With the AI arms race heating up every passing day, more businesses and countries are eager to stake their claim in the rapidly evolving industry. However, restrictions on artificial intelligence chip exports, particularly those announced in the final days of outgoing President Joe Biden’s administration, have made progress in AI difficult for some.
The restrictions have capped AI chips and technology exports to most countries, blocked access to China and the three other adversaries, and allowed almost unlimited access for Washington’s closest allies.
“The US leads AI now – both AI development and AI chip design, and it’s critical that we keep it that way”
-US Commerce Secretary Gina Raimondo told reporters before the announcement was made.
One country that has not been included by Washington among the “key allies and partners” exempted from the measures is Poland. However, it has recently come to light that the country hopes these restrictions may be lifted.
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Reuters reported on the news, stating that Polish deputy digital minister Dariusz Standerski said there is a chance that the Trump administration may lift restrictions on Poland’s access to the U.S.-designed AI chips. According to Standerski, Biden’s decision was “irresponsible” and “the outgoing administration was unable to provide us with a specific reason why we found ourselves in tier two”.
However, he confirmed that dialogue with the new administration has been “very constructive”.
“I think there is a big chance for that. Consultations last until May 15.”
– Standerski, when asked whether there was a chance that Poland would end up in tier one.
The Polish deputy digital minister also said that Polish Deputy Prime Minister Krzysztof Gawkowski discussed rolling back the AI chip curbs on Poland with U.S. Vice President JD Vance during the AI Action Summit in Paris last month. Even some tech groups have been asking President Donald Trump’s team to ease export restrictions, saying the measures should not extend to a group of U.S. allies.
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.
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A Wall Street trading desk monitoring the performance of large-cap growth stocks.
12. 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, AI, and edge computing worldwide. On March 11, Rosenblatt Securities analyst Kevin Cassidy reinitiated coverage of the stock with a price target of $60. According to the firm, it is motivated by SMCI’s larger chunk of AI (artificial intelligence) revenues (70% of sales) and increased growth visibility in the near term. It further noted that SMCI’s ability to deliver liquid cooling at scale is seen as a competitive advantage, which can increase rack compute power by over two times. This is a “disruptive dynamic in a power constrained data center.
11. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 63
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On March 12, William Blair reiterated the stock as “Market Perform”, stating that the stock’s valuation remains “frothy” right now.”
Even though new customers demonstrate strong commercial growth, the stock price has been highly correlated with Nasdaq-100 movements.
“Palantir’s stock has demonstrated a very high beta correlation with the Nasdaq-100. If the Nasdaq-100 continues to trend lower, Palantir shares will likely also decline, potentially by a 3-times factor of the market due to its high beta.”
The firm noted that its revenue growth guidance of 31% for 2025 and operating margin of 45% remain impressive, but also cautioned that high volatility presents risks for investors.
“Palantir’ s combination of revenue growth (31% guidance for 2025) and operating margin (45% for 2025) rank among the highest in all software. Palantir’s revenue from 2022 through 2024 grew 50% while headcount increased by only 3%.”
10. Talen Energy Corporation (NASDAQ:TLN)
Number of Hedge Fund Investors: 77
Talen Energy Corporation (NASDAQ:TLN) is a leading independent power producer and energy infrastructure company. On March 12, Morgan Stanley initiated the stock as “Overweight” and a price target of $243.00. The firm said it sees “multiple transformational opportunities” for the nuclear energy plant operator.
It also highlighted the company’s pivotal role in the flourishing AI sector. It believes that the company’s portfolio of plants is anticipated to benefit from escalating power prices. This is driven by the increasing demand from data centers and a tightening supply-demand balance forecasted for the upcoming years.
“We see an attractively priced core power plant fleet with multiple credible options for upside: Higher power prices, expansion of data center contract with Amazon at the Susquehanna nuclear plant & new data center contracts at TLN’s gas plants.”
9. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 86
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing. On March 11, the company announced that it has signed a new strategic partnership agreement with imec, a leading research and innovation hub in nano-electronics and digital technologies, focused on semiconductor research and sustainability.
The five-year partnership agreement will leverage ASML’s complete product portfolio, including 0.55 NA EUV, 0.33 NA EUV, DUV immersion, and other advanced technologies, with the tools installed in imec’s pilot lines to accelerate advancements in semiconductor technology, memory, and AI applications. A pilot line is a pre-commercial production line used to test new technologies and processes before full-scale production. Besides research and sustainability, the new partnership between ASML and imec will also fund innovative ideas and activities in imec’s research funnel to drive environmental and societal benefits.
“This agreement marks the next step in the longstanding co-operation between ASML and imec. It signals our joint ambitions to develop solutions for the semiconductor industry and fits our strategy of investing in technology and innovation that will benefit society at large.”
– ASML’s president and CEO Christophe Fouquet
8. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 126
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On March 11, Matthias Volkert from DZ BANK AG maintained a “Sell” rating on the stock.
A day earlier, UBS analysts also revised their outlook, lowering the price target from $259.00 to $225.00 while retaining a “Sell” rating. The firm’s sell rating stems from weaker-than-expected Q4 results, reduced Q1 2025 delivery forecast, and signs of softer demand.
Even though DZ Bank and UBS both have a sell rating on the stock, Morgan Stanley has an “Overweight” rating with a $430 price target. The analyst told investors in a research note that the stock is down from its December highs, and that the pullback is a buying opportunity for the “embodied AI compounder”.
7. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 162
Salesforce Inc (NYSE:CRM) is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce. On March 11, the company announced plans to invest USD 1 billion in Singapore over the next five years, boosting the nation’s digital transformation and Agentforce adoption. With businesses increasingly embracing Agentforce, Singapore is an important growth market for the company.
Not only will the investment support Singapore’s National AI Strategy 2.0, but it will also help the country manage its slowing growth rate of the labor force, which is characterized by an aging population and declining birth rates. Enterprises in Singapore will be able to develop countless digital workforces that will enable them to unlock new levels of productivity, innovation, and growth.
“We are in an incredible new era of digital labor where every business will be transformed by autonomous agents that augment the work of humans, revolutionizing productivity and enabling every company to scale without limits. Singapore is at the forefront of this shift, and as the world’s largest provider of digital labor through our Agentforce platform, Salesforce is thrilled to expand our work with the business community and our longtime partners in the region to drive innovation, productivity and growth.”
-Marc Benioff, Chair and CEO, Salesforce.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company. One of the most notable analyst calls on Wednesday, March 12, was for Apple Inc. Morgan Stanley reiterated the stock as “Overweight” but lowered its price target to $252 per share from $275. The firm said that it is sticking with the stock. The rating follows Apple’s announcement that AI-powered updates to Siri have been delayed.
“The delayed rollout of a more advanced Siri means Apple will have fewer features to accelerate iPhone upgrade rates in FY26, and as a result, we reduce our CY25/CY26 iPhone shipments 1- 5%, to 230M and 243M, respectively.”
5. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 186
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) produces and sells a range of semiconductor devices for industries like smartphones, automotive, IoT, and high-performance computing worldwide. On March 12, Reuters reported that TSM has proposed U.S. chip designers Nvidia, Advanced Micro Devices, and Broadcom about taking stakes in a joint venture that would operate Intel’s factories.
According to the sources in the report, TSMC has proposed to operate Intel’s foundry division which customizes chips for clients. However, it would not own more than 50%. These talks, albeit at an early stage, come after U.S. President Donald Trump’s administration requested TSMC to help turn around Intel. Any final deal would need approval from the Trump administration, the report noted.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On March 11, TD Cowen reiterated its “Buy” rating on the stock with a price target of $175. According to the firm’s analyst Joshua Buchalter, Nvidia is “The Accelerated Computing Leader,” and its “suite of superior technology, long pedigree of innovation, and extensive growth-oriented investments” will result in substantial long-term returns.
Buchalter engaged in investor discussions with Nvidia’s VP of Healthcare, Kimberly Powell, and views healthcare as “one of NVIDIA’s largest, and most important, future AI opportunities.” The global healthcare industry, worth an estimated $10 trillion, has 30% spent on workers, labs, and physical facilities. Nvidia believes accelerated computing can help improve these areas. As of FY26, Buchalter anticipates that the company will earn over $1 billion from healthcare.
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
On March 12, Evercore ISI reiterated the stock as “Outperform”, stating that the search giant remains a top pick.
“While our survey suggests Search competition, it also suggests no notable change or slippage in Google’s share of highly commercial intent Search use cases while indicating that Google’s Gen AI innovations are creating an overall better Search Engine for users…”
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $220 implies a 32% upside, however, the Street-high target of $250 implies an upside of 49.6%.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On March 12, Reuters reported that France’s leading publishing and authors’ associations have filed a lawsuit against U.S. tech giant Meta. The lawsuit alleges that Meta has used their copyright-protected content on a massive scale without authorization to train its artificial intelligence (AI) systems. The National Publishing Union (SNE), the leading professional publishing association, the National Union of Authors and Composers (SNAC) and the Society of Men of Letters (SGDL), said that they have filed a complaint against Meta earlier this week in a Paris court for alleged copyright infringement and economic “parasitism”.
“It’s a bit of a David versus Goliath battle. It’s a procedure that serves as an example.”
-SNE Director General Renaud Lefebvre.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On March 11, CNBC reported that the company is open to deploying natural gas with carbon capture technology to power artificial intelligence data centers. Bobby Hollis, the company’s vice president of energy, said that the idea “absolutely would not be off the table.”
However, he said that Microsoft would consider natural gas with carbon capture only if the project is “commercially viable and cost competitive.” Despite its carbon-dioxide emissions, data center developers are increasingly opting for natural gas as a near-term power solution. Even the Trump administration is focused on boosting natural gas production.
“We’ve always been cognizant that fossil will not disappear as fast as we all would hope. That being said, we knew natural gas is very much the near-term solve that we’re seeing, especially for AI deployments.”
– Bobby Hollis
While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some 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 MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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