Elon Musk recently sparked skepticism in the AI community by claiming that companies funding the Stargate initiative lack the funds to do so. The Stargate initiative is a $500 billion artificial intelligence project recently announced by President Donald Trump. The project aims to build new AI data centers in the US.
Three prominent figures in the initiative are SoftBank CEO Masayoshi Son who will handle the financing, CEO Sam Altman of OpenAI who will be contributing his overall AI expertise, and Oracle executive chairman Larry Ellison who will oversee the buildout. All three joined President Trump on January 21 when he made the Stargate announcement.
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Musk has claimed that this initiative doesn’t have the necessary funding in place, which in turn sparked a dispute between him and Sam Altman. Altman has refuted Musk’s claim, asserting that the funding is in place and that the work has already started. Larry Ellison, in particular, has noted that 10 data centers, each 500,000 square feet, are already under construction in Abilene, Texas, and that 10 more are in the pipeline.
Musk is currently leading Trump’s new government efficiency advisory board, DOGE. He also shares a tense relationship with Altman and is engaged in an ongoing lawsuit with OpenAI. In response to Musk’s claims, Trump answered questions from reporters at the White House, dismissing the criticism. Trump was asked if Musk’s criticism of the deal was a bother to him.
“It doesn’t. He hates one of the people in the deal,” Trump said of Musk. “People in the deal are very, very smart people. But, Elon, one of the people he happens to hate. I have certain hatreds of people, too”.
-President Donald Trump, as reported on Reuters.
Regarding the claims regarding the insufficient funding, Trump said that he doesn’t know but he hopes that they do.
“I don’t know if they do, but you know, they’re putting up the money. The government’s not putting up anything, they’re putting up money. They’re very rich people, so I hope they do”.
A Trump adviser also wondered whether the public dispute may imply an end for Trump and Musk.
“The end may be in sight,” the adviser said.
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.
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10. Aurora Innovation, Inc. (NASDAQ:AUR)
Number of Hedge Fund Holders: 22
Aurora Innovation, Inc. (NASDAQ:AUR) is a self-driving technology company. On January 27, Business Insider reported that Cantor Fitzgerald analyst Andres Sheppard shared in a research note with investors that Aurora Innovation released its driverless operations report on January 23. According to the report, the company’s Autonomy Readiness Measure has now reached 97% as of October 2024. The Autonomy Readiness Measure tracks progress toward closing their safety case. Aurora claims that it is not going to launch driverless operations until their safety case is closed. Based on this, Cantor Fitzgerald stated that it remains bullish on self-driving trucks and that Aurora is among the best-positioned in the industry.
9. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 25
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers. On January 27, Piper Sandler raised the firm’s price target on Bloom Energy (BE) to $33 from $30 and kept an “Overweight” rating on the shares. A recent report from Bloom Energy has highlighted that by 2030, an expected 55 gigawatts (GW) of artificial intelligence (AI) data center capacity could come online in the U.S. This could in turn open up abundant opportunities for Bloom Energy, given its use of solid oxide fuel cells for building a modular power-generation platform that can provide constant on-site power. Harrison is positive on Bloom considering this report and stated that Bloom Energy is “well-positioned” to outperform in 2025 driven by several factors, particularly data center demand.
8. Semtech Corporation (NASDAQ:SMTC)
Number of Hedge Fund Holders: 32
Semtech Corporation (NASDAQ:SMTC) designs and markets analog and mixed-signal semiconductors, IoT solutions, and advanced algorithms. On January 29, Benchmark Co. analyst Cody Acree reiterated a “Buy” rating on Semtech and set a price target of $82.00. The buy rating is largely on the back of Semtech’s key product win in Nvidia’s Blackwell platform. Semtech’s CopperEdge CTLE, a key networking component in Nvidia’s AI infrastructure, is the key product that has won it a buy rating. This product costs less and utilizes less power compared to other alternatives, positioning SemTech as a major beneficiary of the AI boom. UBS also initiated a Buy rating on the stock on January 17, stating how the CopperEdge CTLE is a cost-effective solution for reducing noise in AI data center networking.
7. Astera Labs, Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holders: 39
Astera Labs, Inc. (NASDAQ:ALAB) is engaged in the design, manufacture, and selling of semiconductor-based connectivity solutions for cloud and AI infrastructure. On January 28, Morgan Stanley analyst Joseph Moore lowered the firm’s price target on the stock to $114 from $142 and kept an “Equal-Weight” rating on the shares. The analyst said that the emergence of DeepSeek and its advancements in artificial intelligence are impressive and could have “deflationary” impacts. It further said that even though the stock market reaction itself was surprising, the real area of focus should be what happens after. The broad market sell-off could lead to actions such as tighter controls, or even reduced spending. Morgan Stanley has therefore trimmed its price targets for semiconductor suppliers exposed to AI but remains positive on the group.
6. Celestica Inc. (NYSE:CLS)
Number of Hedge Fund Holders: 40
Celestica Inc. (NYSE:CLS) offers a range of product manufacturing and related supply chain services. On January 28, TD Securities raised the firm’s price target on the stock to $107 from $70 and kept a “Buy” rating on the shares. According to the firm, the share price of Celestica already reflects a cautious view of DeepSeek’s models on AI infrastructure spending. Even though there are several uncertainties regarding these advancements, the broad market sell-off was largely “overdone”. As such, the firm believes there is potential for growth in the stock if AI costs decrease with the adoption of models like DeepSeek’s.
5. Dynatrace, Inc. (NYSE:DT)
Number of Hedge Fund Holders: 45
Dynatrace, Inc. (NYSE:DT) provides a software intelligence platform for monitoring and optimizing applications, infrastructure, and user experiences. On January 28, Jefferies analyst Brent Thill maintained a “Buy” rating on the stock with a price target of $65. The buy rating for the stock reflects Dynatrace’s strategic positioning and growth potential. The firm stated that Dynatrace has several market opportunities to capitalize on, particularly in AI observability. The company’s strong technological foundation, featuring Smartscape topology mapping and Davis hypermodal AI, can help expand the market and boost revenue. These tools are helping the company monitor, analyze, and optimize IT environments, especially artificial intelligence observability. Multiple growth levers, such as the rollout of the DPS consumption pricing model and enhancements in sales strategies, are also expected to contribute to growth. Even though the timing of deal closures and the adoption of new models such as DPS have some uncertainties surrounding them, the company’s strategic initiatives will bolster long-term revenue growth.
4. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 61
Cisco Systems, Inc. (NASDAQ:CSCO) is an American technology company that provides information technology and networking services. On January 28, Exane BNP Paribas analyst Karl Ackerman upgraded the stock to “Outperform” from Neutral with a price target of $72, up from $57. According to the firm, several catalysts are playing out in favor of Cisco Systems. These catalysts have the potential to boost Cicso’s revenue and earnings growth ahead of expectations. The analyst also told investors in a research note that ethernet “will start to flourish” in backend artificial intelligence networks this year. As such, the firm is “encouraged” to see Cisco’s growing presence at Meta Platforms with the 8501 switches that should begin to ramp in volume in Q1.
3. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 64
Hewlett Packard Enterprise Company (NYSE:HPE) is an American multinational technology company that provides high-performance computing (HPC) systems, AI software, and data storage solutions for running complex AI workloads. On January 28, Evercore ISI reaffirmed its “In-Line” rating and $22.00 price target for the stock. According to the firm, both HP Enterprise and Juniper shares are under pressure after there were alleged reports from Capital Forum that the DOJ could seek to block the pending acquisition of Juniper. HPE has been engaged with the DOJ in their review of the deal and previously reported during their recent earnings calls that the acquisition was expected to close in the “early part” of the calendar year 2025. The analyst pointed out that this was in the later part of the management’s original expectations. Currently, investor focus is going to remain on whether HPE is successful in gaining DOJ’s approval for the Juniper acquisition. Once that is over, the firm views the company as “fundamentally well positioned” to benefit from share gains in AI servers. It’s also well-positioned for sustained gradual recovery in x86 servers and self-help in its storage business, the firm noted.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that has recently launched Apple Intelligence, its intelligence system. One of the biggest analyst calls on Wednesday, January 29, was for Apple Inc. Oppenheimer downgraded the stock to “Perform” from “Outperform” and removed its $250 price target on the stock. The ratings, issued ahead of its earnings on January 29, quoted a “weaker outlook” for iPhone sales in the next 12 to 18 months, a lack of AI innovation, and challenges in the Chinese market. The analyst also expects a slower-than-expected iPhone replacement cycle heading into fiscal 2026. In this period, he sees just 2% shipment growth. The analyst noted the gradual rollout of Apple Intelligence, Apple’s lack of generative AI apps for consumers, and the advancements in capabilities from other AI models to cause this slow growth. Due to these reasons, the analyst believes it will be difficult for Apple to outperform.
“We see little upside to Apple’s valuation and believe it is hard to justify its premium multiple with slower iPhone growth and Apple’s uncertain role in the early stages of gen AI adoption among consumers”.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On January 29, Mizuho Securities analyst James Lee maintained their bullish stance on META stock, giving a Buy rating. The analyst increased the price target to $750. Several optimistic developments in Meta Platforms have led to the buy rating from Mizuho, particularly the promising potential in product development and monetization strategies with MetaAI, Llama, and smart glasses. In turn, supportive regulatory environments and open-source strategies will further allow Meta to thrive and innovate significantly. The company’s advertising metrics have also continued to improve, with prominent growth in ad impressions and pricing. Its advancements in artificial intelligence, such as its personal assistant MetaAI, are on track to reach over 1 billion users, paving the way for new monetization avenues. The company has also seen strong adoption rates for video content and AI-driven tools, supporting its long-term growth prospects and leading to the buy rating.
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