Big tech giants had a blockbuster quarter recently, and the momentum seemingly remains strong amongst chip makers and AI developers. However, investor Peter Andersen, founder of Anderson Capital Management, has told Reuters how Big Tech firms are yet to show investors profitable use cases that will justify their enormous spending on AI development. However, he doesn’t believe they will be able to.
While it may seem like there is no end to the upside for chip makers and AI developers, Andersen revealed he isn’t sure how long that will continue. He believes that investors will, at some point, start asking about the difference between machine intelligence and human intelligence. So far, we haven’t been invested in the question as much as we have been in things such as improvements in high-speed computing, he noted.
READ ALSO: 10 AI Stocks Gaining Wall Street’s Attention and 12 AI Stocks on Latest News and Ratings.
Another question that arises is when the end user will start benefiting from the billions of dollars invested in AI infrastructure. So far, big tech firms have been facing almost zero pressure from investors on the issue, who seem to be excited about the technology and the promise that it brings. However, Anderson asserted that their patience will at some point be tried.
That said, the wider market is going to face enormous consequences if these investors completely lose their confidence in the technology.
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10. Pony AI Inc. (NASDAQ:PONY)
Number of Hedge Fund Holders: 13
On June 2nd, Pony AI Inc. (NASDAQ:PONY) announced a strategic partnership with Shenzhen Xihu Corporation Limited, the city’s largest taxi operator. The two companies have agreed to jointly deploy a fleet of more than 1,000 Pony.ai’s seventh-generation (“Gen 7”) Robotaxis in Shenzhen over the coming years.
Marking a unique milestone, the collaboration will integrate autonomous driving with local mobility networks by adopting an “asset-light + AI-empowered model.” This will boost the large-scale deployment of safe, efficient, and intelligent mobility services to a wider passenger base in Chinese tier-one cities.
Pony.ai will be able to level up its Robotaxi services by leveraging Xihu Group’s extensive fleet management experience, integrating it with its proprietary hardware and software technology, AI-powered order dispatch capability, and deep understanding of user needs. This will allow the companies to deliver an upgraded autonomous experience.
Pony.ai is the first company authorized to operate its paid fully driverless robotaxis within Shenzhen’s city centers. It specializes in autonomous mobility, offering AI-driven robotruck and robotaxi services, intelligent driving software, and vehicle integration solutions.
9. Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 52
On June 2nd, Citi analyst Tyler Radke lowered the price target on Elastic NV. (NYSE: ESTC) to $125.00 (from $160.00) while maintaining a “Buy” rating. The price target cut follows Elastic’s mixed fourth quarter results, particularly weak performance in the federal sector that led to a smaller-than-expected earnings beat.
The initial guidance for fiscal year 2026 was also slightly below expectations, with analysts hinting at the Chief Financial Officer’s commentary related to a potential (further) deterioration in the macroeconomic environment beyond what Elastic has experienced as yet.
Citi analysts further observed that net revenue retention (NRR) and billings growth remained stable for Elastic in comparison to the previous quarter, reflecting underlying growth in the mid-to-high teens. As such, the company has the potential to exceed its guidance, they noted.
They further adjusted their estimates down by two percentage points. However, they remain optimistic about the stock due to reasonable enterprise value to free cash flow multiples and the likelihood of increased monetization of Generative AI, justifying the buy rating.
Elastic N.V. is a search AI company offering cloud-based solutions.
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