Europe is putting itself on the artificial map with France and the United Arab Emirates having agreed to a framework accord for a 1 gigawatt data center dedicated to artificial intelligence. The French presidency said in a statement that the center will be the core of a new AI “campus” and will have up to 1 gigawatt of capacity, “which represents investments of 30 to 50 billion euros”.

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The move is said to be a part of a larger AI agreement signed between French President Emmanuel Macron and his UAE counterpart Sheikh Mohamed bin Zayed Al Nahyan in Paris. President Emmanuel Macron hosted his Emirati counterpart on Thursday.

“The two leaders expressed their desire to create a strategic partnership in the field of AI and committed to exploring collaborations on projects and investments supporting the development of the AI ​​value chain”.

-A joint Franco-Emirati statement.

According to the leaders, the investments would go into both French and Emirati AI and would include buying advanced chips, building data centers, talent development, and establishing virtual data embassies to secure AI and cloud systems in both countries.

France is also going to be hosting the Artificial Intelligence (AI) Action Summit at the Grand Palais on February 10-11, 2025. The country has deemed the summit a “wake-up call” for Europe in the global race for AI.

“The summit comes at exactly the right time for this wake-up call for France and Europe, and to show we are in position” to take advantage of the technology, an official in Macron’s office told reporters.

Attendees at the summit will include Sam Altman, head of OpenAI, Google CEO Sundar Pichai, and Nobel Prize winner Demis Hassabis, who leads the company’s DeepMind AI research unit, amongst many other industry leaders, government officials, and similar figures from around the world.

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. Wearable Devices Ltd. (NASDAQ:WLDS)

Number of Hedge Fund Holders: 3

Wearable Devices Ltd. (NASDAQ:WLDS) is an award-winning pioneer in artificial intelligence (“AI”)-based wearable gesture control technology. On February 7, the company announced that it achieved a groundbreaking advancement in human-computer interaction: Large MUAP Models (“LMM”). Large MUAP Models are AI-powered neural gesture technology that enables personalized, intuitive interactions for the AI and XR era. Albeit still in development, this technology holds the potential to redefine human-device interaction. LMMs work by tapping on big data to enable devices to understand and predict user intentions. This is done with record speed and precision, allowing interactions to be faster and more intuitive than before. LMMs will provide the intuitive, natural interactions needed to interact seamlessly with digital environments, and will have the potential to enhance the company’s products. Once developed, the company also plans on collaborating with leading companies to integrate these LMMs into next-generation extended reality (XR) platforms as well.

“With LMMs, we are decoding the neural alphabet, potentially unlocking a strategically vital technology that fuses human neurology with AI. This breakthrough has the potential to create sci-fi-like superhuman abilities, giving a fundamental edge to whoever masters it first”.

-Guy Wagner, Chief Scientific Officer of Wearable Devices.

9. Marchex, Inc. (NASDAQ:MCHX)

Number of Hedge Fund Holders: 5

Marchex, Inc. (NASDAQ:MCHX) is a conversation intelligence company. On February 7, the company announced its participation in key industry events, including the 2025 IFA Annual Convention, ARS Annual Event, and Authority Brands Summit. The company will be showcasing its conversational intelligence solutions that enable home services and franchise businesses to boost marketing, improve lead conversion, and drive revenue growth. From optimization of marketing campaigns through AI-driven call attribution and automation to lead performance monitoring and enhanced customer satisfaction, Marchex’s AI-driven technology offers several capabilities. Authority Brands, ARS, Neighborly, Two Men and a Truck, and several other industry leaders use Marchex’s AI-driven solutions to analyze voice, text, and other omnichannel interactions that help them optimize their marketing strategies and even recover missed revenue opportunities.

“Franchises and home services businesses are built on customer interactions and trust, yet many still face challenges with driving the right quantity and quality of leads, and converting those into long term customer revenue. Our AI-powered solutions change how home services businesses receive proactive insights from each customer conversation allowing the business owners to focus on growing their business and maintaining viable long term customer relationships.”

-Troy Hartless, Chief Revenue Officer at Marchex.

8. Alpha & Omega Semiconductor Limited (NASDAQ:AOSL)

Number of Hedge Fund Holders: 13

Alpha & Omega Semiconductor Limited (NASDAQ:AOSL) makes power semiconductor products. On February 6, Benchmark raised the firm’s price target on the stock to $42 from $40 and kept a “Buy” rating on the shares. The analyst told investors that fiscal Q2 results were better than expected, but the June quarter revenue outlook is about 2% lower than analyst expectations. The gross profit margin is also driving a miss on the bottom line. Naturally, there has been a negative share reaction after the print, but the firm remains confident in the company’s opportunity to participate across the full Nvidia (NVDA) Blackwell product family. Therefore, it recommends “buying the dip” in Alpha & Omega shares.

7. Cloudflare, Inc. (NYSE:NET)

Number of Hedge Fund Holders: 44

Cloudflare, Inc. (NYSE:NET) is a cloud services provider that powers AI workloads through its Workers AI platform. On February 7, UBS raised the firm’s price target on the stock to $165 from $130 and kept a “Neutral” rating on the shares. The firm noted that Cloudfare’s Q4 performance was a “shade light” given the year-to-date stock performance. Nevertheless, it has demonstrated a modest margin beat, record large and total customer additions, and the first increase in net recurring revenue since Q3 2023. The analyst also told investors in a research note that there are “encouraging signs that confidence is beginning to return,” especially in security modernization and AI projects in the U.S.

6. 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 7, TD Cowen raised the firm’s price target on the stock to $135 from $120 and kept a “Buy” rating on the shares. The price target adjustment follows Fortinet’s strong Q4 results, surpassing key metrics. The analyst highlighted several contributors to the company’s success, particularly demand tailwinds from the current EOS firewall refresh cycle, 6,900 new logo wins, strong execution of Unified SASE and SecOps, and a minor contribution from mergers and acquisitions. The firm also noted that one-fourth of the installed base of FortiGate units is anticipated to require replacement by 2026 due to the EOS refresh cycle. Early indications of heightened through-cycle growth have also been noted. These will likely be driven by the demand for Fortinet’s energy-efficient next-generation firewalls within hyperscale data centers.

5. Pinterest, Inc. (NYSE:PINS)

Number of Hedge Fund Holders: 61

Pinterest, Inc. (NYSE:PINS) operates as a visual search and discovery platform in the United States and internationally. On February 7, Reuters reported that the company forecast first-quarter revenue above estimates. According to data compiled by LSEG, the first-quarter revenue forecast of $837 million to $852 million was above analysts’ average estimate of $832.8 million. This forecast, following better-than-expected record monthly active users and revenue during the fourth quarter owing to a robust holiday shopping season, implies that its AI-powered tools would help increase advertising spending on the platform. Pinterest is using direct response ads that encourage actions such as app downloads or website visits. The company is also investing in AI tools such as its Performance+ suite to improve the targeting of ads. According to CEO Bill Ready, advertisers that were using these tools required 50% fewer inputs to create a campaign.

“Our strategy is paying off. People are coming to Pinterest more often, the platform has never been more actionable”.

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 7, Timothy Arcuri from UBS maintained a “Buy” rating on the stock with a price target of $185.00. Besides UBS, analyst Joseph Moore at Morgan Stanley is also bullish on the stock and calls Nvidia a “top pick”. On February 6th, Moore reiterated an “Overweight” rating on the stock with a $152 price target. He said investors should buy in the DeepSeek dip.

“While sentiment has worsened around potential longer term risks, near term business continues to firm, Blackwell supply visibility continues to build [and] customer desire to spend is clearly on display. We remain very optimistic on how the balance of the year plays out.”

-Joseph Moore

Amongst other things, Moore believes the biggest long-term catalyst for Nvidia goes beyond AI training and into the company’s leadership in the inference market. Inference is a process where trained AI models apply its knowledge to new data and then making predictions or decisions based on that data.

“We remain convinced that Nvidia is the biggest beneficiary of long inference workloads.”

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 5, Alphabet’s Google announced that it has updated its Gemini family of large language models. The updates include a new product line with competitive pricing to low-cost artificial intelligence models like that of Chinese rival DeepSeek. Gemini already offers several versions that vary in price and performance, such as the lightweight variant “Flash”. However, the new “Flash-Lite” model is even cheaper than the previous ones. Particularly on Wednesday, the company released Gemini 2.0 Flash to the general public, launched Flash-Lite, and released a new version of its flagship “Pro” model into test phases. These models come amid DeepSeek’s emergence of cheaper and efficient AI models, even though leading U.S. AI firms are saying that the total cost to develop them must have been magnitudes larger than the company claims.

2. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Investors: 235

Meta Platforms, Inc. (NASDAQ:META) is a global technology company.  On February 7, the company announced the launch of its “Language Technology Partner Program”. This platform stems from Meta’s work with UNESCO to expand the support of underserved languages in AI models, promoting language diversity and inclusivity. The company is currently seeking partners to collaborate with them on advancing and broadening its open-source language technologies, which include AI translation technologies. Underserved languages, particularly in focus, support UNESCO’s work as part of the International Decade of Indigenous Languages. The partners will be working with the company’s AI teams to integrate these languages into AI speech recognition and translation models. These models, once finalized, will be open-sourced.

“Our efforts are especially focused on underserved languages, in support of UNESCO’s work. Ultimately, our goal is to create intelligent systems that can understand and respond to complex human needs, regardless of language or cultural background.”

-Meta wrote in a blog post provided to TechCrunch.

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 7, RBC Capital analyst Brad Erickson raised the firm’s price target on the stock to $265 from $255 and kept an “Outperform” rating on the shares. The analyst told investors in a research note that the company’s Q4 results were mixed with a slight miss on third-party seller services and advertising revenues. There is also an implied $100B+ capex guide. These factors outweigh the company’s solid figures from Amazon Web Services (AWS) and continued EBITDA outperformance. The firm also stated that Amazon.com shares are “crowded” and the AI “spend money to make money” debate will undoubtedly continue, but AWS’s high margin growth and further network cost efficiencies will help the company grow its earnings at a level that justifies its valuation.

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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