We recently compiled a list of the 10 AI News Investors Should Not Miss. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other AI stocks you should not miss.

Tom Hainlin, national investment strategist at US Bank Asset Management Group, states that the two things to look for in the earnings season are consumer spending and companies’ spending on technology, particularly artificial intelligence. Recent reports from the financial sector and retailers suggest that consumers are in good financial shape, setting the stage for a promising holiday season as well as providing a solid opportunity for growth in the fourth quarter. He further states how third-quarter earnings reports show that AI-focused companies, from software to hardware and even the energy providers that power their data centers, are receiving an inordinate amount of CapEx and continue to benefit from it.

READ ALSO: 15 AI News Investors Should Not Miss  and Top 10 Trending AI Stocks in Q4

Sometimes, these AI-related names are a bit overvalued and there is volatility; but the long-term thesis remains strong. In fact, these “down days” can provide a significant point of entry for investors. According to BofA Securities market analysts Ohsung Kwon and Savita Subramanian, a major “AI arms race” is happening amongst major tech companies. According to their calculations, the capital spending this year from the four major megacaps making AI bets will total $206 billion, up 40% over 2023. Meanwhile, the capital spending by the other 496 companies in the S&P 500 Index is projected to dip slightly, as per their findings.

Just like the long-term outlook for AI stocks remains strong, so is the market enthusiasm for these names. Even though it is unclear which companies are going to emerge as the long-term winners, exchange-traded funds focused on AI continue to flood the market. According to data from Morningstar, more than one-third of the ETFs that included artificial intelligence or AI in their name have launched this year alone. Several ETFs have been added to the list recently, with one that has rebranded and shifted focus from cloud computing to specifically AI. Senior analyst Daniel Sotiroff states how he isn’t surprised by recent market developments. It’s a fast-moving and fast-growing industry, he claims, and it is “easy to hope” that one could end up making a lot of money in a short period of time. The 200% plus stock gain by Nvidia over the past year, “reaffirms that confidence”.

With that said, artificial intelligence has been making its mark everywhere it goes. In its most recent development, AI startup Sierra, co-founded by Bret Taylor, Chairperson of OpenAI, has increased its valuation to $4.5 billion after a new $175 million funding round led by Greenoaks Capital. Sierra specializes in helping companies personalize and implement AI-driven customer service agents.

“We think every company in the world, whether it’s a technology company or a 150-year-old company like ADT, can benefit from AI, and the technology is ready right now. We want to enable Sierra to address that market, and that means expanding internationally and to other industries.”

-Taylor told CNBC in an interview.

In other news, Osmo, a digital olfaction company, has launched three new scent molecules through its proprietary artificial intelligence technology. While captive molecules play a significant role in fragrance development, traditional methods of captive discovery have been time-consuming and expensive. Osmo’s AI-driven approach strives to overcome these challenges, reduce costs, and speed up the process both.

“Our AI technology enables us to screen billions of molecules at a rate that would be impossible for humans. This not only speeds up the discovery process but also allows us to identify captives with desirable performance and ‘special effects’, regulatory compliance, and consumer safety.”

– Christophe Laudamiel, The Company’s Master Perfumer

Advancements such as these are, no doubt, leading us to bridge the gap towards achieving AGI- or artificial general intelligence. AGI is a type of artificial intelligence that can match or even surpass human cognitive capabilities across a wide range of cognitive tasks. However, some experts are cautious about AGI. This is what Miles Brundage, former senior advisor for OpenAI’s AGI Readiness, has to say about achieving AGI, alongside his departure from the company:

“Neither OpenAI nor any other frontier lab is ready, and the world is also not ready”.

With that, let’s take a look at the latest AI stocks that are making headlines right now.

Our Methodology

For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.

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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 184

Apple Inc. (NASDAQ:AAPL) is an American technology company engaged in the design, manufacture, and marketing of smartphones, tablets, PCs, wearables, and accessories worldwide. Apple is considered a very important AI stock, having integrated a slew of AI capabilities into its products and services.

In September, Apple Inc. (NASDAQ:AAPL) announced that it will be launching its most important product next month. Apple Intelligence, the company’s personal intelligence system, is a suite of software tools that brings what the company describes as artificial intelligence to its devices. On October 28, the company made these artificial intelligence tools available to a select few models of the iPhone through a software update. The new AI tools are available to people with the latest devices, such as the iPhone 16 models, and the iPhone 15 Pro and Pro Max. From notification summaries and tools to assist users in writing messages, as well as a glowing new interface for virtual assistant Siri, there are a lot of exciting features. Apple Intelligence is also available on Mac computers and iPad tablets that are powered by its latest chips.

Overall AAPL ranks 3rd on our list of the AI stocks you should not miss. While we acknowledge the potential of AAPL 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 timeframe. If you are looking for an AI stock that is more promising than AAPL 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.