The latest quarterly results from a couple of major technology companies have soothed concerns about AI demand that prevailed in the market following the launch of DeepSeek. Storm Uru, Manager at Liontrust Global Dividend Fund, said while talking to CNBC that the Satya Nadella-led tech giant’s results were “extraordinary.”
“50% of that growth came from AI revenue, and that’s an important marker for us going forward. Because after Deepseek about four months ago now, the debate really was around as digital intelligence gets smarter and as it gets cheaper, what is going to be the impact on demand. And what we found out last night was that demand is accelerating,” he said.
David Grain, Founder & CEO of Grain Management, also believes AI demand could be strong amid a variety of factors.
“The advent of AI has created this explosion of demand for data centers and compute power, but the drivers of where it makes sense to actually build these data centers has a lot to do with the availability of reliable and high quantity of electricity. So I think there’s definitely no slowdown in the demand side of the equation,” he said during an interview with CNBC.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
For this article, we picked 10 stocks making moves these days. With each stock, we have mentioned the number of hedge fund investors. 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. BHP Group Ltd (NYSE:BHP)
Number of Hedge Fund Investors: 22
Jim Cramer was recently asked about mining company BHP Group Ltd (NYSE:BHP). He said he likes the stock.
“I like BHP Broken Hill. I remember it was Broken Hill Properties—that’s how old I am, holy cow. But I like the story. I like the yield. I think you’ve got a good situation going there.”
9. MicroStrategy Inc (NASDAQ:MSTR)
Number of Hedge Fund Investors: 25
Jim Cramer was recently asked about MicroStrategy. He reiterated his view that one should buy Bitcoin for crypto exposure.
“Oh, Mr. Old Mr. Tragedy, no, no. Look, we like Bitcoin. We actually buy Bitcoin. That’s what we do. We want Bitcoin, we buy Bitcoin.”
Greenlight Capital stated the following regarding MicroStrategy Incorporated (NASDAQ:MSTR) in its Q4 2024 investor letter:
“There is an open debate as to whether Bitcoin will at some point enter the mainstream as an official currency. In fact, there is a bill before Congress for the U.S. to establish a “Strategic Bitcoin Reserve” and buy one million Bitcoins over five years. The bill’s purpose appears to be the use of public funds to ramp up the price of Bitcoin, thereby enhancing the wealth of existing Bitcoin holders. This seems a dubious use of taxpayer funds, but the new administration has a lot of Bitcoin-owning supporters, so it might happen. More likely, cooler heads will decide that the government should not borrow another trillion dollars in the bond market to speculate in Bitcoin and that there is, in fact, nothing strategic about doing so.
One of the biggest owners of Bitcoin is MicroStrategy Incorporated (NASDAQ:MSTR). While MSTR owns a small software business, its principal pursuit is buying Bitcoin. In practice, MSTR is an investment company that buys and holds Bitcoin.2 MSTR trades at a large premium to the value of the underlying Bitcoin it holds. The idea is to raise money from new investors at a premium and use the proceeds to buy more Bitcoin. Since the Bitcoin that MSTR buys costs less than the Bitcoin-implied value of MSTR’s stock, the new investment is dilutive to new investors but accretive to existing investors. MSTR’s promoters have labeled the return to existing investors created by this scheme the “Bitcoin yield”. As Bitcoin itself yields nothing, the Bitcoin yield is simply a measure of the Ponzi finance’s effectiveness. Lately, it has been pretty effective.”
8. Super Micro Computer Inc (NASDAQ:SMCI)
Number of Hedge Fund Investors: 33
Jim Cramer was recently asked about Super Micro. Here is what the CNBC host said:
“I’m sick of Super. It’s the not so Super Micro. If you want to be in that space, let’s just go by Dell. And I got to tell you, can I just say that if anyone’s going to keep on picking an Nvidia, I live right here. Come get me. Okay? And me and Jensen.”
Columbia Acorn Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q3 2024 investor letter:
“Super Micro Computer, Inc. (NASDAQ:SMCI) had a tough quarter due to a confluence of negative events. It declined, but is still up significantly for the year. While demand for the company’s AI server racks remains strong, with revenue up over 100%, gross margins have fallen sharply for two straight quarters, implying a price war. In addition, Super Micro was the subject of a short-seller report and a delay in filing its annual report with the SEC. We have been taking profits in the stock all year and have only a small position, which we are maintaining given the strong performance and demand for Super Micro’s AI racks and a depressed stock valuation.”
7. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Investors: 38
A caller recently asked Jim Cramer about Arm Holdings plc (NASDAQ:ARM) during the Lightning Round segment of his program on CNBC. Cramer recommended the stock to hold the stock and “trim” when it bounces:
“I want you to stay in it, Rene Haas (CEO) is doing a great job. I think that this whole semiconductor group has been oversold. It will bounce, and when it bounces, you want to trim back because it is expensive. That’s fine. Do not sell it here.”
6. The Boeing Company (NYSE:BA)
Number of Hedge Fund Investors: 52
Jim Cramer in a latest program on CNBC talked about a bullish note on The Boeing Company (NYSE:BA) and recommended investors to buy the stock:
“Boeing—there’s a really good note out by Bernstein today saying once Boeing gets the momentum going, you can’t stop it. That last quarter was good. I’ve got to tell you, Kelly Ortberg—nice guy—I was concerned that perhaps the difficulties there would overwhelm him. I think he’s taming them, David. I think Boeing has a multi-year runway, haha, and I think therefore you should be buying Boeing. And remember, David, you got me out of Boeing at 260—I never forgot it.”
Sound Shore Management stated the following regarding The Boeing Company (NYSE:BA) in its Q4 2024 investor letter:
“The Boeing Company (NYSE:BA): A detractor for the period was global aerospace leader Boeing. We were able to purchase the stock at a prospective 10% free cash flow yield on a normalized scenario. Over the past couple of years the stock rebounded from operational challenges and had surged on improved free cash generation from increasing order activity, driven by global demand for aircraft. It was one of our best performers in the fourth quarter of 2023 after its November plane deliveries increased. When additional manufacturing issues surfaced in January 2024, we believed it would push restructuring efforts back enough to warrant a review by our team. Reacting quickly, we sold our position at a gain in the first quarter, albeit less than before the news.”
5. UnitedHealth Group Inc (NYSE:UNH)
Number of Hedge Fund Investors: 112
UNH was falling after the company announced a CEO transition and suspended its guidance amid rising medical costs. A few days ago, Jim Cramer had talked about the stock and gave some bullish comments about it on CNBC.
“It’s going to be under pressure for some time because a lot of companies, really a lot of big pension funds and mutual fund managers, thought everything was perfect. But I am going to say today at $400, I would indeed start a position. I have been very negative on UnitedHealth Group Inc (NYSE:UNH) from 6:30 down to this caller right here. I would start a position at 400 bucks. That’s a big change for me.”
Parnassus Growth Equity Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:
“We sold two Health Care positions during the quarter, pharmaceutical company AstraZeneca and insurerUnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth’s business model is becoming higher-risk, which coupled with slowing Medicare Advantage growth and regulatory uncertainty led to us exiting the position.
After the UnitedHealth stock price recovered to its historical multiple in early November, we felt it was an opportune time to sell based on our concerns about slowing Medicare Advantage growth and the company’s growing business complexity and risk.”
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