The United States is stepping up its efforts to prevent the illegal diversion if its advanced artificial intelligence chips to China. In latest news, sources have revealed that the country has placed location tracking devices in targeted shipments of its chips. These chips, they believe, are at high risk of illegal diversions.
The move aims to proactively detect AI chips being diverted to locations which are under US export restrictions. The sources reveal that these tracking devices apply only to select shipments under investigation.
Through the trackers, the government will be able to build cases against parties who profit from violating U.S. export controls. It is said that the trackers are typically hidden in the packaging of the server shipments. However, it is not known which parties have been involved in installing them and where they were put in along the shipping route.
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 Q1 2025.
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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10. Pony AI Inc. (NASDAQ:PONY)
Number of Hedge Fund Holders: 13
Pony AI Inc. (NASDAQ:PONY) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, the company announced its unaudited financial results for the second quarter ended June 30, 2025. It announced producing over 200 Gen-7 robotaxi vehicles as of August 11, which positions it well on track to reach its target of 1,000 vehicles by year-end.
The company’s second-quarter revenues increased 76% year-over-year to $21.5 million, attributed largely to its robotaxi services and licensing revenues. Robotaxi services revenues grew 158% to $1.5 million, whereas fare-charging revenues increased over 300%.
PONY AI reports beginning mass production of its Gen-7 robotaxi models in June and July via partnerships with Guangzhou Automobile Group and Beijing Automotive Industry Corporation. Its fully-driverless commercial robotaxi services are operated across China’s four tier-one cities; whereas it has also expanded operations to Dubai, South Korea, and Luxembourg.
“This quarter marked a significant milestone in our journey toward large-scale production and deployment, further solidifying our leadership in the Robotaxi industry. Since mass production started two months ago, over 2001 Gen-7 Robotaxi vehicles have rolled off the production line, putting us firmly on track to hit the year-end 1,000-vehicle target. Our robust Robotaxi revenues more than doubled, with fare-charging revenues surging by over 300% year-over-year. The path toward positive unit economics is also clear, as we made substantial improvements in key cost items such as remote assistance and vehicle insurance. These achievements are underpinned by our rapid scaling and operational breakthroughs in all four tier-one cities in China, coupled with expanded presence in Dubai, South Korea and Luxembourg. As we enter the second half of this pivotal year of mass production, we are driving strongly toward positive unit economics and accelerating our multi-year growth trajectory.”
– Dr. James Peng, Chairman and Chief Executive Officer of Pony.ai.
Pony AI Inc. (NASDAQ:PONY) specializes in autonomous mobility, offering AI-driven robotruck and robotaxi services, intelligent driving software, and vehicle integration solutions.
9. BigBear.ai Holdings, Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 17
BigBear.ai Holdings, Inc. (NYSE:BBAI) ) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, H.C. Wainwright analyst Scott Buck lowered the price target on the stock to $8.00 (from $9.00) while maintaining a Buy rating. The price target cut follows BigBear.ai’s second quarter results which it posted after the markets closed on August 11th.
The firm discussed how the artificial intelligence company’s revenue of $32.5 million was significantly below its $41 million estimate. BigBear.ai also lowered its full-year revenue guidance to $125.0M to $140.0M, down from $160.0M and $180.0M. The firm considers this low guidance to be because of lower 2Q25 revenue coupled with disruptions in federal contracts, particularly in programs supporting the U.S. Army.
The firm acknowledged that these results are disappointing, but also pointed out that they shouldn’t come as a surprise.
“While disappointing, these results should not come as a surprise given what we have heard from other reporting peers in the defense space, which have also experienced program delays. We believe revenue visibility could begin to improve as the business moves towards 2026.”
The firm also considers BigBear.ai to be a beneficiary of the One Big Beautiful Bill.
“Longer term, we believe BigBear.ai is well positioned to be a beneficiary of the One Big Beautiful Bill, which substantially increases investment in areas aligned with the company’s core competencies. This includes $170.0B of incremental funding to the Department of Homeland Security. In addition, the company solidified its balance sheet during 2Q25, ending the quarter with more than $390.0M of available cash. We expect this capital to be deployed in coming quarters, through reinvestment in the business as well as complementary M&A. While we expect shares to respond negatively to 2Q25 results and change in guidance, we see an improved balance sheet and favorable industry and legislative trends as catalysts for long term growth. As a result, we suspect operating results and outlook should look materially stronger a year from now. We recommend investors take advantage of any near term weakness in BBAI shares to accumulate a position ahead of more favorable operating results. We remain Buy-rated but ave lowered our price target to $8 from $9, reflecting our lower 2026 revenue forecast.”
BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions for national security, digital identity, supply chain and logistics, enterprise operations, and manned-unmanned teaming in autonomous systems.
