On January 27th, US and European tech stocks witnessed a $1 trillion sell-off, with most of the “magnificent seven” stocks trading in red as China’s new DeepSeek AI model rattled investors. The AI model was supposedly built for less than $6 million, which is a stark contrast to the billions spent by rivals. The DeepSeek app, launched late last week, has become the top-rated free app on the Apple App Store in the US and the UK.
As investors question America’s dominance in AI, the sector continues to drive innovation and rapidly achieve milestones across diverse industries. The Global Artificial Intelligence Industry Forecast revealed that the global AI market was worth almost $62.35 billion in 2020 and will grow at a 40% CAGR between 2021 and 2026. Most importantly, AI is helping the world achieve the net-zero emissions goal, playing a key role in the global energy transition through greater operational efficiency.
“Academia needs to be a player here, as a neutral ground to recognize some of these issues and develop systems in a different way,” said Stanford HAI Vice Director James Landay during the 2025 WEF in Davos. “Academia is also an interdisciplinary player—we have experts in law, medicine, history, social sciences, computer science, art, and design, coming together to ask questions, rather than tech companies focused primarily on a profit motive. We need academia and non-government organizations to have a say and play in this game and question this power dynamic.”
This article focuses on the latest stock ratings and analyst calls on AI companies involved in digital advertising, drone technology, and cloud providers to cybersecurity, telecom, defense, and energy generation.
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 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 financial analyst looking at a monitor filled with stock market charts of U.S. listed semiconductor companies.
10. Palladyne AI Corp. (NASDAQ:PDYN)
Number of Hedge Fund Holders: N/A
Palladyne AI Corp. (NASDAQ:PDYN) is a robotics developer known for its advanced AI and ML software platform that is transforming the observation, learning, reasoning, and acting capabilities of robots with reduced data sets, minimal power requirements, and faster training time. The AI software can be integrated with most commercial robots to boost their real-time environmental awareness and enable swift adaptability to task variances without reprogramming, fostering high levels of autonomy and safety.
On January 27th, Alliance Global Partners started coverage of Palladyne AI Corp. (NASDAQ:PDYN) with a $15 target price per share and a “Buy” rating. The brokerage pointed out how the company’s AI software is leveraged to train mobile and static robotic systems, enabling them to adapt to dynamic situations. The brokerage stressed that the Palladyne AI Corp.’s (NASDAQ:PDYN) contract to provide AI-based training for Red Cat Holdings’ (NASDAQ:RCAT) drones is “providing validation” and that a “solid pipeline will lead to further adoption in a variety of industries.” The analyst noted that the firm forecasts revenue of $6.1 million this year and $12.3 million in 2026.
9. Viant Technology Inc. (NASDAQ:DSP)
Number of Hedge Fund Holders: 11
Viant Technology Inc. (NASDAQ:DSP) is a top AI-backed programmatic advertising company transforming campaign management. Their omnichannel platform is designed for Connected TV (CTV) advertising. It enables marketers to optimize spending to lower CPM costs, leverage AI recommendations to improve campaigns and streamline campaign setup for actionable insights about target audiences.
On January 27th, JMP Securities lifted Viant Technology Inc.’s (NASDAQ:DSP) price target to $25 from $17 while maintaining an “Outperform” stock rating. The brokerage is “broadly positive” into Q4 digital advertising earnings, as the advertising company forecasts a healthy advertising environment, driven by strong consumer spending over the holiday period, the contribution of political ad spend, and improving business sentiment.
Hedge Fund Resource Center