The United States and China, two leading powers in military and AI, have refused to sign a voluntary declaration agreed at the Responsible Artificial Intelligence in the Military Domain (REAIM) summit. Meanwhile, only a third of attending countries agreed to the declaration on how to govern deployment of the technology in warfare.
According to numerous attendees and delegates, uncertainty over future transatlantic relations and growing friction between the United States and European allies have made countries hesitant in backing such commitments.
Nevertheless, the pledge is a reflection of the growing concern among some governments that rapid advances in artificial intelligence could outpace existing safeguards, increasing the risk of accidents, miscalculation or even unintentional escalation.
Dutch Defense Minister Ruben Brekelmans believes that countries are facing a “prisoner’s dilemma,” balancing between putting responsible restrictions in place with concerns about falling behind strategic rivals.
Russia and China are moving very fast. That creates urgency to make progress in developing AI. But seeing it going fast also increases the urgency to keep working on its responsible use. The two go hand-in-hand, Brekelmans said in comments to Reuters.
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 Q3 2025.
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10. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 42
Super Micro Computer, Inc. (NASDAQ:SMCI) is one of the 10 AI Stocks to Keep on Your Radar. On February 4, Barclays analyst Tim Long lowered the price target on Super Micro Computer (NASDAQ: SMCI) to $38.00 (from $43.00) while maintaining an “Equal Weight” rating.
Discussing SMCI’s earnings report, Barclays noted how December quarter results exceeded expectations on both revenue and earnings. SMCI posted revenue of $12.7 billion, which represents a 153% quarter-over-quarter increase and also exceeds Barclays’ estimate by more than $2 billion.
However, gross margin came in at 6.4%, which is slightly below the analyst firm’s 6.5% estimate. The management forecast’ fiscal third-quarter revenue to be at least $12.3 billion and lifted its full-year 2026 revenue guidance to at least $40 billion, in line with analysts’ expectations of 66% revenue growth this fiscal year.
Gross margin is anticipated to improve by 30 basis points quarter-over-quarter in the next quarter, albeit still remaining below 7%. The firm added that Data Center Building Block Solutions (DCBBS) is likely to increase in the profit mix.
According to the firm, SMCI’s fiscal 2026 guidance points to a sequential forth-quarter deceleration, but views this as conservatism. It expects momentum to sustain through the second half of the year.
Super Micro Computer, Inc. (NASDAQ:SMCI) designs and manufactures high-performance server and storage solutions for data centers, cloud computing, AI, and edge computing worldwide.
9. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 54
Baidu, Inc. (NASDAQ:BIDU) is one of the 10 AI Stocks to Keep on Your Radar. On February 4, US Tiger Securities analyst Bo Pei raised the price target on the stock to $150.00 (from $135.00) while maintaining a “Buy” rating. The firm is bullish on Baidu, particularly due to its AI ecosystem optionality and monetization catalysts.
The firm believes that Baidu will continue to unlock shareholder value following the recently announced listing of its AI chip subsidiary, Kunlunxin. It is also of the view that Baidu Cloud is well-positioned to benefit from the accelerated adoption of AI across China and that its robotaxi business may see a valuation rerating as investor focus on transitions from AI infrastructure to downstream applications.
For the fourth quarter, the firm’s revenue estimates remain unchanged. However, it has modestly trimmed its non-GAAP EBIT and EBITDA as assumptions around D&A and SBC are refined. Baidu has been actively exploring ways to unlock shareholder value, and the most prominent example has been its decision to spin off and pursue an independent listing of its AI chip subsidiary Kunlunxin.
US Tiger Securities highlighted how Baidu has confidentially filed a Hong Kong IPO application and currently owns an estimated 60%. The company noted that it intends on retaining majority control post-IPO.
Strategically, we view this move as a positive step toward unlocking hidden value while providing Kunlunxin with independent access to capital to support continued AI chip development. We assign a valuation of RMB 100bn to Kunlunxin, implying 15.4x EV/sales on our projected 2026 revenue. We view this multiple as conservative relative to listed peers such as Cambricon Technologies, which currently trades at approximately 31.5x EV/sales.
Even though the firm remains cautious on BIDU’s near-term revenue and earnings growth trajectory, it believes that the stock is increasingly tied to its long-term AI optionality. The firm sees multiple catalysts supporting upside, particularly in robotaxi and AI cloud.
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.
