Artificial Intelligence is a game changer. According to a PwC report, it could contribute up to $15.7 trillion to the global economy by 2030. Of this, $6.6 trillion is likely to come from increased productivity while $9.1 trillion is from consumption-side effects. The report also reveals that global GDP will be up to 14% higher in 2030 due to the accelerating development of AI. The greatest productivity gains are likely to go to North America and China, with the former expected to realize the AI benefits faster.
READ ALSO: Top 10 Trending AI Stocks to Watch in November and Top 10 Trending AI Stocks in Q4.
However, the surge in artificial intelligence will require a huge number of data centers, and it is significantly going to impact how much the world consumes power, and how much that is going to cost. To have an idea, on average, a ChatGPT search needs as much as 10 times more electricity to process as a Google search. That said, AI gathering steam is only going to make the power hunger crazier. According to estimates from Goldman Sachs, the data center demand is going to grow 160% by 2030. Presently, data centers consume about 1-2% of overall power, but the percentage is likely to rise to 3-4% by the end of the decade.
The Latest Developments in AI
As we examine the increasing energy demand of data centers stemming from the surge in AI, it’s worth noting how these advancements are manifesting in practical applications. In its latest breakthrough, Anthropic, an artificial intelligence company that builds reliable, interpretable, and steerable AI systems, has launched Claude 3.5 Sonnet—their first release in the forthcoming Claude 3.5 model family. The Claude 3.5 Sonnet sets new industry benchmarks for graduate-level reasoning (GPQA), undergraduate-level knowledge (MMLU), and coding proficiency (HumanEval), demonstrating marked improvement in grasping nuance, humor, and complex instructions, and is exceptional at writing high-quality content with a natural and relatable tone.
Another exciting news is how Runway, an AI company shaping the next era of art, entertainment, and human creativity, has launched a new set of advanced AI camera controls for its Gen-3 Alpha Turbo video generation model. These tools allow the user generating videos from text prompts, upload images, or even their footage, to have greater control over the AI-generated settings and characters. Users can even zoom in or out of the scene and subjects without disrupting their realism, creating a more immersive experience of a seemingly 3D world.
In other news, a highly anticipated release that many have been waiting on is seemingly delayed, as per the latest reports. On Thursday, OpenAI CEO Sam Altman revealed that his company’s next big model won’t likely be released this year. According to Altman, the company is “prioritizing” shipping existing models focused on reasoning and difficult questions.
“All of these models have gotten quite complex and we can’t ship as many things in parallel as we’d like to”. He said the company faces “limitations and hard decisions” when it comes to allocating compute resources “towards many great ideas.”
– Altman wrote during a Reddit AMA.
When asked about the release of ChatGPT-5, Altman stated that the company has some very good releases this year but “nothing that we are going to call GPT-5.”
Now, let’s take a look at the 10 latest developments in AI that investors should not miss.
An array of news articles and video clips with the company logo.
Our Methodology
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.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. Penguin Solutions, Inc. (NASDAQ:PENG)
Penguin Solutions, Inc. (NASDAQ:PENG) is a technology company engaged in the design and development of enterprise solutions worldwide. The company is a leading AI infrastructure provider for organizations looking to build and operate state-of-the-art generative AI facilities.
On Friday, November 1st, Goldman Sachs initiated coverage of the enterprise AI company, Penguin Solutions, Inc. (NASDAQ:PENG), with a “Buy” rating and a $21 per share price target.
“PENG is well positioned to address the growing enterprise AI compute opportunity through its Penguin Computing integrated solution, where the company has 25 years of experience designing, building, deploying and managing high-performance computing projects”.
-Goldman analyst Michael Ng.
As per the analyst, even though the company’s LED and memory businesses are cyclical and face drawbacks, they believe that the potential growth runway due to generative AI can more than makeup for any decline in revenue.
“We are encouraged by PENG’s exposure to enterprise AI demand, which should help drive PENG revenue to grow at a 13% 5-yr CAGR (F2024-29) and expand operating margins, driven by growth in its compute business and a recovery in the more cyclical memory and LED markets”.
-Ng added.
9. Atlassian Corporation (NASDAQ:TEAM)
Number of Hedge Fund Holders: 47
Atlassian Corporation (NASDAQ:TEAM) is a global software company that designs, develops, licenses, and maintains various software products worldwide. The company offers generative AI capabilities in its products, such as across Jira Software, Confluence, Jira Service Management, and more.
On November 1st, Morgan Stanley maintained its “Overweight” rating on Atlassian, effectively adjusting its price target from $224 to $259. The rating follows Atlassian’s impressive Q1 fiscal 2025 earnings and optimistic expectations. The report from Atlassian confirms Atlassian’s investment in Gen AI-enabled Atlassian Intelligence and its Cloud platform, revealing a 31% YOY increase in cloud revenue for the company. According to Morgan Stanley’s Keith Weiss, the company’s plans for continuous expansion into 2025 as well as the enlarged portfolio and AI capabilities present great monetizing possibilities.
8. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) is an American multinational corporation and technology company developing new semiconductor technologies, products, and solutions. The company has been leveraging its established presence in data centers to support the growing demand for AI applications.
On November 1st, JP Morgan reiterated an “Underweight” rating on Intel Corporation (NASDAQ:INTC) with a $26 price target. The rating comes after the company reported slightly better September quarter sales albeit lower margins and earnings. The “slightly” better sales come from a recovery in traditional data center demand while PC was muted as expected on customer inventory adjustment headwinds, the analyst tells investors in a research note. According to the firm, Intel “continues to navigate through a challenging period as it right-sizes the company while continuing to move forward with its technology/manufacturing product roadmaps”, and believes Intel’s mid-term 2027 targets, laid out in April, “appear to already be unattainable, without any indications that management likely will update its mid-term guidepost anytime soon.”
7. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 79
Datadog, Inc. (NASDAQ:DDOG) is an American software company that operates an observability and security platform for cloud applications. The enterprise software leader is a player in artificial intelligence with expertise in cloud computing.
On November 1st, Bank of America Securities maintained a “Buy” rating on the stock and a $155.00 price target. The buy rating comes from the company’s anticipated strong performance in the upcoming earnings report, expected to be released on November 7th. Besides the firm expecting favorable results with a projected revenue growth of 25.5% year-over-year for the third quarter indicating a healthy expansion, the insights from AWS’s recent performance suggest an underlying demand for cloud services, a promising indicator for Datadog’s growth prospects. Moreover, promising feedback from major cloud providers also reinforces the company’s ability to meet or exceed expectations.
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company that designs and develops computer processors and graphic technologies. By integrating technology across CPUs, GPUs, and NPUs, it strives to create a strong ecosystem that supports the development of powerful AI applications.
On November 1st, Advanced Micro Devices, Inc. (NASDAQ:AMD) announced that it has signed a memorandum of understanding (MOU) with Fujitsu Limited to form a strategic partnership for creating computing platforms for AI and high-performance computing (HPC). The partnership aims to facilitate the creation of open-source and energy-efficient platforms comprising advanced processors with superior power performance and highly flexible AI/HPC software. The aim is to speed up open-source AI and/or HPC initiatives. Combining Fujitsu’s world-leading supercomputer-based advanced CPU technology with industry-leading AMD GPU technology, the companies will target the joint development of innovative computing platforms for AI and HPC by 2027.
“By combining our cutting-edge AMD Instinct accelerators with Fujitsu’s advanced low-power processors, we are positioned to deliver high-performance and energy-efficient solutions that will benefit our joint AI and HPC customers. Our strategic partnership with Fujitsu not only underscores our commitment to innovation but also highlights our dedication to Japan, where we recognize the importance of local partnerships and expertise. As we continue to expand our relationships in Japan, we are excited about the opportunities to create a more sustainable computing infrastructure that aligns with Japan’s technological leadership and commitment to sustainability”.
-Phil Guido, Executive Vice President and Chief Commercial Officer, AMD.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 165
Alphabet Inc. (NASDAQ:GOOG) is a multinational technology company that wholly owns the internet giant Google, along with other businesses. Google, its subsidiary, has been leveraging artificial intelligence technology for years, from building AI infrastructure to embedding its Gemini AI model tools and chatbot AI technology into its search engine, and much more.
On Thursday, October 31, Alphabet Inc. (NASDAQ:GOOG)’s Google announced a set of features incorporating Gemini, its artificial intelligence chatbot, into its suite of mapping applications. The new category of search results is better able to process open-ended queries, whereas the past version of Googe Maps could only respond to queries with generic results, which were not as accurate. According to Miriam Daniel, vice president in charge of consumer experiences for Google Maps, Gemini is better able to understand context such as time of day, or season. To avoid hallucinations in its responses, the responses from Gemini will be cross-referenced against real-world data that Google has collected.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is considered a leader in AI infrastructure and is a star AI stock. The company has built a comprehensive AI ecosystem spanning graphics, computing, and networking solutions.
On Thursday, October 31, the European Commission stated that the US Chipmaker NVIDIA Corporation (NASDAQ:NVDA) will have to seek EU antitrust clearance for its proposed acquisition of the AI startup Run:ai. The move comes amidst concerns that the acquisition threatens competition in the markets where they operate, and may require Nvidia to offer concessions to secure its approval for the deal. Even though the deal doesn’t meet the EU turnover threshold for mandatory approval, the EU watchdog took up the case after Italy’s competition agency requested it.
“The transaction threatens to significantly affect competition in the markets where NVIDIA and Run:ai are active, which are likely to be at least European Economic Area-wide and therefore include the referring country Italy”.
-EU Commission
In response, NVIDIA Corporation (NASDAQ:NVDA) said it was happy to answer any questions that the regulator may have about the acquisition.
“After the acquisition closes, we’ll continue to make AI available in every cloud and enterprise, and help customers select any system and software solution that works best for them”
-Nvidia spokesperson.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is an American technology company engaged in the design, manufacture, and marketing of smartphones, tablets, PCs, wearables, and accessories worldwide. The company integrates artificial intelligence in many of its popular features, such as Siri, and Face ID, and has also recently launched Apple Intelligence, the company’s personal intelligence system.
Rosenblatt raised the price target on Apple Inc. (NASDAQ:AAPL) to $262 from $261 and kept a “Buy” rating on the shares. According to the analyst, Apple’s fiscal Q4 earnings report demonstrated strength in iPhone sales, even though the December quarter guidance came in slightly below expectations. However, there remains a strong sense of long-term optimism for Apple Intelligence. Overall, the firm says its estimates have seen minimal adjustments following the report.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META) is a technology company that develops applications and technologies to help people connect, find communities, as well as grow businesses. The company is a top Artificial Intelligence player in consumer internet, investing heavily in AI-related infrastructure, technology, and products.
On October 31, Citi analyst raised the price target on Meta Platforms, Inc. (NASDAQ:META) to $705 from $645 and kept a “Buy” rating on the shares after the Q3 report. According to the analyst, Meta continues to gain a share of overall ad budgets, with advertising revenue increasing 20% year-over-year excluding currency, along with ad impressions and pricing growth. Moreover, the firm notes that the engagement gains coming from Facebook and Instagram, driven by Meta’s artificial intelligence recommendation engine, demonstrate the early return from its AI investments that “remains early days”. The firm also recommends investors seize any post-earnings selloff in the shares.
1. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com Inc (NASDAQ:AMZN) is a multinational technology company offering e-commerce, cloud computing, and services such as digital streaming and artificial intelligence solutions.
On November 1st, Truist reiterated a “Buy” rating on the shares and raised the firm’s price target to $270 from $265. The company’s Q3 results surpassed expectations, with particular strength in International growth and profitability, along with a material step up in margins in North American stores & AWS, notes the analyst. The firm also added that the company’s CapEx is pushed to $75 billion this year and $90 billion in 2025 by Amazon’s AI investments and that the management has established credibility to invest in light of the substantial opportunity aggressively.
Overall, AMZN ranks first among the 10 AI News Investors Should Not Miss. 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.
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