While the United States is busy forging alliances and striking high-profile artificial intelligence deals, China is quietly making calculated progress of its own. In latest news, DeepSeek, the AI startup from China that wreaked havoc in the tech world not too long ago, has released an upgraded version of its artificial intelligence reasoning model.
While there wasn’t an official announcement made by the startup, the DeepSeek R1 upgrade was released on the AI model repository Hugging Face. The new upgraded version of the DeepSeek R1 model is closely trailing behind OpenAI’s o4-mini and o3 reasoning models on LiveCodeBench, which is a site that benchmarks models against different metrics.
“DeepSeek’s latest upgrade is sharper on reasoning, stronger on math and code, and closing in on top-tier models like Gemini and O3.”
-Adina Yakefu, AI researcher at Hugging Face, told CNBC.
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Yakefu further stated that the new model has “major improvements in inference and hallucination reduction,” and that “this version shows DeepSeek is not just catching up, it’s competing.”
All of these developments from China reveal that the restrictions the United States has been imposing are proving futile. Even Nvidia CEO Jensen Huang criticised the US export controls, stating that the US policy is based on the clearly wrong assumption that China cannot make AI chips.
“The question is not whether China will have AI. It already does.”
-Jensen Huang
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 Q1 2025.
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10. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 24
On May 29, Morgan Stanley analyst Sanjit Singh raised the price target on C3.ai, Inc. (NYSE:AI) to $22.00 from $20 while keeping an “Underweight” rating. C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company involved in building and operating enterprise-scale AI applications and accelerating digital transformation.
The rating reiteration follows C3.ai’s recent partnership extension with Baker Hughes for an additional three years, along with the company’s reported revenue growth of over 26% in the fourth quarter.
On May 28, C3 and Baker Hughes announced a multi-year renewal and expansion of their joint venture agreement, where the two companies will continue to provide Enterprise AI solutions to the oil and gas and chemical sectors.
Discussing these positive developments, Morgan Stanley noted that
” a 3-year extension of the Baker Hughes partnership and sustained +26% rev growth in Q4 likely qualifies as a better than feared outcome.”
At the same time, the firm also pointed out some concerns regarding the stock. It stated how the company’s long-term growth prospects are questionable since its revenue missed expectations slightly. Moreover, the revenue mix included a high proportion of demonstration licenses and services revenue.
Overall, the firm is cautiously optimistic due to the company’s performance indicators.
“However, a sub rev miss along with a high mix of demonstration licenses and services rev keeps the debate open on the durability of LT growth.”
9. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 45
On May 28, Hewlett-Packard Enterprise Company (NYSE:HPE) announced expansions to its HPE Aruba Networking wired and wireless portfolio, as well as the new HPE Aruba Networking CX 10K distributed services switches. Hewlett Packard Enterprise Company (NYSE:HPE), an American multinational technology company, provides high-performance computing systems, AI software, and data storage solutions for running complex AI workloads.
The HPE Aruba Networking doubles the performance capabilities of widely-deployed data center distributed services switches. These innovations are designed to improve performance, cut costs, and support the growing needs of different types of high-performance computing.
According to Phil Mottram, EVP and general manager of HPE Aruba Networking, the innovations announced by HPE tend to “simplify data center and overall server connectivity at ten times the scale and performance and one-third the cost of traditional enterprise solutions.”
Some of the latest advances announced by the company include the HPE Aruba Networking CX 10040 smart switch, the HPE Aruba Networking CX 6300 series campus switches, new Wi-Fi 7 access points, Application-aware networking across campus switches, and more.
“Data-fueled AI, IoT, and other high-performance applications are driving unprecedented demands for enterprises to provide cost-effective connectivity, no matter where devices and users are or how they access the network. HPE is again raising the bar with innovations that simplify data center and overall server connectivity at ten times the scale and performance and one-third the cost of traditional enterprise solutions.”
-Phil Mottram, EVP and general manager, HPE Aruba Networking.
8. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 47
On May 29, Morgan Stanley lowered the firm’s price target on HP Inc. (NYSE:HPQ) to $26 from $29 and kept an “Equal Weight” rating on the shares. HP Inc. is a technology company that specializes in personal computing and printing solutions.
Discussing the FY25 guide-down, the firm noted that it is the impact of tariffs, execution, and management conservatism, leaving shares in “the penalty box” regardless of a “cheap” valuation. The firm also said that cost-cutting measures did not entirely mitigate these issues.
As of now, HP’s growth areas are too small and lack transparency, and aren’t in a position to meaningfully influence the company’s performance. Analysts have also forecast that cost reductions are only partially likely to protect profitability, resulting in an EPS for the fiscal year 2026 that is anticipated to be roughly on par with fiscal year 2024.
Capital returns over the next few quarters may be restricted due to HP’s increased leverage. The analyst further added that a lack of a positive company-specific catalyst keeps the firm on the sidelines.
7. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 73
On May 28, Stifel analyst Tore Svanberg reiterated a Buy rating on Marvell Technology, Inc. (NASDAQ:MRVL) with an $80.00 price target. Marvell engages in the development and production of semiconductors, focusing heavily on data centers.
Given Stifel’s July quarter revenue guidance of around $1.97 billion, analysts expect Marvell to offer similar guidance. They believe an upward revision may also be possible, driven by potential increases in data center and artificial intelligence (DC/AI) revenue forecasts. Hyperscalers have also been passing out positive comments, supporting the optimistic outlook.
Analysts at Stifel believe that Marvell is poised to benefit from the rapid expansion of data infrastructure. This factor, they believe, will drive long-term growth for the company.
In other news, Redburn Atlantic initiated coverage on Marvell Technology with a “Neutral” rating and a price target of $67.00.
The firm mentioned how Marvell and Broadcom are similar in terms of their ASICs exposure and networking capabilities, but also mentioned concerns regarding Marvell’s potential involvement in future Amazon Web Services (AWS) Trainium chips.
6. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 104
One of the most notable analyst calls on Thursday, May 29, was for Tesla Inc. Wedbush reiterated the stock as “Outperform.” Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
The firm said it’s standing by the stock after Elon Musk announced he was leaving DOGE, or the Department of Government Efficiency.
“In another clear positive step for Tesla bulls, Elon Musk officially left the Trump White House last night … which is music to the ears of Tesla shareholders with Musk now laser focused on Tesla and the autonomous vision ahead.”
The company’s stock was previously slumping because of Musk’s increasing attention to politics and his work at the Department of Government Efficiency (DOGE). After Musk announced that he plans to be “super focused” on his businesses and return to “spending 24/7 at work,” the stock surged in response.
“Back to spending 24/7 at work and sleeping in conference/server/factory rooms. I must be super focused on 𝕏/xAI and Tesla (plus Starship launch next week), as we have critical technologies rolling out.”
-Musk posted on X, his social media platform.
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $306 implies a 15% upside, however, the Street-high target of $500 implies an upside of 39%.
5. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 158
On May 28, Melius Research raised the firm’s price target on Broadcom Inc. (NASDAQ:AVGO) to $283 from $198 and kept a “Buy” rating on the shares. Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
Analysts at Melius Research noted that the company’s momentum in the past year has been “materializing better than we expected.” The company is all prepared to accelerate sales of its artificial-intelligence chips, which include custom AI accelerators and networking chips.
Moreover, since the company is a market leader, it is also likely to see higher profits from its ownership of VMware, a cloud-computing business. The company acquired VMware in 2023. The analysts noted that Broadcom Chief Executive Hock Tan “has created a portfolio of high-margin and sticky assets.”
Moreover, Broadcom is “still one of the ‘must-own’ AI stocks,” the firm believes. With its customer base growing and AI hyperscalers focusing on developing reasoning models, its switching business, which makes up about 30% of total AI revenue, “should accelerate as well over the next few years as AI clusters scale out.”
The firm has said that there is more for Broadcom as AI customer wins pick up pace and execution remains sharp in Infrastructure Software.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
On May 28, Loop Capital analyst Ananda Baruah reiterated a “Hold” rating on Apple Inc. (NASDAQ:AAPL) and $215.00 price target. Apple is a technology company known for its consumer electronics, particularly the iPhones and MacBooks.
According to the firm, tariff-driven shifts in production and pricing may support near-term iPhone performance. The firm’s supply chain analyst has found that Apple has increased average selling prices (ASPs) for the iPhone 17 Pro and iPhone 17 Pro Max by $100 to $200.
“Ironically, there is a world where AAPL’s ‘tariff actions’ of pulling phones forward into the Mar Q and Jun Q provide a much-needed bridge into the iPhone 17 launch.”
Firm checks have also shown that Apple has raised its shipment forecast for the iPhone 17 in the September and December quarters to 100 million units, up from the previous 92 million. Loop said that expected shipments of the new iPhone 17 Air model have risen by 15 million units to 31 million.
Even though the tariffs are said to pressure margins, the firm said that “if tariffs aren’t shockingly onerous investors could look through them if there is legitimate iPhone 17 and iPhone 18 form factor excitement.”
That said, it is expected that both models are likely to feature significant hardware design changes in years. The firm has also highlighted Apple’s evolving AI strategy separately:
“Our work suggests that AAPL’s latest Siri kerfuffle may be compelling a bit of a strategy shift internally and that AAPL is in the process of placing orders for ~$1.0B of GB300 NVL72s,” the note said, referring to large server clusters from Supermicro and Dell (NYSE:DELL).
3. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 162
On May 29, DA Davidson analyst Gil Luria raised the price target on Salesforce, Inc. (NYSE:CRM) to $225.00 (from $200.00) and maintained an “Underperform” rating. Salesforce is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce.
The firm’s rating update follows Salesforce’s recent earnings report, demonstrating better-than-anticipated results. It reported first-quarter revenue of $9.83 billion, up 8% year-over-year and topping the analyst consensus from Visible Alpha. Meanwhile, adjusted net income was $2.5 billion, or $2.58 per share, rising from $2.41 billion, or $2.44 per share, in the year-ago quarter, also beating estimates.
Despite the positive performance, DA Davidson has pointed out concerns about the company’s future growth prospects. The firm noted how Salesforce’s future outlook has been adjusted to account for foreign exchange impacts and a modest first-quarter beat.
It also said that growth in Salesforce’s core cloud segments is slowing. However, it is being partially offset by positive developments in sectors such as data cloud and artificial intelligence. Salesforce’s committed remaining performance obligations (cRPO) growth was also discussed, which was one percentage point higher than anticipated.
Nevertheless, guidance for the second quarter was slightly below expectations, suggesting that the company may experience single-digit constant currency (CC) growth for the first time in its history.
Overall, the firm has increased the price target on the stock, but its underperform rating signifies the firm’s reservations regarding its stock performance relative to the market.
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 212
One of the most notable analyst calls on Thursday, May 29, was for NVIDIA Corporation (NASDAQ:NVDA). Bank of America reiterated the stock as “Buy” and raised its price target on its top pick, Nvidia, to $180 per share from $160. NVIDIA specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
The rating follows Nvidia’s earnings on Wednesday. The company reported fiscal first-quarter earnings and revenue, beating analyst expectations. Its data center business led the way, with sales surging 73% year over year. Moreover, its current quarter revenue guidance was almost in line with analyst estimates at $45 billion, an outlook that could have been $8 billion higher if Nvidia didn’t face lost sales from the restriction on exporting its H20 chips to China.
The bank noted three major takeaways from the earnings call.
“Three major takeaways from the Q1 call: 1) China derisked, with $15bn in 1H sales of H20 product now already in the model, 2) Blackwell racks in full production, with every large hyperscaler now ramping close to 1K racks/week, 13K racks/quarter or ~$30bn+/q at $2.5mn+ rack ASP (or $100bn+ across the top few hyperscalers, though NVDA didn’t quantify further), and 3) NVDA confident in GM recovery back to mid-70s % sometime later in the year, another sign of improving demand and rack-scale execution.”
It further said that it is positive on the stock considering its transformation from a PC graphics chip vendor to a major supplier.
“Our positive view on Nvidia is based on its underappreciated transformation from a traditional PC graphics chip vendor, into a supplier into high-end gaming, enterprise graphics, cloud, accelerated computing and automotive markets.”
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On May 28, CNBC reported that Meta Platforms, Inc. (NASDAQ:META)’s artificial intelligence assistant, Meta AI, has one billion monthly active users across the company’s family of apps.
CEO Mark Zuckerberg disclosed the news at the company’s annual shareholders meeting, stating how the “focus for this year is deepening the experience and making Meta AI the leading personal AI with an emphasis on personalization, voice conversations, and entertainment.”
CNBC further remarked how this milestone follows Meta’s April rollout of its stand-alone app for the tool. Zuckerberg wants the AI tool to keep growing before a business can be built around it. As the Meta AI assistant improves over time, “there will be opportunities to either insert paid recommendations” or offer “a subscription service so that people can pay to use more compute.”
“It may seem kind of funny that a billion monthly actives doesn’t seem like it’s at scale for us, but that’s where we’re at.”
-Zuckerberg told shareholders.
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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