According to Daniel Ives, global head of technology research at Wedbush Securities, the US- China agreement is once again creating a bull market environment for tech.

“If you are a tech investor, this is a dream scenario,” Ives noted on CNBC’s “Worldwide Exchange.”

On Monday, the U.S. and China announced that they would temporarily reduce tariffs on each other for 90 days. Following the news, Wall Street’s three major indexes surged sharply on the same day, with the S&P 500 marking its highest level since early March.

READ ALSO: 10 AI Stocks in Focus Amid U.S.–China Tariff Pause and 10 AI Stocks Making Moves This Week.

The U.S. said it will cut tariffs imposed on Chinese imports to 30% from 145% while China said it would cut duties on U.S. imports to 10% from 125%. Investors saw this as a big positive surprise.

“It’s a relief rally because there was a lot of anxiety and angst about tariffs between the U.S. and China. They are going to scale it down to much more reasonable levels so the fall-out from tariffs will probably be more manageable and limited.”

-John Praveen, managing director at Paleo Leon in Princeton, New Jersey.

“No one had these low China tariff rates on their bingo cards. This is a big positive surprise. Risk remains that tariffs go back up from current levels as the pauses end, though taking worst-case scenarios off the table is reassuring.”

-Jeff Buchbinder at LPL Financial.

Unfortunately, the rally in US stock futures paused as investors focused on a key inflation report and lingering economic concerns.

“The challenges are not over. The de-escalation was a lot stronger than even the best hopes, but you have to remember that the US economy still faces average of effective tariffs of more than 13%.”

-Frederique Carrier, investment strategy head at RBC Wealth Management.

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.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points  (see more details here).

10. SoundHound AI, Inc. (NASDAQ:SOUN)

Number of Hedge Fund Holders: 11

SoundHound AI, Inc. (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses. On May 13, the company announced that it will participate in the 2025 National Restaurant Association Show, set to take place from May 17-20 in Chicago, IL. SoundHound AI will be showcasing its end-to-end, omnichannel voice AI platform. The platform will demonstrate seamless ordering and support across front-of-house, back-of-house, and off-premise channels, comprising drive-thru, phone, kiosk, in-vehicle systems, and any other connected devices.

The company will display its Dynamic Drive-Thru, presenting a live demo from Burger King UK, along with Smart Ordering, an AI-powered phone ordering solution. Other things on display include Smart Answering, a fully automated phone assistant, and Employee Assist, an AI coach that instantly answers to restaurant staff on the job. SoundHound AI will also showcase its groundbreaking in-car voice ecommerce platform, allowing customers to order takeout from their car’s infotainment services.

“The National Restaurant Association Show is a key moment for us to demonstrate how voice AI is reshaping restaurant operations. From the drive-thru to behind the counter, and even behind the wheel, our solutions increase speed, sales, and employee and consumer satisfaction.”

-Ben Bellettini, SVP of Restaurant Sales at SoundHound AI.

9. Super Micro Computer Inc. (NASDAQ:SMCI)

Number of Hedge Fund Holders: 45

Super Micro Computer, Inc. (NASDAQ:SMCI) designs and manufactures high-performance server and storage solutions for data centers, cloud computing. On May 13, Raymond James analyst Simon Leopold initiated coverage of the stock with an “Outperform” rating and set its price target at $41. The analyst said that the company is a “near pure AI play.”

“Super Micro, doing business as ‘Supermicro,’ has emerged as a market leader in AI-optimized infrastructure. AI platforms now comprise nearly 70% of Supermicro’s revenue, and is also expanding its share of the branded AI server market. The company combines its engineering and manufacturing scale to compete. Tariffs and technology transitions (e.g., NVIDIA’s Hopper to Blackwell processors) present intermediate-term challenges, but AI projects represent a long-term secular driver.”

Leopold has dubbed Super Micro a “market leader in AI-optimized infrastructure,” despite disappointing results for the fiscal third quarter. The analyst believes that the company will expand its market share and experience more growth in hyperscale AI infrastructure. Furthermore, he noted that the ramping of Nvidia’s Blackwell platforms is a catalyst.

“While recent lumpiness tied to product transitions and limited enterprise services constrain valuation, we believe SMCI’s 25%+ revenue [compound annual growth rate] and expanding U.S. footprint support a re-rating.”