The US AI industry is witnessing a wave of new developments led by Elon Musk’s $97 billion bid to takeover OpenAI, the same company he co-founded with Sam Altman. The OpenAI CEO rejected that offer and added that Musk is acting out of insecurity rather than genuine interest.
The engagement got interesting when Altman counteroffered to buy X.com for $9.74 billion. The clash between the two AI leaders is ongoing amid a broader power struggle over the future of AI.
In his recent blog post, Altman highlighted three observations about the economics of AI: “The intelligence of an AI model roughly equals the log of the resources used to train and run it; the cost to use a given level of AI falls about 10x every 12 months, and lower prices lead to much more use; and that the socioeconomic value of linearly increasing intelligence is exponential.
“If these three observations continue to hold true, the impacts on society will be significant,” noted Altman. “We are now starting to roll out AI agents, which will eventually feel like virtual co-workers.”
Elsewhere, the UK and the US didn’t sign an international agreement on AI at the Paris Global Summit. The US agreement, which pledges an open, inclusive, and ethical approach to AI development, was signed by dozens of countries, including France and China.
The UK government cited concerns around national security, while US VP JD Vance told delegates in Paris earlier that excessive regulation of AI could hamper a transformative industry, which is just taking off.
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).
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10. Primech Holdings Ltd. (NASDAQ:PMEC)
Number of Hedge Fund Holders: N/A
Primech Holdings Ltd. (NASDAQ:PMEC) offers technology-driven solutions and products used in the cleaning and maintenance of public and private facilities.
On February 11th, the company’s subsidiary, Primech AI, an emerging robotics firm, announced the execution of three pilot program contracts for its AI-powered HYTRON cleaning robots with three leading Singapore-based cleaning firms. The two-year agreements involve deploying HYTRON units in facility operations across diverse sectors, expanding the firm’s market outreach. Note that the HYTRON units are powered by the Nvidia Jetson Orin Super system-on-module, designed for robust edge AI and robotics use cases, and are expected to improve hygiene standards and operational efficiency at facilities.
9. Blaize Holdings Inc. (NASDAQ:BZAI)
Number of Hedge Fund Holders: N/A
Blaize Holdings Inc. (NASDAQ:BZAI) develops AI-enabled, edge-optimized hardware and software interfaces that enable real-time AI processing directly on devices like sensors or machines to minimize dependence on cloud computing. Their full-stack hardware architecture and no-code software platforms focus on automotive, industrial, and smart city applications.
On February 11th, DA Davidson analyst Gil Luria initiated coverage of Blaize Holdings Inc. (NASDAQ:BZAI) with a “Buy” rating and a $10 stock price target. The analyst said the growing decentralization of AI systems is fueled by the need to process data nearer to its source. Luria believes the AI firm’s solutions that integrate hardware and software for on-device inference position it to become “a key player in AI-enabled edge computing.”
8. Nano Labs Ltd. (NASDAQ:NA)
Number of Hedge Fund Holders: N/A
Nano Labs Ltd. (NASDAQ:NA) is a leading integrated circuits (ICs) designer and product solutions provider. It is engaged in the development of AI hardware, high-performance and vision computing chips, storage solutions, and smart network interface cards (NICs)
On February 11th, Nano Labs Ltd. (NASDAQ:NA) announced that its AI inference device, YangTuo LLM workstation, completed the deployment of DeepSeek.
“By combining DeepSeek’s algorithms with Nano Labs’ advanced industrial design, Nano Labs provides comprehensive AI solutions for research institutions, enterprises, and developers, from computational power support to intelligent enablement.” the company stated.
7. Ecarx Holdings Inc. (NASDAQ:ECX)
Number of Hedge Fund Holders: 15
ECARX Holdings Inc. (NASDAQ:ECX) leverages AI to build automotive technology, including software, computing platforms, and system-on-a-chip (SoC) modules. The company strives to accelerate innovation in software-defined vehicles to offer a safer driving experience. The firm’s AI-powered offerings assist in sensing, decision-making, ADAS development, and predictive modeling, enabling the creation of full-stack solutions for EVs.
On February 11th, Ecarx Holdings Inc. (NASDAQ:ECX) stated that the first intelligent cockpit jointly developed with FAW Group will debut in the Hongqi Tiangong 05 all-electric sedan, launched in January.
“This marks a significant milestone in the deepening strategic partnership signed in April 2024 with FAW Group to develop next-generation intelligent cockpits for its premium Hongqi brand of vehicles. The Tiangong 05’s intelligent cockpit will be powered by ECARX’s Antora 1000 Pro computing platform and come integrated with customized Hongqi FAW OS on top of ECARX Cloudpeak and the recently upgraded ECARX AutoGPT in-vehicle AI large model application, setting a new industry benchmark with an immersive and AI-driven intelligent cockpit experience. To build this solution, ECARX and FAW combined their research and development capabilities and technological strengths over the past year to build an end-to-end value chain for the development of intelligent cockpits – from software and hardware design to system integration,” the company said.
6. PowerFleet Inc. (NASDAQ:AIOT)
Number of Hedge Fund Holders: 16
PowerFleet Inc. (NASDAQ:AIOT) offers “artificial intelligence of things” (AIoT) SaaS products that enable tracking, securing, and managing enterprise assets like vehicles, containers, and industrial trucks via wireless IoT technology. The company’s solutions allow clients to analyze data from mobile assets to improve operational efficiency and reduce overheads.
On February 11th, Northland increased PowerFleet Inc.’s (NASDAQ:AIOT) price target to $11 from $10 and maintained an “Outperform” stock rating after the firm’s Q3 results beat revenue and adjusted EBITDA estimates. The brokerage likes the “solid execution” in Q3, new high-value customer wins, strong results with its AI camera products, and continued advancement on its cost savings roadmap.
5. Radware Ltd. (NASDAQ:RDWR)
Number of Hedge Fund Holders: 17
Radware Ltd. (NASDAQ:RDWR) integrates AI into its cybersecurity and application delivery offerings, which clients use to track and mitigate complex cyber threats, including DDoS attacks, malicious bots, and web application vulnerabilities, across cloud, on-premises, and data center environments. The company’s “EPIC-AI” tech incorporates layers of AI capabilities across its product suite to secure applications and optimize overheads.
On February 12th, Radware Ltd. (NASDAQ:RDWR) reported earnings for the fiscal fourth quarter and full year 2024. The company’s revenue for Q4 amounted to $73 million and its full-year revenue was $274.9 million. The company’s GAAP net income was logged at $2.5 million, or $0.06 per share on a diluted basis.
“Our full-year results were driven by accelerated cloud ARR growth of 19%, the success of our DefensePro X DDoS protection refresh, and strong performance from our OEM partnerships,” said CEO Roy Zisapel. “Looking ahead, we plan to increase investment in and accelerate our cloud security growth by further expanding our market-leading AI-enabled security capabilities, opening new cloud security service centers and expanding our cloud channels.”
4. OneStream Inc. (NASDAQ:OS)
Number of Hedge Fund Holders: 24
OneStream Inc. (NASDAQ:OS) is a software company for corporate performance management (CPM). The company’s unified software platform uses AI and ML to enhance and automate complex financial planning, budgeting, reporting, analysis, and forecasting to manage and track a company’s financial performance across diverse functions.
On February 11th, OneStream Inc. (NASDAQ:OS) beat Q4 2024 revenue estimates of $128.1 million with a $132.5 million print. The company posted an EPS of $0.05 and beat estimates by $0.03.
“Capping a year of incredible innovation and solid execution, we posted 35% You subscription revenue growth in the fourth quarter, and were free cash flow positive and non-GAAP profitable,” said CEO Tom Shea. “In fact, 2024 was one of the most transformative years in our history, with the introduction of 15 new innovations, highlighted by our growing Finance AI portfolio. We’re excited to bring new products to market in 2025, paving the way for OneStream to become the operating system for modern Finance.”
3. Teradata Corp. (NYSE:TDC)
Number of Hedge Fund Holders: 25
Teradata Corp. (NYSE:TDC) is a cloud analytics and data platforms company focused on offering data warehousing and big data analytics solutions that help clients transform corporate data into business intelligence. It uses AI combined with its massively parallel processing database technology to enable clients to store, oversee, and process large data sets for faster and more accurate decision-making.
On February 11th, Teradata Corp. (NYSE:TDC) marginally missed Q4 2024 revenue estimates with a $409 million print, down 10.5% year over year. The company reported an EPS of $0.53 and beat estimates by $0.13.
“In 2024, Teradata took decisive actions to improve execution and met our guidance ranges for both Cloud and Total ARR. We believe we are well positioned to return to growth this year,” said CEO Steve McMillan. “Last year, we delivered significant AI technology, including broad support for OTFs, BYO-LLM and GPU-accelerated compute. We are excited about our upcoming innovations in 2025, which are designed to help our customers extend their hybrid AI environments and build towards an agentic AI future.”
2. Upstart Holdings Inc. (NASDAQ:UPST)
Number of Hedge Fund Holders: 29
Upstart Holdings Inc. (NASDAQ:UPST) offers an AI-powered lending platform to help consumers secure personal and auto refinance loans as well as home equity lines of credit. The company leverages ML to identify borrower risks and approve more borrowers at relatively lower interest rates.
On February 11th, Upstart Holdings Inc. (NASDAQ:UPST) posted Q4 revenues of $218.96 million, beating consensus projections of $181.92 million. The company attributed that results to dramatic growth across all product categories.
“Delivered Adjusted EBITDA at levels not seen since the first quarter of 2022, and came within a whisker of returning to GAAP profitability,” said CEO Dave Girouard. “We launched into 2025 with unparalleled energy and optimism for the future of Upstart AI lending and the mission we’re on together.”
1. Vertiv Holdings Co. (NYSE:VRT)
Number of Hedge Fund Holders: 91
Vertiv Holdings Co. (NYSE:VRT) designs and develops hardware and software solutions focused on power management, thermal systems, and lifecycle services for industrial, data centers, and communication networks. The company’s AI-ready power, cooling, and IT infrastructure products are capable of running AI workloads even during outages, minimizing reliance on utility providers. Vertiv Holdings Co. (NYSE:VRT) collaborates with Nvidia (NASDAQ:NVDA) and Intel Corp. (NASDAQ:INTC) to innovate AI cooling solutions to keep systems operational regardless of the cluster size.
On February 12th, Vertiv Holdings Co. (NYSE:VRT) announced that it beat Q4 revenue estimates with a $2.35 billion print and reiterated that it is well-positioned to support the surge in data centers for AI applications.
“Efficiency of compute has always been core to the industry. As technology advances to unlock the full potential of AI applications, it becomes more broadly accessible to everyone. With that accessibility comes a broader, more pervasive use of AI technology, which we believe would generate more data and therefore require more data centers. As a result, I am confident in the growth trajectory of Vertiv, and we are reaffirming the five-year financial framework we presented at our investor event last November,” said CEO Giordano Albertazzi.
While we acknowledge the potential of Vertiv Holdings Co. (NYSE:VRT) as an investment, our conviction lies in the belief that 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 VRT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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