Speaking on CNBC’s “Halftime Report”, CEO of Ritholtz Wealth Management and CNBC PRO contributor Josh Brown said that he believes the most important theme for the stock market right now is artificial intelligence, not tariffs.
“The most important thing to come out of this past earnings report is that AI is more important than tariffs to the stock market.”
Brown cited JPMorgan research, noting that the term “AI” was mentioned 2.6 times more often than the word “tariff” in the last round of S & P 500 earnings reports.
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He even said that those Big Tech companies that affirmed or raised guidance have been saviors, protecting the stock market from the massive turmoil in April.
“This is an AI driven tape. This is still the most important theme in the entire market. Yes, there are other themes. Yes, there are other sectors doing well, but absent AI, there’s just no chance that we would have pulled this this spring out of the hole the way that we have, and that’s because of the affirmed guidance.”
That said, a report from Silicon Valley Bank has revealed how venture capital firms focused on artificial intelligence are behind much of the growth in the startup market. Meanwhile, companies in other areas are struggling to raise cash.
“Exclude AI investment and the story changes. There is no meaningful uptick for companies not leveraging AI, with investment from this group essentially flat for the last year.”
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. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 27
SAP SE (NYSE:SAP) is a leader in ERP software that leverages artificial intelligence to enhance its enterprise resource planning (ERP) solutions. On Tuesday, May 20, Wells Fargo initiated coverage on the stock, assigning an “Overweight” rating and setting a price target of EUR345.00. According to the firm, SAP “stands out as a defensive horizontal story,” with the company’s cloud migration momentum having the ability to reaccelerate growth for the company and bridge the margin gap it has relative to its mature peers. All in all, SAP holds a favorable profile in the software sector despite operating in an uncertain macroeconomic environment.
In other news, SAP has recently unveiled major AI innovations centered on its Joule AI assistant at SAP Sapphire, one of the most significant annual events in the tech world. The company has introduced an expanded library of Joule Agents, intelligent business applications, and an operating system for AI development to enhance productivity. SAP has also announced partnerships with Perplexity and Palantir to improve its business AI capabilities.
9. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 48
HP Inc. (NYSE:HPQ) is a technology company that specializes in personal computing and printing solutions. The company has recently been a part of a major announcement made at Alphabet Google’s annual I/O conference in Mountain View, California. Sundar Pichai, CEO of Google and Alphabet, showcased Google Beam, a “new AI-first video communications platform” that makes video chats feel like they are taking place in person. Google Beam has been developed in partnership with HP and will be coming to users later this year. According to Pichai, the product transforms 2-D video into realistic 3-D renderings. It has six cameras that can capture users from different angles. The technology merges the six feeds using artificial intelligence and evolves the user into a 3-D-life-like display.
“The result is a much more natural, and deeply immersive conversational experience.”
