. We are steadily moving toward the global frontiers of technology and innovation,” Zheng said. “This proves that the suppression and blockade attempt by certain forces only serve to accelerate our drive for independent innovation,” he added in an apparent reference to the United States.
When DeepSeek unveiled its R1 large language model in January, it caused a stir in the world’s stock markets. However, it could almost match its competitors’ capabilities, including OpenAI’s GPT-4. This took observers aback since the US has been trying for years to limit China’s access to high-power AI chips due to national security concerns.
Even as China ramps up AI investments, the US is not sitting back and letting its dominance fizzle in thin air. The US, under President Donald Trump, continues to provide a friendly investment environment to attract investment from the public and private sectors. Trump and tech companies have collaborated more and more since his election in November of last year, with Trump keen to demonstrate that his administration is more business-friendly than Joe Biden’s.
The $500 billion Stargate project for enhancing data center capacity underscores how the US remains a top investment destination amid the AI boom.
“This infrastructure will secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefits for the entire world. This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies,” OpenAI said in a statement about the Stargate Project.
In Texas, the first data centre for the Stargate project is in the pipeline. OpenAI maintains in a policy white paper that investments in US AI infrastructure can guarantee that US AI tools outperform Chinese technology and generate new economic opportunities and jobs. As a result, the parent company of ChatGPT is pleading with the US government to develop a fundamental plan to guarantee that infrastructure spending maximizes access to AI and benefits the greatest number of people. According to the brief, $175 billion in global funds are waiting to be invested in AI projects.
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9. Serve Robotics Inc. (NASDAQ:SERV)
Number of Hedge Fund Holders: 10
Serve Robotics Inc. (NASDAQ:SERV) is a speciality industrial machinery company that develops and operates autonomous delivery robots, focusing on sustainable and efficient last-mile logistics. The company seeks to revolutionize delivery services by developing advanced AI-powered low-emission delivery robots that aim to make delivery sustainable and economical. On March 7, the company delivered a solid fourth quarter and full year 2024 results.
Revenue reached $1.8 million in 2024, with Q4 contributing $176,000, marking a 773% year-over-year growth and highlighting the increasing adoption of its technology and services. Serve Robotics Inc. (NASDAQ:SERV) also exited the quarter in a strong financial position with $167 million of financing. During the year, it finished designing a third-generation AI-powered robot with much-improved capabilities, such as moving about twice as quickly, traveling twice as far, and using five times as much AI computing power, at the cost of about half that of previous models.
“We entered the year with an ambitious plan and made significant progress in realizing it. We believe we are well-positioned for continued growth and on track to deploy 2,000 robots across the U.S. by year-end, said Dr. Ali Kashani, Serve’s Co-founder and CEO.
8. Navitas Semiconductor Corporation (NASDAQ:NVTS)
Number of Hedge Fund Holders: 13
Navitas Semiconductor Corporation (NASDAQ:NVTS) designs, develops, and markets gallium nitride power integrated circuits, silicon carbide, and digital isolators for power conversion and charging. Its products are used in mobile, consumer, AI data centers and electric vehicles. The company plans to introduce GaN and SiC power technologies for use in AI data centers, EVS, and mobile applications.
On March 4, analysts at Baird reiterated an Outperform rating on the stock but cut the price target to $4 from $5. The revision comes on Navitas Semiconductor Corporation (NASDAQ:NVTS) announcing that the customer pipeline for its products expanded significantly last year. In 2024, the company’s customer pipeline grew by 92% year over year, reaching $2.40 billion. The data center sector is gaining attention as Navitas’ fastest-growing end market amid the AI boom. This growth is considered a positive indicator of the company’s future outcomes.
7. Domo, Inc. (NASDAQ:DOMO)
Number of Hedge Fund Holders: 18
Domo, Inc. (NASDAQ:DOMO) is a technology company that offers a cloud-based business intelligence platform. Its platform digitally connects management teams, frontline employees, and various people, data, and systems. It also offers AI-powered solutions that help businesses analyze data and automate processes. The company’s strategic positioning in AI and data analytics is already starting to bear fruit.
On March 7, Domo, Inc. (NASDAQ:DOMO) delivered better-than-expected fourth-quarter and full-year 2024 results. It also provided upbeat guidance that affirmed underlying growth. Its fourth-quarter revenue totaled $78.8 million, above consensus estimates of $78.06 million. It also posted an adjusted net loss per share of $0.05 against analysts’ estimates of a loss of $0.17 a share. The better-than-expected financial results came from Domo, which laid the foundation for durable and sustainable growth as it works on innovative AI solutions.
“Domo was made for this rapidly evolving AI and data environment, and we are thrilled to be executing strategically, while also guiding to billings growth for this year and cash flow generation this quarter and this year,” said Josh James, founder and CEO, Domo.
6. Planet Labs Pbc (NYSE:PL)
Number of Hedge Fund Holders: 19
Planet Labs Pbc (NYSE:PL) is a provider of satellite imagery and geospatial solutions. The company designs, builds, and operates the earth observation fleet of imaging satellites. It also leverages artificial intelligence to analyze troves of satellite imagery to enable the creation of actionable insights for a wide range of applications. On March 6, the company announced a strategic partnership with AI startup Anthropic.
The partnership paves the way for Planet Labs Pbc (NYSE:PL) to leverage Anthropic’s Claude solution to enhance how people understand and analyze satellite imagery data. The ultimate goal is to transform how satellite data is processed and understood, enabling near real-time pattern recognition and anomaly detection at a global scale. The integration could benefit various sectors, from government surveillance and agricultural optimization to firefighting and conservation efforts.
“Anthropic’s advanced AI capabilities have the potential to rapidly change how analysts fundamentally use and understand satellite data. By using Claude on our satellite imagery, we take a significant step towards making it easier to extract value from satellite data. From governments who can scan large areas for new threats to a small holder farmer trying to improve crop yields, from firefighters in California to conservation NGOs in the Congo, this can help users get value from our data faster,” said Planet CEO and co-founder Will Marshall.
5. John Wiley & Sons, Inc. (NYSE:WLY)
Number of Hedge Fund Holders: 26
John Wiley & Sons, Inc. (NYSE:WLY) is a research and learning company. It offers scientific, technical, medical, and scholarly journals and related content and services. On March 6, the company delivered third-quarter fiscal 2025 results that affirmed significant margin expansion.
While total revenue in the quarter dropped to $405 million from $461 million in the third quarter of fiscal 2024, adjusted revenue was up by 1.2% at constant currency. A 5.2% revenue increase in the research segment was one of the bright spots that affirmed the long-term prospects of the company’s AI licensing agreements. The increase came as John Wiley & Sons, Inc. (NYSE:WLY) continued to capitalize on the growing demand for scientific research and responsible AI model development.
“Our recurring revenue Research business has not only proven to be resilient across economic cycles but poised for continued expansion; our authoritative content and data-driven insights are increasingly coveted by corporations for their research and development initiatives, including AI enablement; and our strong execution and cost re-engineering efforts continue to deliver tangible results, with significant margin and cash flow improvement this year and raised margin expectations for Fiscal 2026,” said Matthew Kissner, Wiley President and CEO.
4. Hut 8 Mining Corp. (NASDAQ:HUT)
Number of Hedge Fund Holders: 34
Hut 8 Mining Corp. (NASDAQ:HUT) provides infrastructure and solutions for the global technology ecosystem, including high-performance computing (HPC) and digital asset mining. The company also focuses on AI and cloud computing, offering services like GPU-as-a-service. Management is advancing three large-scale AI data center projects with a capacity of over 430 megawatts MW.
Analysts at H.C. Wainwright are bullish about the company’s AI prospects backed by the 300 MW utility-scale assets in West Feliciana Parish, Louisiana. With about 200MW of the project dedicated to IT loads, the analysts believe it could yield about $250 million in annual HPC/AI-related revenues. Analysts at Rosenblatt Securities share similar sentiments, having initiated coverage of the stock on March 7 with a Buy rating and a $23 price target.
Rosenblatt analysts predict that Hut 8 Mining Corp.’s (NASDAQ:HUT) various revenue streams will start to pick up speed as early as the first quarter of 2025, with high-margin High-Performance Computing (HPC) operations expected to be up and running by the year’s end.
3. Samsara Inc. (NYSE:IOT)
Number of Hedge Fund Holders: 40
Samsara Inc. (NYSE:IOT) is a software infrastructure company that offers solutions that connect physical operations data to its connected operations cloud. It also uses AI to enhance its platform, offering features like AI Dash Cams for video-based safety, AI-powered vehicle telematics, and AI-driven insights to improve fleet management. On March 6, the company delivered impressive results for its fiscal 2025, characterized by a 33% increase in annual recurring revenue to $1.46 billion in its fourth quarter.
Samsara Inc. (NYSE:IOT) also added 14 new customers with $1M plus in annual recurring revenue and a quarterly record of 203 customers with $100K+ ARR. Samsara’s data set grew significantly in FY25 due to its increased customer base and multi-product adoption. More than 14T data points were processed, representing more than 50% YoY growth and more than 120B API calls, representing more than 50% YoY growth.
“Our customers partner with us because we provide actionable insights that help them operate smarter,” said Sanjit Biswas, CEO and Co-Founder at Samsara. “Samsara is building one of the world’s largest operational data sets and combining it with AI will transform our customers’ operations in the next decade.”
2. Motorola Solutions, Inc. (NYSE:MSI)
Number of Hedge Fund Holders: 57
Motorola Solutions, Inc. (NYSE:MSI) is a communication equipment company that provides public safety and enterprise security solutions. It offers a portfolio of infrastructure, devices, accessories, and video security devices and infrastructure, as well as the implementation and integration of systems. On March 6, the company confirmed the acquisition of Theatro Labs, strengthening its prospects around artificial intelligence.
Theatro Labs is a Texas-based company specializing in artificial intelligence and voice-powered communication software for frontline workers. The acquisition should strengthen Motorola Solutions, Inc.’s (NYSE:MSI) portfolio of enterprise security technologies. Motorola Solutions intends to incorporate Theatro’s processes into its current technologies, such as radios, body cams, fixed video, and panic buttons. By expanding into the hospitality, healthcare, manufacturing, and educational sectors, this integration seeks to develop new value-added services and security applications.
1. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 66
Hewlett Packard Enterprise Company (NYSE:HPE) is a global technology company that provides IT products, solutions, and services. It focuses on helping businesses connect, protect, analyze, and act on data and applications from edge to cloud. The company also delivers a full-stack solution for running an AI-powered business. Its AI software helps make data AI-ready, automate and scale complex data pipelines. Nevertheless, the stock remains under pressure after the company announced on March 6 that tariffs, weak margins on server sales and execution issues in 2025 will hurt its profit.
According to Woo JIN Ho, an analyst at Bloomberg Intelligence, HPE’s weak outlook implies underlying problems that might go beyond tariff impact and weak margins on artificial intelligence systems. Chief Executive Officer Antonio Neri has already confirmed that the company’s server unit faces issues attributed to discounting sales and higher-than-realized issues. A build-up in older generation semiconductors cloudily dents profit.
While artificial intelligence has fueled a strong demand for powerful HPE servers, the business line is struggling to drive the bottom line due to lower margins. The situation is exacerbated by the need to equip the servers with expensive chips from Nvidia.
While we acknowledge the potential of Hewlett Packard Enterprise Company (NYSE:HPE) 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 HPE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
