Nvidia has recently agreed to purchase a nonexclusive license for technology from privately held Groq, marking the latest move in the artificial intelligence race.
As per reports from CNBC and The Information, the deal is valued at around $20 billion, and will involve Nvidia hiring key employees from Groq.
Several analyst firms have expressed their surprise at the reported valuation of the Groq deal, stating that although they are aware of Groq’s specialty in chips for inference, the technology doesn’t warrant that level of valuation.
“It is not clear what sparked the rapid, significant increase in value to Nvidia’s $20 billion price. We have met with Groq in the past and are familiar with their offering, but we are not aware of any changes in their market position in recent months that would merit such an increase.”
-Seaport Research analyst Jay Goldberg.
“We find it hard to believe there aren’t better assets in the same market for Nvidia to take a look at.”
-D.A. Davidson analyst Alex Platt.
The firm argued that Groq’s current chips have limited memory capacity, implying that its hardware isn’t suitable for many inference tasks.
“The (unconfirmed) $20 billion price that Nvidia is paying is certainly large in absolute terms, and even relative to Groq’s revenue, which we have seen estimated at between $90 million and $500 million.”
-Truist Securities analyst William Stein.
Nevertheless, by avoiding complete takeovers, tech companies have been able to avoid some level of antitrust scrutiny and quickly close deals to lock in talent.
“Antitrust would seem to be the primary risk here, though structuring the deal as a non-exclusive license may keep the fiction of competition alive.”
– Stacy Rasgon, an analyst at Bernstein.
Overall, the recent deal between AI chipmaker Nvidia and Groq underscores how fierce the AI race is becoming. It is also a reflection of how competition and spending in AI are far from slowing down.
For this article, we used Finviz and Insider Monkey’s database of AI stocks to select AI stocks that are trading at under $50 per share, as of December 29. We have picked the 10 stocks that are the most popular among elite hedge funds, as of Q3 2025.
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10. CEVA, Inc. (NASDAQ:CEVA)
Share Price as of December 31: $21.77
Number of Hedge Fund Holders: 12
CEVA, Inc. (NASDAQ:CEVA) is one of the 10 Best AI Stocks to Buy under $50. The company, a leading licensor of silicon and software IP, announced its financial results for the third quarter of 2025 on November 10th.
Ceva reported total revenues of $28.4 million, marking an 11% sequential increase and a 4% year-over-year growth. In particular, AI processor licensing contributed an estimated one-third of the licensing revenue.
The company also achieved several strategic wins during the year, including a major NeuPro NPU portfolio license agreement with Microchip and three new AI DSP agreements.
Reflecting this growing optimism around the stock, Loop initiated CEVA as “Buy” on December 1st. The firm believes that the semiconductor company is too attractive to ignore.
“We are initiating coverage of CEVA, Inc. (CEVA) with a Buy rating and $28 price target.”
In separate news, the company announced on November 17 that it started an underwritten public offering of 3,000,000 shares of its common stock. It also agreed to grant the underwriters a 30-day option to buy up to an additional 450,000 shares of the common stock, with plans to use the net proceeds for instances such as finance potential acquisitions of, or investments in, complementary technologies or businesses.
Analysts on Wall Street currently have a consensus Buy rating on the stock. The average price target of $35 implies a 62.72% upside, however, the Street-high target of $40 implies an upside of 85.96%.
CEVA, Inc. (NASDAQ:CEVA) offers silicon and software IP solutions to semiconductor and OEM companies.
9. DigitalOcean Holdings, Inc. (NYSE:DOCN)
Share Price as of December 31: $48.80
Number of Hedge Fund Holders: 30
DigitalOcean Holdings, Inc. (NYSE:DOCN) is one of the 10 Best AI Stocks to Buy under $50. The comprehensive agentic cloud posted stellar earnings performance in the third quarter, followed by a higher growth outlook for full-year 2025.
It posted revenues of $230 million, up 16% year-over-year, while net income was $158 million, up 381% year-over-year. Paddy Srinivasan, CEO of DigitalOcean, noted how the company’s unified agentic cloud platform is “emerging as a preferred destination for AI and digital native enterprises building and scaling AI workloads.”
Looking ahead, it raised its full-year guidance from $896 to $897 million in revenues and $2.00 to $2.05 in Non-GAAP diluted net income per share.
The company also recently made headlines after it announced a new AI partnership aimed at advancing scalable and secure AI systems. Persistent Systems, a global Digital Engineering and Enterprise Modernization leader, is collaborating with DOCN to develop cost-effective infrastructure that supports enterprise growth and innovation.
Under the agreement, Persistent has selected DigitalOcean as its cloud and AI infrastructure provider for its AI-powered platform SASVA, which will run on DigitalOcean’s Gradient AI Agentic Cloud and GPU offerings.
By combining Persistent’s AI engineering expertise with DigitalOcean’s cloud infrastructure and AI platform capabilities, the collaboration seeks to enable companies to address challenges organizations face in AI adoption.
These challenges include rising GPU and infrastructure costs, challenges in agent development ecosystems, and security concerns.
DigitalOcean Holdings, Inc. (NYSE:DOCN) operates a cloud computing platform.
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