Days after the Biden-era rule on AI chips export was rescinded, a bipartisan group of eight U.S. lawmakers has now introduced a bill requiring makers of artificial intelligence chips to include technology that verifies the location of their chips before exporting them.
Introduced in the U.S. House of Representatives, the Chip Security Act will aim to address reports of U.S. export-controlled AI chips being smuggled into China.
The bill comes shortly after US President Donald Trump began his tour of the Middle East this week, announcing several deals that will send AI chips to countries in the Middle East. This has been despite growing opposition from some inside the US government.
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“In order for the United States to maintain our technological advantage, we must employ safeguards to help ensure export controls are not being circumvented, allowing these advanced AI chips to fall into the hands of nefarious actors.”
-Rep. Bill Huizenga, a Michigan Republican who introduced the House bill, said in a statement.
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.
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10. Informatica Inc. (NYSE:INFA)
Number of Hedge Fund Holders: 22
Informatica Inc. (NYSE:INFA) is a leader in enterprise AI-powered cloud data management. On May 14, the company announced that it has entered into a strategic agreement with Microsoft, extending its long-standing collaboration with the company and accelerating customer adoption on the Microsoft Azure cloud platform. Leveraging Informatica’s Intelligent Data Management Cloud™ platform with key Microsoft services, including Microsoft Fabric and Microsoft Azure, both companies are working closely together to deliver AI-powered solutions. Informatica’s cloud data management platform is available as a SaaS offering on Azure and via Azure Marketplace to enable customers to achieve AI-driven business transformations.
“As enterprises increasingly prioritize trusted data to fuel responsible AI, agents and next-generation analytics, Informatica and Microsoft are jointly committed to empowering our customers as they continue on their cloud and AI transformation journey. This strategic agreement reflects our shared vision to drive customer success through co-innovation, go-to-market alignment and deep-field collaboration, helping organizations securely and efficiently scale AI across their data estate.”
-Amit Walia, CEO at Informatica.
9. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 52
Twilio Inc. (NYSE:TWLO) is a leading cloud communications platform-as-a-service (CPaaS) company. On May 15, Analyst Meta Marshall from Morgan Stanley maintained a “Buy” rating on the stock with a $117.00 price target. Twilio has been advancing strategically and demonstrates significant growth potential, which has led to the buy rating. In particular, Twilio’s platform stood out at its recent Signal event, demonstrating how it can enhance B2C relationships through contextual data crucial for cross-selling opportunities. Even though financial details weren’t shared at the event, the company made it clear that Twilio is committed to simplifying its platform and improving its value proposition. The company has also announced a multi-year partnership with Microsoft to develop conversational AI solutions on Azure AI Foundry. This announcement will likely help to grow its reach.
8. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 83
Intel Corporation (NASDAQ:INTC) designs and sells computing hardware, semiconductor products, and AI-driven solutions for various industries. On May 14, Citi revealed that Mercury Research has released estimates for Q1 microprocessor shipments and market share. The estimates reveal that Q1 MPU units are down 6.1% quarter-over-quarter, above the usual seasonal drop of 9.4%.
The analyst told investors in a research note how ARM Holdings has gained market share over both AMD and Intel (INTC). ARM gained 281 basis points quarter-over-quarter with 13.6% in MPU unit share, AMD lost 99 basis points, and has 21.1% of the overall MPU unit share. Meanwhile, Intel lost 182 basis points and has a 65.3% share. The firm has maintained a “Neutral” rating on Intel and AMD shares.
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $20 implies a 3.15% upside, however, the Street-high target of $27 implies an upside of 39.25%.
7. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 91
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider. On May 14, the company announced that its Health Clinical AI Agent, an AI-powered multimodal voice and screen-driven assistant, is now available to health systems across Canada. The AI-powered assistant allows physicians to spend less time on administrative tasks so they can focus more on patient care. It is available for more than 40 medical specialties, including urgent care, sports medicine, behavioural health, and more. By integrating with the Oracle Health Foundation electronic health record, the assistant offers highly accurate draft notes in minutes and provides next steps for providers to review and approve directly at the point of care.
“Oracle continues to deliver AI-driven intelligence to our entire clinical portfolio. By embedding AI agents directly within the clinician’s workflow, we’re reducing the mundane busywork that took the joy out of practicing medicine and impeded their ability to truly connect with and serve patients. We received unanimously positive feedback from the thousands of clinicians who have used the solution and are proud to be extending these capabilities to our customers across Canada.”
-Seema Verma, executive vice president and general manager, Oracle Health and Life Sciences.
6. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 94
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide. On May 15, Christopher Danely from Citi maintained a “Buy” rating on the stock with a price target of $110.00.
A few days prior, J.P. Morgan analyst Harlan Sur maintained their bullish stance on the stock, giving a Buy rating on April 30. Sur’s buy rating stems from Micron’s strong growth potential and robust market position. In particular, the demand for its DRAM and NAND products is a strong catalyst in the datacenter sector. A pricing inflection has also been observed, which is pointing to favorable market conditions.
The company is also witnessing strong demand for its high-bandwidth memory (HBM) and datacenter SSD products, crucial for AI and accelerated computing applications. Micron’s technology and manufacturing advancements are also progressing well, reflecting upon its efficient execution and cost management.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 96
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications. On May 14, the company announced the launch of the AMD EPYC™ 4005 Series, purpose-built processors that deliver enterprise-class features and superior performance for small and medium businesses as well as hosted IT service providers. Offering a wide array of enterprise solutions, the processors are supported by leading partners and customers such as Altos, ASRock Rack, Gigabyte, Lenovo, MiTAC, and more.
“Growing businesses and dedicated hosters often face significant constraints around budget, complexity, and deployment timelines. With the latest AMD EPYC 4005 Series CPUs, we are delivering the right balance of performance, simplicity, and affordability, giving our customers and system partners the ability to deploy enterprise-class solutions that solve everyday business challenges.”
-Derek Dicker, corporate vice president, Enterprise and HPC Business Group, AMD.
4. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 162
Salesforce Inc. (NYSE:CRM) is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce. On May 14, Mizuho lowered the firm’s price target on the stock to $380 from $425 and kept an “Outperform” rating on the shares. The rating, issued as part of an earnings preview, stated how the firm’s software checks were “very solid overall.”
The analyst told investors in a research note that even though there were a few bottlenecks in April due to tariffs, including some customer pauses due to certain verticals such as retail and manufacturing, most of the partners executed well. The firm further said that cybersecurity generally performed better than other areas of software, and that its favorite April-ending stocks to own ahead of the earnings prints are Salesforce, Okta, and Snowflake.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On May 14, BofA raised the firm’s price target on the stock to $160 from $150 and kept a “Buy” rating on the shares after Nvidia announced a multi-year AI infrastructure project with Saudi Arabian AI startup HUMAIN. The firm believes the project is likely to be around $3B to $5B annually. It also believes “Sovereign AI” can address the challenge of limited power availability for data centers in the U.S., and reduce the impact of export restrictions on US companies shipping to China.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On May 13, Bank of America Securities analyst Justin Post maintained a “Buy” rating on the stock and set a price target of $200.00. Post’s buy rating stems from Google’s strong growth potential and improved market position. A primary reason noted by the analyst has been that Google Chrome is gaining browser market share at the expense of Apple’s Safari. This implies how Google’s overall query volume remains strong, especially on Apple devices. Google’s apps on iOS have also been demonstrating growth in monthly active users and total time spent. With features like Google Lens and the expansion of the Gemini brand, direct traffic will likely be enhanced on Google’s properties.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On May 14, Austrian advocacy group NOYB said it will seek an injunction against Meta Platforms. The said injunction may lead to substantial claims if the tech giant goes ahead with its plans to use Europeans’ personal data to train its AI models. NOYB, or none of your business, is led by privacy activist Max Schrems. Meta plans to start using personal data from European users of Instagram and Facebook from May 27, citing legitimate interest under EU privacy rules for using users’ data.
The said data will be used to train and develop its generative AI models as well as other AI tools that can be shared with third parties. The company has said that users will receive a link to a form that will allow them to object to their data being used for training purposes. It also said that private messages and public data from accounts of users under the age of 18 will not be used.
“The European Court of Justice has already held that Meta cannot claim a ‘legitimate interest’ in targeting users with advertising. How should it have a ‘legitimate interest’ to suck up all data for AI training? We are currently evaluating our options to file injunctions, but there is also the option for a subsequent class action for non-material damages. If you think about the more than 400 million European Meta users who could all demand damages of just 500 euros or so, you can do the math.”
-Schrems.
NOYB said that it can use an EU rule filed under the EU Collective Redress, enabling consumers to pursue collective lawsuits against companies in the bloc. It set a May 21 deadline for Meta to respond.
“NOYB’s arguments are wrong on the facts and the law. We’ve provided EU users with a clear way to object to their data being used for training AI at Meta, notifying them via email and in-app notifications that they can object at any time.”
-Meta spokesperson.
While we acknowledge the potential of META 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 META and that has 100x upside potential, check out our report about this cheapest AI stock.
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