Users are adopting artificial intelligence tools at an unprecedented pace. As reported by Reuters, OpenAI weekly active users surged past 400 million in February, reinforcing the observation. The artificial intelligence startup had 300 million weekly active users in December 2024, signifying an increase of 100 million users. Furthermore, the company’s paying business users also crossed 2 million in February, a figure that has more than doubled from its last update in September 2024.
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With OpenAI boasting its successes despite DeepSeek’s emergence, other tech companies are also joining in the parade. xAI, led by Musk, has recently revealed Grok3, the latest iteration of its chatbot. This innovation is in direct competition with AI models by companies such as OpenAI and DeepSeek. It is being rolled out immediately to Premium+ subscribers on X. xAI is also launching a new subscription tier, SuperGrok. This would be for users accessing the chatbot via its mobile app and Grok.com website.
“Grok-3 across the board is in a league of its own”.
-Musk said during a livestream alongside three xAI engineers.
Analysts are also pouring in their comments about xAI’s latest innovation.
“The introduction of Grok-3 puts xAI back in the race for leadership in open-source LLMs. It outperforms the current state-of-the-art models on some benchmarks, which makes xAI relevant again”.
– Gil Luria, managing director at D.A. Davidson.
While Luria did point out xAI’s relevancy in the leadership in open-source LLMs, it was also noted that improvements over the Grok-2 model appear to be too small to justify the enormous resources used to train it.
Meanwhile, Anthropic, another AI startup, is doing its best to catch up with firms such as OpenAI. More than a week ago, the company projected that its revenue could reach as high as $34.5 billion in 2027. The report revealed that in a base case scenario, Anthropic’s revenue would reach $12 billion in 2027, up from $2.2 billion in 2025. Back in January, Reuters also reported how Anthropic is nearing a deal to raise $2 billion at a price that values the company at $60 billion.
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.
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10. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 42
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers. On February 20, Roth MKM analyst Chip Moore maintained a “Hold” rating on the stock and set a price target of $25.00.
A day prior, it was revealed that Bloom Energy’s CCO Aman Joshi sold 13,971 shares of the stock, amounting to a total transaction value of $353,466.
The company was also recently in the news after it announced a carbon capture partnership with equipment manufacturer Chart Industries. The collaboration will allow easily deployable power solutions that meet emission targets for customers such as data centers and manufacturers.
9. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 63
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. One of the biggest analyst’s calls for Thursday, February 20, was for Palantir Technologies Inc. Loop Capital initiated the stock as “Buy” with a $141 price target, stating that Palantir is a “game-changing software play.” Even though the stock is expensive, analyst Mark Schappel remains bullish on its longer-term outlook.
“Palantir is leveraged to the AI (and GenAI) themes sweeping through the tech sector, which are enormous market opportunities likely to create several multi-billion dollar revenue companies.”
Schappel also said investors should use pullbacks as buying opportunities.
“It’s hard to put a price on the opportunity, so we believe the best strategy is to hold your nose on valuation and just get involved”.
The company’s leadership in enterprise AI is a major growth catalyst for Palantir. Moreover, its Ontology platform, a software solution by Palantir, is its “secret sauce, said the firm. Oncology presents data to users in their terms instead of technical database terms, allowing the successful deployment of AI-driven decision-making.
The investment “picture consists of being exposed to the largest and fastest growing TAM in enterprise software”.
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