Investors in the artificial intelligence trade have been frantic ever since the tariff frenzy started. Particularly on April 2, dubbed Liberation Day by President Donald Trump, the administration announced sweeping tariffs that led to significant market volatility and a sharp downturn in stock indices.
While the President may strive to make the United States the “world capital” of artificial intelligence, the aggressive trade and tariff moves that have since followed have been threatening the crucial technology and weakening competition with China.
Executives and experts in AI and data center construction have been worried about how trade levies would significantly increase the cost of constructing, equipping, and operating the data centers that will, in turn, power AI development.
READ ALSO: 10 AI Stocks in the News Today and 10 AI Stocks in the Spotlight This Week.
Fast forward to earnings reports from some of the Big Tech, and it can be noted how investors have been worried more than necessary about the AI trade. Meta and Microsoft, in particular, reported strong quarterly results that demonstrated how artificial intelligence progress won’t necessarily slow amid economic turmoil.
“Few stocks are truly immune to Trump tariffs [and] trade war, but AI is a lot less impacted than investors currently believe. We’re early in a very steep growth curve right now, and that goes for AI infrastructure.”
-Jed Ellerbroek, portfolio manager at Argent Capital Management.
What happens next to AI stocks largely depends on what’s next for tariffs. If it’s better than expected, these and other AI stocks may climb and lift valuations. On the other hand, if tariffs seem high, these stocks could fall further.
Nevertheless, strong companies, particularly the likes of Nvidia and Palantir, are likely to win over the longer term due to their smart innovations. According to Wells Fargo’s Christopher Harvey, it may be time for investors to reenter the trade.
“The group’s risk/reward today is much more attractive than a year ago. We remain in a durable AI investment super cycle.”
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. The hedge fund data is 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).
10. BigBear.ai Holdings, Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 13
BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions. On May 6th, the company announced a collaboration with Hardy Dynamics, a provider of advanced AI capabilities for defense applications, to support a U.S. Army initiative under Project Linchpin. Project Linchpin is a U.S. Department of Defense (DoD) effort integrating artificial intelligence and machine learning (AI/ML) into future warfighting capabilities. Through the collaboration, BigBear.ai will work as a subcontractor that will help develop next-generation AI technologies. These technologies will enable secure, resilient communication and coordination among unmanned aerial systems. Hardy Dynamics will leverage BigBear.ai’s AI, data, and sensor orchestration platform, ConductorOS, to enable interoperability between various autonomous systems.
“In supporting the U.S. Army’s Project Linchpin, BigBear.ai is advancing the frontiers of AI-powered operations across the defense ecosystem. We are excited to work with Hardy Dynamics to deliver mission-focused, scalable solutions to meet the evolving needs of our warfighters, where they operate. Most importantly, this collaboration is directly aligned to the U.S. Secretary of the Army and Chief of Staff of the Army’s joint Letter to the Force: Army Transformation Initiative, which prioritizes the delivery of warfighting capabilities including ‘close the C-sUAS capability gap’ and ‘Command and control nodes will integrate Artificial Intelligence to accelerate decision-making and preserve the initiative.’ We are at the forefront of this transformation and will deliver.”
-Kevin McAleenan, CEO of BigBear.ai.
9. Strategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 25
Strategy Incorporated (NASDAQ:MSTR) (formerly MicroStrategy Incorporated), offers AI-powered enterprise analytics software and services. Strategy World 2025, the annual flagship conference by the company, officially began on May 5th at the Signia by Hilton and Waldorf Astoria Bonnet Creek in Orlando, Florida. More than 1500 attendees from the world’s leading companies gathered at the conference to discover the latest developments in AI-powered digital information and digital asset strategies.
“Strategy World is where vision meets execution. Bitcoin and AI are the two most transformative technologies of our time, and we’re empowering the world’s forward-thinking organizations with the tools, insights, and technologies they need to lead in the digital age.”
-Phong Le, President & CEO of Strategy.