US President Donald Trump is strengthening global ties aimed at long-term cooperation. In its latest, he has announced Saudi Arabia’s $600-billion commitment to invest in the United States on the first day of a four-day tour of the Gulf, paving the way for a series of business deals. These deals aim to strengthen the U.S.’s energy security, defense industry, technology leadership, and access to global infrastructure and critical minerals.
READ ALSO: 9 AI Stocks Poised to Gain from Trump’s Middle East AI Push and 10 AI Stocks Making Moves This Week.
Only recently, the Department of Commerce announced that it was going to rescind President Joe Biden’s rule regarding AI chip exports and implement a “much simpler rule” instead. Fast-forward to Trump’s tour of the Gulf beginning Tuesday, global political and business leaders gathered in Riyadh to discuss topics such as the artificial intelligence boom and global trade.
The elimination of Biden’s rule made sense when a White House official made remarks about how the United States does not need to block the global spread of its AI chips and technology to control national security risks — comments that were made to reflect on the flexible approach being adopted by the US toward sharing advanced technology to trusted allies such as Saudi Arabia.
As evident, President Donald Trump met with Saudi Crown Prince Mohammed bin Salman and several deals were announced between the two countries, with Saudi Arabia benefiting from deals with top tech firms to advance artificial intelligence in the Kingdom. While Saudi Arabia is investing $600 billion in the U.S, the White House also publicized a nearly $142 billion deal to provide the Kingdom with weapons and services from U.S. defense firms.
Nvidia CEO Jensen Huang announced a deal to provide Saudi Arabia with its high-end AI Blackwell chips, amongst deals made by other notable firms such as AMD, Uber, Cisco, and Amazon. Some notable attendees besides Huang included Elon Musk, Andy Jassy, Sam Altman, President Ruth Porat, Arvind Krishna, Alex Karp, and Cristiano Amon.
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).
10. 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. On May 14, leading Saudi Arabian data center company DataVolt announced the signing of a multi-year partnership agreement with Super Micro Computer Inc. (Supermicro). The $20 billion deal marks a major milestone for artificial intelligence and data center solutions, enabling the fast-track delivery of ultra-dense GPU platforms and rack systems for DataVolt’s hyperscale AI campuses in both the Kingdom of Saudi Arabia and the US.
“We are excited to partner with DataVolt and continue expanding our manufacturing efforts in the United States. By working together, we will bring cutting-edge AI and compute infrastructure, enabling the Kingdom’s vision of becoming a global hub for technology and innovation.”
-Charles Liang, President and CEO of Supermicro.
9. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 96
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications. On May 14, Bank of America reiterated Nvidia & Advanced Micro Devices as “Buy” and raised its price target on both stocks.
“We reiterate Buy, raise NVDA PO to $160 from $150 and AMD PO to $130 from $120 on upside to long-term AI opportunity.”
The ratings have been issued after the companies announced multi-year AI infrastructure projects with Saudi Arabian AI startup HUMAIN. The firm believes the project is likely to be around $3B-$5B annually, and that “Sovereign AI” can help deal with the challenges of limited power availability for data centers in the U.S. It may also reduce the impact of export restrictions on US companies shipping to China, the firm noted.
8. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 107
Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally. On May 14, Morgan Stanley reiterated the stock as overweight with a $180 target. The firm deemed the stock a “catalyst-driven idea” heading into earnings on May 15.
“We think Alibaba will benefit from the robust China AI inference demand, being the AI enabler (cloud) and adopter. We believe upcoming cloud revenue growth will be the next share price catalyst.”
7. 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 May 13, Morgan Stanley analyst Adam Jonas maintained a “Buy” rating on the stock with a $410.00 price target. The firm believes that Tesla has the potential to grow beyond electric cars, particularly in the landscape of physical AI and international trade relations. The recent easing of trade tariff tensions is seen as a positive catalyst for the company, allowing for greater cooperation between the US and Chinese manufacturing sectors.
The increased cooperation will allow for advancing AI-adjacent manufacturing, where China is supposedly leading. The analyst further noted that Tesla may serve as a key player in bringing advanced Chinese tech into the US, and that competing in artificial intelligence doesn’t mean that countries need to be isolated. Moreover, improved Sino-US relations and reduced focus on tariffs are likely to create a more favorable environment for Tesla’s growth.
6. 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 May 13, Michael Turrin from Wells Fargo maintained a “Hold” rating on the stock with a price target of $255.00.
On the same day, Reuters reported that the White House has revealed how a Saudi Arabian firm, DataVolt, will be investing $20 billion in AI data centers and energy infrastructure in the United States. Moreover, Salesforce Inc., along with tech firms such as Advanced Micro Devices and Uber, will invest $80 billion in trailblazing transformative technologies in both countries.
A few days prior, Bloomberg reported that Salesforce has already begun building its team in Saudi Arabia as part of a plan to invest $500 million over the next five years to boost the adoption of artificial intelligence in the kingdom.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company known for its consumer electronics, particularly the iPhones and MacBooks. On May 14, Loop reiterated the stock as “Hold.” After a lookahead analysis of Apple’s iPhone product pipeline, the firm believes there is much work to be done for the tech giant.
“As Loop’s AAPL coverage has been highlighting for the past 12-18 months the ongoing AI struggles, move to the internal modem, integrating internally designed chips at higher velocity, and navigating a stagnant iPhone device strategy, there is no shortage of challenges to discuss as AAPL seeks to get its mojo back.”
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $235 implies an 11% upside, however, the Street-high target of $308 implies an upside of 45%.
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. One of the most notable analyst calls on Wednesday, May 14, was for Nvidia Corporation. Citi reiterated the stock as “Buy” and set a $150 price target. The firm said it’s sticking with Nvidia after the company announced that it will send chips to Saudi Arabia.
“We see NVDA’s deal with Saudi company HUMAIN as a good start to what will likely be a new country-to-country negotiation approach by the US government. That said, we remain prudent on the duplication of such success with other countries, thus the risk of tighter access to US AI chips for other key countries remains.”
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 May 13, CNBC reported that the Google search button has a new neighbor known as the “AI Mode.” The new feature is being directly beneath the Google search bar beside a “Google Search” button and will be replacing the “I’m Feeling Lucky” widget. Even though the AI feature is not widely available yet, a company spokesperson has confirmed that the feature began rolling out to some users over the past week. The spokesperson has informed that Google tests many experiments with its users in its experimental unit “Labs,” but that the tested products do not always go on to launch broadly.
2. 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 May 14, JPMorgan reiterated the stock as “Overweight with an unchanged target price of $475.” The firm said it’s standing by the stock after a series of bullish meetings with management.
“Microsoft shares that it saw demand in FQ3 that was ‘strong across the board’, including all geographies and customer segments (spanning large to scale customers).”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. On May 13, American cloud computing company PagerDuty renewed its global strategic collaboration agreement (SCA) with Amazon Web Services (AWS) to leverage AWS’s advanced generative AI services within its AI-first platform called PagerDuty Operations Cloud.
The renewed collaboration will help PagerDuty to enhance the platform’s ability to detect and resolve IT problems using artificial intelligence. The PagerDuty platform allows teams to detect and diagnose disorderly events, and alert the right people to respond and streamline infrastructure and workflows. More than 6,000 joint customers will be able to leverage the capabilities of the PagerDuty Operations Cloud to manage their business through AI and automation.
“The integration of AWS advanced AI capabilities, including the Amazon Q index, creates a powerful combination to address critical customer needs for operational resilience. The AWS and PagerDuty strategic collaboration agreement builds on our long-standing relationship to help organizations transform how they detect, respond to and prevent operational disruptions. Now, with the PagerDuty solutions available in AWS Marketplace, we’re making it easier than ever for our shared customers to implement digital operations management that keeps their businesses running smoothly and their customers satisfied.”
-Chris Grusz, Director of AWS Marketplace and ISV Alliances at AWS.
While we acknowledge the potential of AMZN 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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