We recently published a list of the 10 AI Stocks Making Headlines This Week. In this article, we are going to take a look at where Salesforce, Inc. (NYSE:CRM) stands against other AI stocks that are making headlines this week.
China is aggressively working to close the AI competitiveness gap with the United States. According to CEO of Chinese startup 01.AI Lee Kai-fu, the country is now as close as three months in some areas. This is because companies such as DeepSeek have figured out how to use chips and apply algorithms more efficiently.
Lee has told Reuters that startup DeepSeek has said that China has pulled ahead in areas such as infrastructure software engineering, severely challenging the US’s attempts to hold back China’s AI sector through its sanctions.
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“Previously I think it was a six to nine month gap and behind in everything. And now I think that’s probably three months behind in some of the core technologies, but actually ahead in some specific areas.”
-Lee Kai-Fu
At the same time, a report by MIT Technology Review reveals how 80% of China’s newly built computing resources remain unused.
“The growing pain China’s AI industry is going through is largely a result of inexperienced players—corporations and local governments—jumping on the hype train, building facilities that aren’t optimal for today’s need.”
-Jimmy Goodrich, senior advisor for technology to the RAND Corporation.
That said, energy is being wasted, data centers have become “distressed assets,” but the country is doing all it can to stay ahead in the AI arms race.
While sanctions from the US had been successful in curbing China’s progress toward AI, they were only successful in the short term. The country has now learned to operate under constraints, developing its own algorithms and open-sourcing technologies to reduce reliance on Western technology.
Some experts even assert that China’s open-sourcing strategy may become strong enough to challenge the West’s model of AI monetization.
“The fact that DeepSeek are able to figure out the chain of thought with a new way to do reinforcement learning is either catching up with the U.S., learning quickly, or maybe even more innovative now.”
-Lee
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.
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).
A close-up of a computer monitor showing a complex web of cloud-based technology.
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 26, Kirk Materne from Evercore ISI maintained a Buy rating on the stock with a price target of $420.00. The analyst stated that even though Salesforce continues to evolve its pricing model, many customers are waiting for more predictable pricing for the offering. The Agentforce platform enables clients to deploy artificial intelligence-powered agents that are capable of performing various tasks across an enterprise.
“While we understand the trepidation regarding usage pricing in terms of visibility/CRPO, our customer discussions indicate the vast majority of enterprises are going to want pricing that is more predictable (i.e. pre-buy or up-front commit).”
-Evercore analysts, led by Kirk Materne, in a Wednesday investor note.
Data cloud and AI annual recurring revenue totals more than $900M, with about $600M stemming from Data Cloud and the rest from Agentforce, Slack AI, and Assisted Agents.
“On the agent front, see customers experimenting across a number of vectors in terms of traditional front office competitors (i.e. MSFT), start-ups, and LLM vendors (DIY route). Believe that the time to value offered by Agentforce ultimately wins out against DIY at most enterprises.”
Overall, CRM ranks 6th on our list of AI stocks that are making headlines this week. While we acknowledge the potential of CRM 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 CRM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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