The United States may be imposing restrictions on China to curb its dominance in artificial intelligence, but China is determined to press forward regardless. Two of the largest tech giants in the country, Tencent and Baidu, reveal some of the business methods that they are using to keep up in the AI race.
According to the companies, stockpiling chips, making AI models more efficient, and using homegrown semiconductors are some methods that are helping them keep up. The US President may have abolished a Biden-era rule related to chip exports, but it also restricted exports of some semiconductors from names such as Nvidia and AMD.
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Nevertheless, history has shown how these rules have been futile, with DeepSeek and similar models from China creating havoc in the tech world.
Martin Lau, president of Tencent, has revealed that his company has a “pretty strong stockpile” of chips that the company previously purchased. Lau noted that, contrary to popular belief, the company has been able to achieve good training results with only a small group of chips.
“That actually sort of helped us to look at our existing inventory of high-end chips and say, we should have enough high-end chips to continue our training of models for a few more generations going forward,” Lau said.
Lau further noted that they are looking into using smaller models that don’t need such large computing power. They are also able to use custom-designed chips and semiconductors currently available in China.
Meanwhile, the Chinese internet services company is using “full-stack” capabilities, a combination of its cloud computing infrastructure, AI models, and the actual applications based on those models, such as its ERNIE chatbot, to keep up.
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10. Informatica Inc. (NYSE:INFA)
Number of Hedge Fund Holders: 23
On May 27, RBC Capital’s analyst Matthew Hedberg maintained their “Sector Perform” rating on Informatica Inc. (NYSE:INFA) and raised its price target to $22.00 from the previous target of $19.00. Informatica is a leader in enterprise AI-powered cloud data management.
Analyst Matthew Hedberg cited Friday’s Bloomberg report of takeover interest by Salesforce (CRM), noting that Informatica could be an attractive asset given key fundamental drivers. This includes the ongoing growth in data, the ongoing cloud mix-shift, and potential GenAI tailwinds.
The very same day, the news of Salesforce and Informatica agreeing for the former to acquire the latter for approximately $8 billion in equity value was confirmed on the respective companies’ newsrooms. The acquisition is expected to boost Salesforce’s artificial intelligence capabilities and give access to Informatica’s data management tools.
“Together, Salesforce and Informatica will create the most complete, agent-ready data platform in the industry. By uniting the power of Data Cloud, MuleSoft, and Tableau with Informatica’s industry-leading, advanced data management capabilities, we will enable autonomous agents to deliver smarter, safer, and more scalable outcomes for every company, and significantly strengthen our position in the $150 billion-plus enterprise data market.”
-Marc Benioff, Chair and CEO of Salesforce.
9. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 63
On May 27, Citi reaffirmed its Buy rating for Dell Technologies Inc. (NYSE:DELL) and set a price target of $128. Dell Technologies provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
The firm has introduced an optimistic 90-day short-term outlook for Dell shares. The optimism is because the firm sees an improving GB200 demand profile, “showing a marked improvement.” Moreover, a leading Dell supplier has pointed out an improvement in GB200 NVL72 ramp beginning in May. This improvement is expected to contribute to a projected 50% year-over-year growth in Dell’s artificial intelligence server revenues in 2025.
Overall, the firm views upside for Dell shares ahead of earnings this week, with improved demand for Nvidia’s GB200 AI super chip, which Dell uses.
“We open a ST [short term] Upside View on DELL shares on improving GB200 demand profile, showing a marked improvement.”
8. Amphenol Corporation (NYSE:APH)
Number of Hedge Fund Holders: 69
On May 27, Citi raised the firm’s price target on Amphenol (APH) to $100 from $85 and kept a “Buy” rating on the shares. Amphenol Corporation designs, manufactures, and markets electrical, electronic, and fiber optic connectors. The firm also introduced a “90-day short-term positive outlook” on the stock, citing growing demand for connectors on NVLink Fusion.
The analyst told investors in a research note that an improving artificial intelligence outlook and expansion of Nvidia’s proprietary interconnect technology, NVLink, to other manufacturers is likely to improve the demand for current high-speed, low-latency connectors that are used in the existing Nvidia-based GB200 AI systems.
This is good news for connector companies such as Amphenol, which has a leading share in the high-speed low low-latency interconnect market.
7. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 73
On May 27, JPMorgan analyst Harlan Sur reiterated an “Overweight” rating on Marvell Technology, Inc. (NASDAQ:MRVL) with a $130.00 price target. Heading into Thursday’s earnings report, analyst Harlan Sur is optimistic about the company’s quarterly performance.
In particular, Sur anticipates a steady uptick in volume for its AI ASIC programs, robust demand for 800G products, and the initial ramp of 1.6T optical DSPs.
These trends are in turn expected to drive cyclical recovery in its enterprise and carrier segments. April quarter results are projected to reach around $1.875 billion, and guidance for the July quarter is estimated to exceed $2.00 billion; both aligning with the firm’s consensus estimates.
One particular segment anticipated to demonstrate solid growth is the datacenter segment. Cyclical improvements and new product cycles will also positively benefit Marvell.
Sur also noted momentum in Marvell’s custom ASIC partnerships. He highlighted Amazon’s ongoing production ramp with the Trainium 2 AI XPU ASIC, the expected high-volume ramp of the Trainium 3 program in 2026, and also Marvell’s Microsoft AI ASIC MAIA Gen 2 program, which is expected to ramp in the same year.
The firm noted how the company’s AI ASICs and networking revenues could reach $4 billion this year. Last but not least, Sur anticipates that Marvell’s custom datacenter and AI ASIC pipeline, including SmartNIC/DPU ASIC chips and eSSD controller ASICs, will be key contributors to long-term growth.
6. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 90
On May 27, Evercore ISI analyst Amit Daryanani raised the firm’s price target on Vertiv Holdings Co (NYSE:VRT) to $150 from $100 and kept an “Outperform” rating on the shares. Vertiv Holdings Co (NYSE:VRT) offers digital infrastructure technology and services for data centers, communication networks, and commercial and industrial facilities.
According to the firm, Vertiv appears to be a strong option for investors who wish to benefit from the growth in artificial intelligence data centers, including hyperscale facilities. With data centers growing more complex by the minute, Vertiv’s services are very likely to become critical to their operation.
This is why the firm believes that Vertiv’s stock “looks like a compelling way for investors to play secular trends related to AI data centers” and is “the best-positioned company to benefit from the AI tailwinds” on the data center physical infrastructure side.
Vertiv is seen as a comprehensive provider based on its capabilities in liquid cooling, servicing, and lifecycle management. The transition towards liquid cooling is likely to result in growth for Vertiv. Meanwhile, the company is also recognized for its opportunities in power management.
This is especially true now that AI data centers are demanding more equipment and shifting towards higher voltage infrastructure. The firm expects integrated systems and modular solutions to bring sustained leverage and margin expansion.
5. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 104
One of the most notable analyst calls on Tuesday, May 27, was for Tesla, Inc. (NASDAQ:TSLA). Tesla is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
UBS analyst Joseph Spak reiterated a “Sell” rating on the stock with a $190.00 price target. The firm stated that its survey checks showed declining interest in Tesla and EVs.
According to the UBS survey, the U.S. market is saturated, there are limited models, and also affordability issues. Meanwhile, there is rising competition in China, and Tesla is no longer seen as a technology leader, while in Europe, there is possible brand damage linked to Elon Musk’s politics.
To conclude, the firm remains cautious on the stock despite all the excitement around Tesla’s robotaxis and robotics ventures. The core auto business faces risk, particularly with potential regulatory changes in California.
“Survey shows declining interest in EVs and the Tesla brand around the world.”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
One of the most notable analyst calls on Tuesday, May 27, was for Apple Inc. (NASDAQ:AAPL). Apple is a technology company known for its consumer electronics, particularly the iPhones and MacBooks.
Morgan Stanley analyst Erik Woodring reiterated an “Overweight” rating on the stock with a $235.00 price target.
As per the analysts, a 25% tariff on the iPhones imported into the United States is not likely to drive the company to reshore its production.
“While ‘time to market’ of a U.S.-produced iPhone is one major impediment, our math says a 25% tariff on iPhone imports isn’t enough incentive for Apple to reshore U.S.-bound iPhone production.”
Moreover, they believe that building iPhone assembly plants in the US is likely to take “a minimum of 2+ years, and several billions.”
Tariff concerns were reignited last week when US President Donald Trump threatened Apple and other smartphone makers with a 25% tariff if they don’t manufacture their phones in the United States.
However, Morgan Stanley stated that the economics still favor overseas manufacturing.
“A U.S.-produced iPhone would be 35% more expensive than a China/India-produced iPhone, much more than the 4-6% price hike needed to offset a 25% import tariff.”
However, Apple’s defiance may come at a certain cost.
“CEO Tim Cook’s status with the current administration deteriorates from here. Is a 50% tariff enough to shift production to the U.S.?”
Albeit the pressure, the firm also hinted at how Apple could neutralize the threat with further U.S. investment. This will be part of its previously announced $500 billion commitment.
3. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 162
On May 27, Goldman Sachs analyst Kash Rangan reiterated a “Buy” rating on Salesforce, Inc. (NYSE:CRM) with a $340.00 price target. Salesforce is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce.
Despite its popularity, Rangan believes that Agentforce’s revenue contribution isn’t likely to be very material heading into earnings. Artificial intelligence is going to be a key topic of conversation, but significant updates on revenue contribution for Salesforce may not be until the Dreamforce event on October 14, 2025.
The company is anticipated to report a 7% increase in revenue, a 10% rise in current remaining performance obligations (cRPO), a non-GAAP operating margin (OpM) of 33%, and a non-GAAP earnings per share (EPS) of $2.56. The firm believes that Salesforce will maintain net new revenue levels comparable to fiscal year 2024.
Moreover, even though there are certain challenges such as the Department of Justice’s oversight, small and medium-sized business execution, and transitions in the CFO/COO roles, stable software spending trends and the company’s strategic long-term investments will likely help Salesforce increase its market share.
“We reiterate our Buy rating and $340 price target on Salesforce ahead of F1Q26 earnings (5/28). While artificial intelligence likely remains a focal point, we don’t anticipate material updates on Agentforce’s revenue contribution until Dreamforce (10/14). In the meantime, we look toward other strength points from Data Cloud and AI (>$900 million annual recurring revenue). Heading into earnings, we expect revenue +7%, current remaining performance obligations +10%, non-GAAP operating margin of 33%, and non-GAAP EPS of $2.56. We feel comfortable with these and for Salesforce to exit FY26 at similar net new revenue levels as FY24, where overhangs from an elevated investment period can be comparable to FY26’s perceived risks. We believe current guidance (+7–8% growth) and stock performance year-to-date (−17% vs. Nasdaq flat) has adequately accounted for: 1) Incremental pressure to Public Sector ($5.7 billion ARR in F4Q25) associated with DOGE, 2) Small/Medium Business and Create-and-Close execution, 3) CFO/COO transition. With broader software citing largely stable spending trends, we see Salesforce well-positioned to capture greater wallet share with the maturation of strategic long-term investments, coupled with emerging product momentum that could compound and support revenue re-acceleration. We further note F1Q cRPO growth is typically not a material forward indicator and see limited upside to Street expectations (10% YoY constant currency), whereas F2Q cRPO guidance will likely be a focal point. Despite modest incremental FX tailwind, we don’t expect an upward revision to FY26 revenue. We continue to see Salesforce capable of delivering durable growth, 35%+ operating margin, and achieving $17–18 free cash flow per share in FY27, offering a compelling risk/reward at 17x EV/CY26 free cash flow (vs. peers’ ~28x).”
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 212
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
On May 27, Analyst Joseph Moore of Morgan Stanley maintained a “Buy” rating on NVIDIA Corporation (NASDAQ:NVDA) and retained the price target of $160.00.
Moore’s rating reflects optimism in Nvidia’s stock despite the challenges it is currently facing. In particular, the company has been dealing with the H20 chip ban, where it is not allowed to sell its H20 chip to China.
The ban has been impacting Nvidia’s sales to the country, which has not been completely accounted for in consensus estimates. It has also led to a significant inventory write-down, the firm noted. However, it is expected of Nvidia’s management that they mitigate this impact by improving other products’ supply, such as the Blackwell line.
Moore also noted how the H20 ban is a short-term headwind, but demand for other products is still robust. Blackwell products have supply constraints, which are expected to ease. Major tech companies such as Amazon and Microsoft have also given out positive comments regarding growth trends, which further reiterate Moore’s optimistic outlook.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
One of the most notable analyst calls on May 27, Tuesday, was for Microsoft Corporation. TD Cowen reiterated the stock as “Buy” and raised its price target on the stock to $540 per share from $490. Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
According to analyst Derrick Wood, annual recurring revenues at Azure AI, which are a suite of cloud-based AI services, could boost from $4 billion in 2024 to around $24 billion in 2026. Wood said this leap was “conservative with solid room for upside.”
He further stated that Azure growth will be boosted as AI revenue accelerates development in the Azure model, particularly OpenAI’s contribution.
“As AI revenue is rapidly building in the Azure model, especially OpenAI’s contribution, we think this will start to put stronger upward pressure on total Azure growth. We think a return to Azure upside trends and firmer growth in the mid-30% level should help drive a stronger narrative around Azure and greater fund flows back into MSFT. ”
While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about this cheapest AI stock.
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