US President Donald Trump struck massive deals last week in numerous avenues during his Middle East tour. Saudi Arabia’s sovereign wealth fund, Public Investment Fund, established AI startup Humain, with US companies Nvidia, AMD, and Qualcomm announcing numerous deals to supply chips and partner on AI infrastructure.
Wedbush analysts have been calling this a “watershed moment” for Big Tech companies. That’s right, these recent developments in the region mean the AI boom might be rapidly shifting its center of focus. Moreover, these investments in AI infrastructure across Saudi Arabia and other Middle Eastern countries signify an acceleration in U.S. tech companies’ expansion abroad.
READ ALSO: 12 AI Stocks on Analysts’ Radar and 15 AI Stocks Surging on News and Analyst Ratings.
Noting these investments, analysts led by Dan Ives said that the region is poised to become one of the most important global markets for AI over the next decade, boasting the potential to add over $1 trillion.
“We believe the market opportunity in Saudi Arabia and UAE alone could over time add another $1 trillion to the broader global AI market in the coming years,” the note said, “and this dynamic is not being priced into the market and tech names in our view.”
The firm further said how it is becoming “crystal clear” that the “AI Revolution has found its next major area of penetration…the Middle East.”
“[That announcement] is the start of a new era of growth for the US tech sector and a gamechanger for the industry. Riyadh and UAE will be a major buyer of AI chips, software, autonomous/robotics, and datacenters over the next decade.”
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. CoreWeave, Inc. (NASDAQ:CRWV)
Number of Hedge Fund Holders in Q4 2024: 0 (Due To IPO in Q1 2025)
CoreWeave, Inc. (NASDAQ:CRWV) is a cloud platform provider that provides equipment for AI and other computing purposes. On May 21, Citi analyst Tyler Radke kept a “Neutral” rating on the stock and more than doubled the price target from $43.00 to $94.00. The price target change follows CoreWeave’s first quarter financial results and guidance last week, along with its $4B deal with OpenAI, which also motivated investors.
“Overall we think the print reinforces CoreWeave’s high-growth status, especially with recent $4B OpenAI expansion deal, and likely assuages investor concerns around AI capex/infrastructure slowing. Shares have gone vertical … While we’d argue a portion of the re-rating is justified, given strong Azure/hyperscaler numbers and capex, we reiterate our Neutral/High Risk rating as we’d like to see more progress on profitability and more customer diversification.”
-Citi analysts, led by Tyler Radke, in a Wednesday investor note.
The hyperscalers’ second quarter and full-year guidance also came in ahead of consensus estimates. These results point at a strong demand for AI data centers.
“The FY guidance came in at $5B, or 161% Y/Y at the midpoint, 8pts ahead of our/street estimates, which was considerably higher than the 1Q beat and shows the company’s confidence in the increase of demand signals,” Radke added.
9. Navitas Semiconductor Corporation (NASDAQ:NVTS)
Number of Hedge Fund Holders: 13
Navitas Semiconductor Corporation (NASDAQ:NVTS) is a small-cap chip designer. Its next-generation power solutions support energy-efficient AI data centers. On May 21, the pure-play, next-generation power semiconductor company announced its latest 12 kW power supply unit (PSU) for hyperscaler AI data centers. The PSU is designed for high-power rack densities of 120 kW and complies with Open Rack v3 (ORv3) specifications and Open Compute Project (OCP) guidelines. It is designed to ensure the highest efficiency and performance, along with the lowest component count. In simple words, Navitas’ new power supply unit is faster, safer, and more efficient. This makes it an ideal choice for powering the next generation of AI-driven data centers.
“The continuation and leadership of Navitas’ AI power roadmap has seen a quadrupling in output power – from 2.7 to 12 kW – in just over 24 months. This increase in power delivery is vital for the world’s data centers to support the exponential power demanded by the latest GPU architectures. The ‘designed for production’ PSU enables our customers to quickly implement a highly efficient, simple, and cost-effective solution to address the power delivery challenges for AI and hyperscale data centers.”
-Gene Sheridan, CEO and co-founder of Navitas.
