The pessimism that took over the AI investing landscape following the launch of DeepSeek and fears of a decline in demand are fading as analysts assess new growth and demand drivers. Dan Niles, Niles Investment Management founder and portfolio manager, recently explained in a program on CNBC why he’s bullish on Nvidia. A few months back, Niles was warning about a potential slowdown in demand and spending from hyperscalers. But he’s now seeing new avenues of growth:
“So training spending is slowing down, but you finally had inference spending picking up. And so that means people are going to ChatGPT, OpenAI, Gemini, which is the one I use a lot. I probably use it 10 to 20 times a day. And you had inference demand really start to take off. Google talked about the fact that in the month of May, the tokens that they were generating were up 50 times year-over-year. And then Microsoft, which obviously was invested in OpenAI back in 2019 before any of us had even heard of ChatGPT in 2022, they came out and said, “Hey, we have a 5x increase in the number of tokens we’re generating.”
And so you put all that together, companies forecast derisks because of that massive write-down, some of the sovereign AI demand as President Trump went to the Middle East and you had all these deals, all of that stuff.”
For this article, we picked 10 stocks making moves this month. For these stocks, we also mentioned the number of hedge fund investors. 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).
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10. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Investors: 79
Jordan Klein, Tech Media & Telecom Analyst at Mizuho, in a recent program on CNBC talked about revenue contribution from the defense sector for Analog Devices (ADI).
“No particular semi company gets, I would say, an outsized portion of the revenue from the defense sector, just because that sector traditionally hasn’t grown that fast. But there’s a few companies—one in the analog space is Analog Devices, ADI—that gets some decent revenue from defense.”
Aristotle Atlantic Core Equity Strategy stated the following regarding Analog Devices, Inc. (NASDAQ:ADI) in its Q1 2025 investor letter:
“Analog Devices, Inc. (NASDAQ:ADI) is a global semiconductor leader dedicated to solving customers’ most complex engineering challenges. The company delivers innovations that connect technology to human breakthroughs and play a critical role at the intersection of the physical and digital worlds by providing the building blocks to sense, measure, interpret, connect and power. Analog designs, manufactures, tests and markets a broad portfolio of solutions. These solutions include integrated circuits, software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing technologies. Its comprehensive product portfolio, deep domain expertise and advanced manufacturing span high-performance precision and high-speed mixed-signal, power management and processing technologies, including data converters, amplifiers, power management, radio frequency, integrated circuits, edge processors and other sensors. The company’s customers include original equipment manufacturers and customers that build electronic subsystems for integration into larger systems.
We see the company’s analog products providing exposure to high-growth trends, including automotive electrification and driver assistance systems, factory intelligence and automation, the Intelligent Edge, Internet of Things device proliferation and sustainable energy. We expect the company to return excess free cash flow, benefiting shareholders.”
9. Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Investors: 80
Josh Brown, CEO of Ritholtz Wealth Management, recently pitched Coupang as one of the best stocks during a program on CNBC. Here is why Brown likes the stock.
“Coupang Inc (NYSE:CPNG) is on the best stocks in the market list because it’s a Korean business but it’s incorporated and based in Seattle. So this is a US company with a US founder, but most of their business is being the Amazon of South Korea. The best comp here is MercadoLibre. MELI is up 9,000% plus since its IPO. This company is probably 5 years behind Melly in terms of its margins, its earnings, its growth. So there’s still a lot of opportunity. It came public in ’21. Everybody forgot about it because the whole growth stock market crashed for a year. But now it’s working its way back, and the reality is that it’s not terribly expensive. It’s in a 40% drawdown from that ’21 high. Barclays has a $36 target, and it’s a best stock. It’s breaking out. You’ve got a 50- to 200-day moving average crossover, which signals short-term momentum, and I think the stock probably gets itself into the mid-30s at a minimum based on the breakout that we’ve seen.”
Baron Fifth Avenue Growth Fund stated the following regarding Coupang, Inc. (NYSE:CPNG) in its Q4 2024 investor letter:
“Shares of Coupang, Inc. (NYSE:CPNG), Korea’s largest e-commerce platform, corrected 10.5% in the fourth quarter (even though they finished 2024 up 33.9%). While the company delivered solid quarterly results with 27% year-on-year revenue growth with Farfetch and other initiative losses narrowing significantly, its product commerce EBITDA margin missed expectations due to a temporarily elevated spending on technology and automation. Sluggish domestic consumption in Korea, with the e-commerce market experiencing flattish to negative growth, and political uncertainty stemming from President Yoon’s declaration of martial law and subsequent impeachment, further weighed on the stock. Despite these short-term challenges, we maintain a positive outlook on Coupang’s long-term market share expansion and margin growth trajectory, and view Coupang as one of the most competitively advantaged e-commerce businesses globally, with significant runway for both revenue and earnings growth.”
8. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Investors: 81
Oppenheimer’s Brian Nagel said in a recent program on CNBC that Nike (NKE)’s latest results show the company has seen the bottom, and improvement could be expected in the long term despite challenges.
“I keep telling our clients—I put out another report on Nike earlier this week—I don’t expect any type of all clear, okay? There are challenges ahead, internal and external. But I do think this is probably the worst for Nike, and through fiscal ’26, which they’re now in, I think results get gradually better. That’s where I think this stock really works, because right now it’s heavily underowned, the sentiment is very negative. I think the stock starts to work on these better results.”
Madison Large Cap Fund stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q1 2025 investor letter:
“NIKE, Inc. (NYSE:NKE) is still struggling as it attempts to clean up its over-inventoried position and revive new product launches. Given that its shoes are predominantly manufactured overseas, the recent round of tariffs will increase costs as well.”
7. Uber Technologies (NYSE:UBER)
Number of Hedge Fund Investors: 145
Mark Mahaney, Evercore ISI head of internet research, explained in a recent program on CNBC that Uber Technologies (NYSE:UBER) needs to expand in more geographies for growth via partnerships.
“If you get more of these rollouts with Waymo, and you get other AV companies—there’s more than just, you know, it’s not just Waymo’s world and it’s not just Tesla’s world. And by the way, of those two, Waymo is dramatically better in terms of what they’ve been able to show and roll out so far. But if you get Zoox in the market, and then you get a couple of Chinese players—not in the US but in parts of the Middle East, maybe in Europe—and if you get more companies like Mobileye, Mobilewave, if you get these companies out there showing that you can get multiple AV vendors, maybe not two or three but maybe four, five, or six, that’s better for Uber’s economics.”
The analyst thinks there’s still more room for Uber Technologies (NYSE:UBER) stock to grow:
“I think there’s a lot more room for Uber stock. I know it’s up 50% year to date, but this thing trades at like 18–19 times free cash flow. It should trade at 25 times free cash flow. They’re growing their free cash flow 25% to 30%.”
Hinde Group stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its Q1 2025 investor letter:
“With operations in more than 10,000 cities across 72 countries and gross bookings expected to exceed $180 billion this year, Uber Technologies, Inc. (NYSE:UBER) is one of the largest transportation network companies in the world. Each month, Uber helps more than 170 million users meet their mobility and delivery needs by connecting them with more than 7 million independent drivers and couriers. Uber’s mobility and delivery services are enabled by a highly sophisticated and efficient technology platform that automatically manages and optimizes demand prediction, matching & dispatching, routing, pricing, and personalization, among other functions. Uber has a leading category position in eight of its top ten mobility and delivery markets.
Like Interactive Brokers, Uber has no material, direct exposure to Trump’s tariffs or the associated retaliatory tariffs. Major components of Uber’s cost structure include insurance, credit card processing fees, data center and communications expenses, employee compensation, advertising expenses and rent. Tariffs only directly impact Uber’s cost structure in minor ways. Uber may have to pay more for computers and data center equipment, but the impact will be insignificant in the context of the company’s overall cost structure and will phase in gradually over time…” (Click here to read the full text)
6. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 159
Gene Munster, Deepwater Asset Management, said in a recent program on CNBC that Apple Inc (NASDAQ:AAPL) can benefit in the second half of 2025 amid revised investor expectations about AI and iPhone growth. Here is how Munster explained his hopes for the iPhone maker:
“I would also mention that there’s this added benefit—the fact that they’ve essentially reset the bar. Don’t expect anything from us about AI over the next year. The fact that they’ve reset that bar, I think it really does lower what some of investors’ expectations are for Apple and AI the next year. In other words, that low bar, I think, can be positive for the stock in the back half of the year. And I think investors are kind of processing that piece—how much room to give them.”
Munster said iPhone sales have seen a negative impact lately, but he’s seeing a silver lining there as well:
“The iPhone numbers have come down pretty dramatically over the past six months. If we rewind to late last year, investors were generally looking for about 6% iPhone growth this year and about 8% next year. Now it’s about 1% and 4%. And so, Morgan, when I think about the opportunity for the stock, I think that this can kind of win on two phases. One is just the simple block and tackle of people coming back, buying their iPhones, doing what they do, committed to the Apple platform. I think that should bode well for Apple iPhone numbers, but also kind of some growing anticipation for that new Siri next year.”
Columbia Seligman Global Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q1 2025 investor letter:
“The fund maintained an underweight position in Apple throughout the quarter. Apple Inc.’s (NASDAQ:AAPL) stock pulled back during the first quarter, in line with the performance of many other technology stocks, and the company experienced some challenges of its own during the quarter. Apple delayed the release of an AI-upgraded Siri, claiming that the new Siri was taking longer to complete than the company expected, and it should come out later this year. The U.S. Department of Justice also stood firm — as it did during the prior administration — in asking a federal judge to block Google from paying Apple and other companies to secure its search engine as a default on smartphones and other devices.”
5. Alphabet Inc (NASDAQ:GOOG)
Number of Hedge Fund Investors: 164
Mark Mahaney, Evercore ISI head of internet research, said in a recent program on CNBC that Alphabet Inc (NASDAQ:GOOG) is a bet for investors who want “real alpha” in their portfolios. The analyst believes Alphabet Inc (NASDAQ:GOOG) stock could see a change of sentiment if investor concerns about AI search and antitrust challenges are cleared:
“I don’t think the worst-case scenario is going to come to pass. The worst-case scenario would be a forced sale of Chrome and then a banning on all search distribution payments. I don’t think that’s going to happen. If it doesn’t happen, I think you’ve got a clearing event for Google shares. And then what Google needs to do is prove that they can monetize AI searches, GenAI searches, AI overview searches, just as well as they can traditional searches. They’ve been saying that publicly, but they’ve got to kind of show it in the numbers. How do you do that? You maintain this kind of 11 to 15% search revenue growth that they’ve done for the last two years. You keep that up at the same pace, Scott, and I think the bears are going to kind of lose steam and you get a real chance for a rerating.”
Fidelity Dividend Growth Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:
“An outsized stake in Alphabet Inc. (NASDAQ:GOOG) detracted as well. The shares returned-18% for the quarter, falling beginning in early February, as the advertising giant and parent of the Google search engine announced quarterly revenue that reflected a slowdown in sales at its cloud-computing and device businesses. Investors were hoping strength in cloud computing would ease the impact of recent weakness in the company’s core advertising business. Meanwhile, management said it is meaningfully accelerating investments in data centers that power artificial intelligence. Alphabet also faces regulatory pressure, including a recently opened antitrust probe from the Chinese government.”
