We recently compiled a list of the Top 10 AI Stocks Dominating Wall Street. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other AI stocks.
The artificial intelligence community is raving over a new reasoning model that has surprised even Silicon Valley. Developed by Chinese start-up DeepSeek, the r1 claims to match and even exceed OpenAI’s o1 by multiple benchmarks, and that too, at a fraction of the cost. A Chinese hedge-fund manager, Liang Wenfeng, has led the development of r1. Wenfeng has become the leading figure in the country’s AI initiative.
“Deepseek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen”.
-Marc Andreessen, Silicon Valley venture capitalist who has been advising President Trump.
While some specialists are saying that DeepSeek’s technology is a bit behind OpenAI and Google, it is still an achievement considering it has used fewer and less advanced chips. The country has also had to deal with US restrictions along the way, implying how DeepSeek either found a way around the rules or the controls weren’t stringent enough in the first place.
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Also developed by DeepSeek is its AI assistant, an artificial intelligence application that was released on January 10. The AI assistant is powered by the DeepSeek-V3 model and boasts over 600 billion parameters. It is designed to assist users by offering them seamless interactions, answering user questions, and enhancing daily tasks.
In the latest news, Reuters reports how the Chinese startup DeepSeek’s AI Assistant has overtaken rival ChatGPT to become the top-rated free application available on Apple’s App Store in the United States. According to its creators, the AI assistant “tops the leaderboard among open-source models and rivals the most advanced closed-source models globally”.
Both the r1 and AI assistant by DeepSeek are proof that China is getting closer to the US in the race toward supremacy in AI. While several Chinese tech companies have released tech companies over the past, DeepSeek has been particularly praised by the US tech industry for its innovation and achievements.
At the same time, there is skepticism regarding how these cheaper alternatives may question the pricing power of US tech giants and if their spending needs need to be re-evaluated.
“While it remains to be seen if DeepSeek will prove to be a viable, cheaper alternative in the long term, initial worries are centered on whether US tech giants’ pricing power is being threatened and if their massive AI spending needs re-evaluation”.
-Jun Rong Yeap of IG Asia.
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.
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).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a technology company that has recently launched Apple Intelligence, its personal intelligence system. On January 27, Rosenblatt Securities reaffirmed a “Buy” rating on Apple with a $262.00 target price. The firm stated that its expectations for the tech giant’s December quarter are low, as demonstrated by third-party data which has hinted at disappointing iPhone performance. Other firms such as UBS have also lowered their iPhone sales forecast for December due to declining demand and falling market share in China.
The tech giant is increasingly facing competition from Chinese smartphones like Huawei. These brands have integrated advanced AI features into their phones, offering more personalized user experiences. Moreover, while Apple’s new intelligence features for the iOS 18, iPadOS 18, and macOS Sequoia 15.1 updates are expected to boost sales in 2025 as it enters new territories, Huawei has announced substantial discounts for the New Year on its premium models.
“Expectations for Apple’s Dec. quarter are low, after 3rd party data suggesting a disappointing iPhone performance. But there are mitigating factors for the Dec. quarter fears, including lack of an earnings warning, and potential for services and other devices to make up some of the iPhone gap”.
– Rosenblatt Securities
Overall AAPL ranks 2nd on our list of the top AI stocks that are dominating Wall Street. 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.
