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.
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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.
8. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 64
On June 2nd, Rosenblatt analyst Catherine Trebnick raised the price target on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) to $515.00 (from $450.00) while maintaining a “Buy” rating. The price target revision reflects the firm’s optimism about Crowdstrike’s future financial outlook.
According to the analysts, the growing trend toward IT consolidation is improving Crowdstrike’s performance. Annual recurring revenue (ARR) and revenue growth are anticipated to align with market estimates, projecting a 21% and 20% increase, respectively. The firm further noted how businesses, despite being careful with spending, are choosing Crowdstrike for its comprehensive AI-powered security solutions.
Crowdstrike’s Q1 report is anticipated today, June 3rd, with analysts estimating an “inline to marginally better quarter, fueled by the persistent IT consolidation trend.” The firm also noted how its increased target multiple on the shares is backed by the 31% expansion in cybersecurity sector multiples over the past two months, as well as optimism in Crowdstrike’s “strong execution and broad platform tailored to the key IT consolidation trend.”
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection.
7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 104
On June 3rd, Piper Sandler analyst Alexander Potter reiterated an Overweight rating on Tesla, Inc. (NASDAQ:TSLA) with a $400.00 price target.
The rating reiteration follows an investor call hosted by the firm that featured insights from Jordan Giesige of ’The Limiting Factor’. Noting the company’s unique approach to vertical integration in the automotive industry, analysts pointed out how it is the only car manufacturer actively working to source batteries at scale without relying on China. In particular, Tesla’s in-house production of 4680 batteries is approaching almost zero reliance on Chinese resources.
The analysts further noted in the investor call how Tesla is also planning to produce its own cathode active materials, refine lithium, construct anodes, coat electrodes, assemble cells, and sell vehicles independently. This is a level of integration that will set it apart from other U.S. automotive entities.
While success isn’t guaranteed, the analysts have lauded the company’s strategic plan to reduce its U.S. supply chain’s dependence on China. They also noted that complete isolation from Chinese products is challenging for the next two years, but Tesla’s efforts are praiseworthy.
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
6. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 106
On June 2nd, TD Cowen analyst Derrick Wood raised the price target on ServiceNow, Inc. (NYSE:NOW) to $1,150.00 (from $1,100.00) while maintaining a “Buy” rating.
The price target revision follows ServiceNow’s recent Technology, Media, and Telecom (TMT) Conference in New York City, where its General Manager and Senior Vice President of Core Business Workflows, Josh Kahn, was hosted.
The conference highlighted how the company’s Business Workflows product group has reached $1.1 billion in annual recurring revenue, boasting a growth of approximately 40% in net new annual contract value in the last quarter. One of the reasons for the growth has been the strong traction with ServiceNow Assist and the Generative AI upgrade cycle.
The analysts noted how the company is also employing new bundling strategies for its Back Office products, which will increase product attachment rates and result in greater engagement with C-level executives. Overall, the firm reiterated its confidence in ServiceNow, highlighting its potential for sustained growth and innovation in product offerings.
ServiceNow, Inc. (NYSE:NOW) is a technology company that offers a cloud-based software platform for automating business workflows within an enterprise.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
On June 3rd, JPMorgan analyst Samik Chatterjee reiterated an Overweight rating on Apple Inc. (NASDAQ:AAPL) with a $240.00 price target. With Apple still working on features that it promised in last year’s event, analysts are of the view that this year’s Worldwide Developers’ Conference (WWDC) is going to be a low-key event.
Some of the announcements expected at this event include the company expanding the distribution and integration of third-party AI large language models (LLMs) beyond ChatGPT. However, these developments are only incremental, and the company is seen to be significantly behind major tech companies in artificial intelligence advancements.
Apple is going to leverage the Developers Conference to showcase its expanded AI capabilities as well. This is much needed, considering investors need increasing reassurance about the company’s relevance and improved position in AI.
The analysts also guessed potential surprises that could be made at the event, such as specific timelines for upgraded Siri features in North America by 2026 or even the announcement of Apple Intelligence in China, though it seems less likely.
Other announcements anticipated by the firm, albeit incremental, include enabling third-party app developers to access on-device AI LLMs, integration with Google Gemini, and reiterating AI feature integrations across Siri and native apps.
Apple is a technology company known for its consumer electronics, particularly the iPhones and MacBooks.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 212
On June 3rd, Citi analyst Atif Malik reiterated a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) with a $180.00 price target.
The analysts have pointed out Nvidia’s strategic focus on artificial intelligence (AI) networking, highlighting the company’s efforts to optimize compute and storage with its networking operating system, Dynamo. Dynamo is intended to achieve the lowest total cost of ownership for tokens per second per user.
Moreover, the company’s first-quarter results have demonstrated a significant 64% quarter-over-quarter growth in its networking segment, backed by both scale-up and scale-out products. This growth has, in turn, led to the company’s remarkable 86.17% year-over-year revenue growth and 70.11% gross profit margin.
The company’s NVLink solutions have grossed over $1 billion in sales. Meanwhile, its Spectrum-X (Ethernet) portfolio has achieved two new customers, contributing to a quarterly run-rate of $2 billion. Even though Infiniband is the gold standard for hyperscalers, Ethernet is also becoming a preferred choice due to its familiarity.
Discussing the NVLink, analysts noted that this specialized scale-up platform connects 72 GPUs and benefits larger language models. Customers can purchase only the components they need for their AI infrastructure, such as super NICS and switches, without having to purchase the entire stack.
Noting Co-Packaged Optics (CPO) in relation to NVLink, the analysts said that while copper is low power and cost-effective, it can create noise on the PCB. Placing optics next to ASICs will help the company to eliminate the need for additional digital signal processors and retimers, optimizing its AI networking solutions even further.
NVIDIA specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
On June 2nd, Citizens JMP analyst Andrew Boone reiterated a Market Outperform rating on Meta Platforms, Inc. (NASDAQ:META) with a $750.00 price target.
The analysts pointed out the importance of artificial intelligence (AI) skills in the workforce, citing Meta’s claim that workers having AI-related skills could help boost their wages by as much as 20%. This claim highlights the value of developing AI competencies among employees.
Drawing a comparison with trends noted in platforms such as Upwork, it was revealed that freelancers engaging in AI-related tasks on the platform earn 44% more than those who do not. This data point further signifies the importance of artificial intelligence skills, particularly in the gig economy.
The firm further highlighted how Meta’s focus on AI skills and impact on wage growth highlights how Meta remains committed to advancing AI in its business strategy. It is highly confident in the company’s potential for growth as it ramps up the use of the said technology.
Meta Platforms, Inc. (NASDAQ:META) is a global technology company.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
On June 2nd, Microsoft Corporation (NASDAQ:MSFT) announced that it will be investing $400 million in Switzerland to develop its cloud computing and artificial intelligence infrastructure. The investment was announced at a meeting of Swiss Economy Minister Guy Parmelin and his vice chair Brad Smith in Bern.
The company currently employs up to 1,000 people in Switzerland. However, it did not indicate how many jobs the investment opportunity would create. Microsoft did note that the money would be used to expand and upgrade its four data centers near Geneva and Zurich, responding to increased demand for AI and cloud computing services in Switzerland.
The company will also be expanding its partnership work with small and medium-sized companies and improving training efforts to help people use AI and digital tools.
“Switzerland has created one of the world’s leading innovation ecosystems, blending world-class research with real-world applications.”
-Brad Smith said in a statement.
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 328
On June 2, Citizens JMP analyst Nicholas Jones reiterated a “Market Outperform” rating on Amazon.com, Inc. (NASDAQ:AMZN) with a $250.00 price target.
Discussing Amazon’s aggressive push in advertising, the analysts discussed competitive strategies from both Amazon and Google, particularly in the demand-side platform (DSP) market.
Comparing the two, they noted how Amazon is currently offering discounts on its DSP to attract marketers while Google is offering credits to advertisers who use its DV360 service for purchasing inventory on third-party Connected TV (CTV) apps.
Even though Google and Amazon benefit from owning popular platforms such as YouTube and Prime Video that offer unique inventory, The Trade Desk is also a strong competitor, owing to strong relationships and deep integrations with brands and advertising agencies.
With CTV advertising gaining momentum, the competition between companies is only expected to intensify even further. Despite the competition, analysts believe that Trade Desk’s embedded position with key industry players is a major factor that could help it maintain its market share against the tech giants’ efforts.
All in all, investors will be keeping a close eye on Amazon as it navigates the dynamic digital advertising landscape and aims to capitalize on the opportunities within the DSP and CTV markets.
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions.
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