Artificial Intelligence (AI) is known to increase productivity, decrease human error, and expedite the development of human resources. The market is being inundated with new AI capabilities to solve pressing business issues, such as employee expectations. By comprehending the unique needs, desires, and preferences of each employee, AI-powered solutions assist in creating individualized employee experiences that promote engagement.

Likewise, automation of the labor market has inched a notch higher as China takes the fight to the US on game-changing artificial intelligence innovations. That’s evident with the launch of Manus, the world’s first AI agent, which operates autonomously without human intervention. Just weeks after China threatened US AI dominance by launching cost-effective AI models through DeepSeek, it moved to avert the need for human intervention on AI agents.

Manus is the new AI sensation that promises to coordinate the work of specialized assistants in the race to automate recruitment and website development tasks. In addition to managing the work of numerous expert assistants, it can execute complex, multi-step activities. It works in the background, finishing all tasks on its own and only releasing data when the outcomes are ready.

Additionally, Manus stands out for its ability to act independently and without guidance, unlike conventional chatbots like ChatGPT, Gemini, or Grok, which wait for commands. Manus heralds a new era of automation driven by AI, in which machines would help people and assume leadership and decision-making responsibilities.

HR, tech development, logistics, and customer service are just a few of the areas that this change might greatly impact. While it may result in more efficiency, it may also raise issues with unemployment and the morality of AI autonomy.

The global artificial intelligence in the human resource market was valued at $7.01 billion in 2024 and is expected to grow at a compound annual growth rate (CAGR) of 15.94%. Due to AI integration in the various HR processes, the market is expected to reach $30.77 billion by 2034, according to a study by Precedence Research. The development of sophisticated AI solutions like Manus to assist businesses and companies in effectively managing personnel acquisition, employee engagement, and retention should accelerate growth.

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 in 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).

12. Gorilla Technology Group (NASDAQ:GRRR)

Number of Hedge Fund Holders: 4

Gorilla Technology Group (NASDAQ:GRRR) is a global provider of AI-driven solutions in security intelligence, network intelligence, business intelligence, and IoT technology. It also offers intelligent video analytics AI models for various verticals, such as behavioral analytics and vehicle analysis. On March 10, the company confirmed the formal launch of the initial phases of Thailand’s largest-ever AI-driven energy transformation.

With the use of AI, automation, and cybersecurity, the $1.8 billion project is anticipated to digitally upgrade Thailand’s power infrastructure, guaranteeing increased sustainability, efficiency, and security. Gorilla Technology Group (NASDAQ:GRRR) and the Electricity Authority are now moving forward into the structured definition phase, where the operational frameworks, deployment methods, and foundational scope will be created, following the formal agreement.

Chairman & CEO of Gorilla, Jay Chandan, commented: “With this collaboration, we are not just launching a project, we are laying the foundation for a next-generation, AI-powered energy ecosystem that will drive efficiency, resilience and long-term sustainability at an unprecedented scale. By integrating AI, automation, and cybersecurity into the nation’s power grid, we intend to create an intelligent infrastructure that is future-proof, adaptive, and built to meet the demands of a rapidly evolving energy landscape. This initiative is a testament to Gorilla Technology’s ability to lead large-scale, high-impact transformations that deliver lasting value.”

11. Tuya Inc. (NYSE:TUYA)

Number of Hedge Fund Holders: 13

Tuya Inc. (NYSE:TUYA) is a technology company that provides a cloud platform connecting a wide range of smart devices via the Internet of Things (IoT). The company has also positioned itself as an AI-powered IoT platform by leveraging artificial intelligence to enhance the functionality and capabilities of its Internet of Things (IoT) devices and products.

On March 11, the global AI cloud platform service provider affirmed plans to revolutionize innovative energy management through advanced AI integration. Consequently, it has developed a Home Energy Management System that merges power generation storage charging and usage capabilities. With the help of huge models like DeepSeek, Tuya’s Energy Management System redefines the parameters of smart energy by utilizing multimodal perceptual capabilities to integrate energy-saving intelligence into various application scenarios.

“We are now in the 2.0 era of large AI models. Innovations in architectures like DeepSeek enable the processing of extremely long texts at a low cost while demonstrating exceptional reasoning and data capabilities. These advancements bring AI decision-making closer to human cognition, allowing models to be susceptible to device states, physical changes, and energy consumption patterns—making them particularly well-suited for energy management,” said Eva Na, Vice President of Marketing and Strategic Cooperation and CMO of Tuya Smart.

10. Hive Digital Technologies Ltd (NASDAQ:HIVE)

Number of Hedge Fund Holders: 13

Hive Digital Technologies Ltd (NASDAQ:HIVE) is a technology company that designs, develops, and operates data centers for cryptocurrency mining and provides infrastructure solutions for the blockchain and AI industries. The company is also redefining the future by powering advanced technologies like AI with clean energy. On March 10, the global leader in sustainable data center infrastructure released its February production results and strategic milestones.

Hive Digital Technologies Ltd’s (NASDAQ:HIVE) executive chairman, Frank Holmes, reiterated that strategic focus remains on transformative trends of Bitcoin and artificial intelligence. He echoed the appointment of Craig Tavares as chief operating officer of Buzz HPC as a testament to driving innovation through high-performance computing and GPU cloud services. The remarks come on HIVE Digital mining 89 BTC and bringing its total holdings to 2,620 BTC, valued at $220 million as of February.

“With over two decades of expertise in digital infrastructure, Craig’s leadership will be instrumental in scaling Buzz HPC’s operations and realizing our vision of reaching $100 million in revenue. His deep industry knowledge and track record of success positions us to capitalize on the immense opportunities ahead in AI-driven computing and blockchain technologies,” Holmes said.

9. Valens Semiconductor Ltd. (NYSE:VLN)

Number of Hedge Fund Holders: 15

Valens Semiconductor Ltd. (NYSE:VLN) is a technology company that provides semiconductor products for the audio-video and automotive industries. It offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, as well as Ethernet and power. On March 11, it confirmed a strategic collaboration with RGo Robotics and CHERRY Embedded Solutions to enhance the design and deployment of AI robotic systems.

The collaboration paves the way for integrating RGo’s advanced Perception Engine, Valens’ VA7000 MIPI A-PHY connectivity chipsets, and CHERRY’s Rockchip-based hardware module. The ultimate goal is to address challenges encountered in sensor placement in robotic systems. Through the use of its automotive-grade connectivity, the agreement should enable Valens to reach a wider audience than just its conventional automotive focus. This offers Valens Semiconductor Ltd. (NYSE:VLN) investors tremendous diversification and a way to profit from the growing automation and robotics industries without significantly redesigning their products.

“Our collaboration with RGo Robotics underscores the critical role of MIPI A-PHY technology in delivering high-performance connectivity for AI-driven perception systems,” said Gili Friedman, Head of the Cross-Industry Business Unit at Valens Semiconductor. “With our VA7000 MIPI A-PHY chipsets, we’re allowing robotics developers to optimize camera placement in their systems, paving the way for more intelligent, more efficient automation.”

8. Pure Storage Inc (NYSE:PSTG)

Number of Hedge Fund Holders: 30

Pure Storage Inc (NYSE:PSTG) is a technology company that develops and provides all-flash data storage products and solutions for data centers. It also accelerates and simplifies AI deployments by offering a platform that maximizes performance and streamlines AI workflows. On March 11, the IT pioneer unveiled FlashBlade//EXA, a high-performance data storage platform designed for the most demanding requirements of AI and High-Performance Computing (HPC).

While leveraging artificial intelligence capabilities, FlashBlade//EXA should deliver more than 10 terabytes per second read performance, making it highly suitable for large-scale AI and HPC workloads. As AI model sizes grow exponentially, the infrastructure supporting them must also change in tandem. Therefore, the timing is ideal for meeting market expectations. Customers who have previously invested in NVIDIA’s AI stack should find it easier to integrate Pure’s integration with NVIDIA networking components, resulting in a unified ecosystem approach.

“Data is the fuel for enterprise AI factories, directly impacting performance and reliability of AI applications. With NVIDIA networking, the FlashBlade//EXA platform enables organizations to leverage the full potential of AI technologies while maintaining data security, scalability, and performance for model training, fine tuning, and the latest agentic AI and reasoning inference requirements,” said Rob Davis, Vice President, Storage Networking Technology, NVIDIA.

7. Jack Henry & Associates, Inc. (NASDAQ:JKHY)

Number of Hedge Fund Holders: 31

Jack Henry & Associates, Inc. (NASDAQ:JKHY) is a financial technology company that connects people and financial institutions through technology solutions and payment processing services. The company also leverages AI to enhance financial institution operations, focusing on building an AI-enabled platform for fraud prevention and improving efficiency. On March 10, Algebrik AI confirmed it had joined the Jack Henry™ Vendor Integration Program (VIP).

Participation in the program paves the way for the company to enable the integration of its AI-powered Loan Origination System (LOS) with Symitar® through SymXchange as it seeks to revolutionize the lending experience. By utilizing Algebrik AI’s sophisticated, artificial intelligence-driven Loan Origination System (LOS), credit unions can quickly shift to a contemporary lending environment.

“By reducing operational overheads, we empower credit unions to focus on delivering more personalized, borrower-centric experiences. This collaboration brings AI-driven automation and cloud-native scalability to credit unions nationwide, helping them stay ahead in a rapidly evolving lending landscape,” said Pankaj Jain, Founder & CEO at Algebrik AI.

6. Rambus Inc. (NASDAQ:RMBS)

Number of Hedge Fund Holders: 34

Rambus Inc. (NASDAQ:RMBS) is a technology company that designs, develops, and licenses high-speed chip-to-chip interface technologies and architectures used to enhance data transfer speeds and security in data-intensive systems. It also provides industry-leading chip and silicon IP solutions that enhance memory performance and data security, which are particularly crucial for AI/ML workloads and data-intensive systems. The company strengthened its prospects in the high-growth AI and data center markets on March 10 by launching a next-generation CryptoManager Security IP solution.

Rambus Inc.’s (NASDAQ:RMBS) next-generation CryptoManager security architecture addresses significant issues in existing AI and data center security frameworks with a number of technically significant improvements. For starters, it features the industry’s first Quantum Safe boot flow, which guards against post-quantum cryptographic assaults that jeopardize established security techniques. Consequently, it is expected to strengthen Rambus’s competitive edge in the chip security market when air Infrastructure spending is on the rise.

“The pace of value creation in the data center driven by AI is unprecedented, and the need to protect this value grows commensurately,” said Matt Jones, SVP and general manager of Silicon IP at Rambus. “The multi-tiered architecture of our new generation CryptoManager Security IP lets us serve a broader set of customers with solutions that provide an unrivaled level of flexibility and industry-leading protection of valuable hardware and data assets.”

5. CyberArk Software Ltd. (NASDAQ:CYBR)

Number of Hedge Fund Holders: 57

CyberArk Software Ltd. (NASDAQ:CYBR) is a cybersecurity company offering Privileged Access Management (PAM) solutions that help secure and control privileged access to sensitive systems and data. The company is also integrating AI into its cybersecurity solutions to test AI models for security vulnerabilities. On March 10, the company announced a strategic partnership with Device Authority and Microsoft.

The companies have joined forces and launched a comprehensive solution for secure device authentication in manufacturing environments. The AI-powered solutions seek to help manufacturers reduce cyber risk from connected devices on factory floors and edge environments. The collaboration should broaden CyberArk Software Ltd.’s (NASDAQ:CYBR) target market beyond conventional enterprise environments and into industrial sectors. The association with Microsoft may also provide channel collaborations. This strategy aligns with wider industry movements towards zero-trust frameworks in industrial contexts and strategically places CyberArk in a strong position within the merging IT/OT security landscape.

Dayan Rodriquez, Corporate Vice President, Manufacturing & Mobility, Microsoft, said, “As connected technologies become more embedded in manufacturers operations, protecting these devices is critical. This collaboration provides manufacturers with a comprehensive approach to their IoT security, directly aligned with NIST’s latest guidelines. With an ecosystem-based security solution, manufacturers can protect their operations from the factory floor to the edge, ensuring regulatory compliance and resilience against cyber threats.”

4. Semtech Corp (NASDAQ:SMTC)

Number of Hedge Fund Holders: 57

Semtech Corp (NASDAQ:SMTC) is a technology company that designs, develops, manufactures, and markets analogue and mixed-signal semiconductors and advanced algorithms. It also offers Internet of Things (IoT) systems and cloud connectivity services. On March 10, the company unveiled LR2021, the first chip in the LoRa Plus family line, featuring LoRa IP technology and designed specifically for AI-enabled edge devices.

While the chip will be available for customer sampling in April 2025, it represents a significant milestone in Semtech Corp’s (NASDAQ:SMTC) Internet for Things portfolio. It addresses emerging artificial intelligence requirements, such as supporting higher data rates while maintaining low power consumption. Consequently, it should position the company at the intersection of IoT proliferation and edge AI computing. Its ability to support advanced applications such as license plate recognition and gunshot detection should allow the new chip to alleviate significant barriers to AI-enhanced IoT devices.

“The LR2021 revolutionizes IoT connectivity by addressing key challenges for AI-powered deployments of any scale,” stated Shahar Feldman, senior product marketing director for LoRa ICs at Semtech. “Whether for European utilities requiring both LoRaWAN and W-MBUS, North America utilities with LoRaWAN and Wi-Sun FSK, or security systems and smart home applications necessitating long-range LoRa connectivity with protocols such as Z-Wave, this single-chip solution simplifies complexity and enhances performance.”

3. Align Technology, Inc. (NASDAQ:ALGN)

Number of Hedge Fund Holders: 58

Align Technology, Inc. (NASDAQ:ALGN) is a medical instrument and supplies company that designs, manufactures, and markets Invisalign clear aligners, Vivera retainers, and iTero intraoral scanners. On March 10, the company confirmed the launch of Align X-ray Insights, a new software-based computer-aided detection solution, in the European Union and the United Kingdom.

Powered by an artificial solution, the software-based solution is designed to automatically analyze 2D radiographs. With the help of AI features, the solution should enhance doctors’ ability to diagnose dental and oral health conditions. It should also standardize analysis, streamline workflows, and improve patient engagement.

“Align X-ray Insights represents a significant advancement in our digital restorative dentistry solutions with broader patient applicability,” said Simon Beard, Align Technology executive vice president and managing director, Europe, Middle East, and Africa (EMEA). “By integrating AI into radiographic analysis, we are empowering doctors with more precise diagnostic capabilities to improve their patient outcomes. This launch underscores our commitment to innovation and our ongoing efforts to expand our digital platform.”

2. Fidelity National Information Services, Inc. (NYSE:FIS)

Number of Hedge Fund Holders: 53

Fidelity National Information Services, Inc. (NYSE:FIS) is an information technology services company that provides financial services technology solutions for financial institutions, businesses, and developers worldwide. On March 10, the company unveiled an AI-driven product support tool, Treasury GPT.

Integrated within its FIS Treasury and Risk Manager, the AI-powered tool leverages Microsoft Azure Open AI service to respond quickly to user queries about product usability, client configuration, and best practices. Treasury GPT should strengthen Fidelity National Information Services, Inc. (NYSE:FIS) prospects in the treasury management sector as it addresses critical efficiency challenges for corporate treasurers.

“Corporate treasurers have a major role to play in their organizations, but emerging risks and expanded responsibilities can create disharmony and disruption to their strategies and workflows,” said JP James, head of Treasury and Risk at FIS. “In this fast-changing environment, having access to the best tools and innovations is what will keep corporate treasurers ahead of the curve. By launching Treasury GPT, we’re giving our customers a competitive edge that can unlock the power and capabilities of FIS solutions and steer their companies to growth.”

1. PowerFleet, Inc. (NASDAQ:AIOT)

Number of Hedge Fund Holders: 26

PowerFleet, Inc. (NASDAQ:AIOT) is a software infrastructure company and a leader in the Artificial Intelligence of Things (AIoT) software-as-a-service (SaaS) mobile asset industry. It offers SaaS cloud-based applications data from IoT devices and ecosystem of third-party and partner applications to present actionable information for customers to increase efficiencies. The company moved to enhance workforce retention, operational efficiency, and safety on March 10, by launching advanced Unity in-warehouse solutions.

PowerFleet, Inc. (NASDAQ:AIOT) combined its AI-driven safety technology with TELUS’s extensive network infrastructure to enable real-time analytics and reliable connectivity with the new solution. The TELUS partnership should expand market reach across North America without requiring Powerfleet to build a specialized sales force. In return, the company should gain accelerated market access through its Unity AI-driven warehouse solutions.

“With TELUS’s expansive market presence and commitment to digital transformation, we can accelerate the adoption of Unity’s AI-driven safety, sustainability, compliance, and efficiency solutions across a broad range of industries. By combining TELUS’s vast customer base with our cutting-edge AIoT technology, this collaboration strengthens our abilities to drive scalable revenue growth and furthers Powerfleet as a force in AIoT-driven digital transformation,” said Steve Towe, CEO of Powerfleet.

While we acknowledge the potential of PowerFleet, Inc. (NASDAQ:AIOT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AIOT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.