President Donald Trump has recently announced a private sector investment to build more AI data centers, marking yet another effort by the US government to stay ahead in the race for supremacy in artificial intelligence.

A prominent player in the field has been OpenAI, the artificial intelligence startup known to have started the AI arms race in the first place. In its latest, OpenAI has recently previewed an AI agent that can carry out tasks on the web for users. This move seeks to enhance its chatbot amidst intensifying competition.

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Dubbed the “Operator”, the tool is powered by a model that allows it to interact with on-screen buttons, menus, and text fields.

“This capability marks the next step in AI development, allowing models to use the same tools humans rely on daily and opening the door to a vast range of new applications”.

– OpenAI said in a blog post.

OpenAI says Operator is “an agent that can go to the web to perform tasks for you”. As such, companies are increasingly using agents like these to assist in tasks and execute actions without direct human intervention. Currently available to Pro users in the US, the Operator can perform numerous tasks, such as creating to-do lists or assisting in planning vacations.

The company states that it eventually plans to expand the Operator to Plus, Team, and Enterprise users and will be integrating Operator into ChatGPT. It also revealed how the tool currently faces trouble with some tasks, such as managing calendars and creating slideshows.

“Operator is one of our first agents, which are AIs capable of doing work for you independently. You give it a task and it will execute it”.

– OpenAI.

Based on trends in artificial intelligence, agents are the next big advancement in the AI field. Even Nvidia CEO Jensen Huang agrees that they are. Artificial Intelligence agents are autonomous intelligent systems that can perform specific tasks without human intervention.

“AI agents are going to get deployed. I think this year we’re going to see it take off”.

According to him, areas such as software engineering, digital marketing, and customer service are the first where AI agents can add value. As for his company, it is already using AI agents in chip design.

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.

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).

10. Knightscope, Inc. (NASDAQ:KSCP)

Knightscope, Inc. (NASDAQ:KSCP) is an innovator in robotics and artificial intelligence (“AI”) technologies in public safety. On January 23, the company announced a major upgrade to its K5 Autonomous Security Robot (ASR), an AI-driven autonomous security robot, to expand its capabilities and sales opportunities. The upgrade includes an enhanced autonomous navigation system, enabling it to operate in larger and more complex environments. The K5 is now able to operate in untapped environments with ease. This includes spaces such as auto auction facilities and expansive parking lots. The upgrade has also led to a two-year agreement with the Ohio police department which will utilize the upgraded K5 ASR. They will be the first organization to leverage the updated technology. Knightscope expects further deployments of the K5 ASR as more organizations recognize the potential of robotics and AI to enhance public safety.

“This upgrade to the K5 represents a significant step forward for autonomous security technology. By equipping organizations to secure and remotely monitor larger and more complex areas with greater efficiency, we are not only meeting current security challenges but also paving the way for new applications and markets”.

-William Santana Li, Chairman and CEO of Knightscope.

9. Cadence Design Systems, Inc. (NASDAQ:CDNS)

Number of Hedge Fund Holders: 53

Cadence Design Systems, Inc. (NASDAQ:CDNS) is an American multinational technology and computational software company that delivers hardware, software, and IP for electronic design. On January 22, the leading EDA and Intelligent System Design provider announced that MediaTek, a Taiwanese semiconductor company, has adopted Cadence’s AI-driven tools Cadence® Virtuoso® Studio and Spectre® X Simulator on the NVIDIA accelerated computing platform for its 2nm development. MediaTek will be leveraging Cadence’s AI-driven custom/analog design solutions to achieve a 30% productivity gain, resulting in faster and more accurate chip design processes.

“MediaTek’s validation of our latest Virtuoso Studio release and Spectre X Simulator on NVIDIA’s accelerated computing platform demonstrates that Cadence’s continued investment in enhancing our industry-leading custom design solutions and AI tools is a game changer for our customers’ most challenging 2nm designs. Bringing the power of AI and GPUs to Spectre X enables MediaTek to solve its large-scale verification simulation challenges even more quickly, without sacrificing accuracy”.

– Vinod Kariat, corporate vice president and general manager of the Custom Products Group at Cadence.

8. KLA Corporation (NASDAQ:KLAC)

Number of Hedge Fund Holders: 61     

KLA Corporation (NASDAQ:KLAC) markets process control and yield management solutions for the semiconductor industry. On January 17, Barclays analyst Tom O’Malley lowered the firm’s price target on KLA Corp. (KLAC) to $700 from $750 and kept an “Equal-Weight” rating on the shares. The rating, issued as part of a 2025 outlook for the semiconductors and semiconductor capital equipment sector, revealed that the market is going to be divided into companies that benefit from artificial intelligence and those that do not. As such, the firm is more selective in its AI preferences, preferring those with proprietary serializer/deserializer technology.

7. Amphenol Corporation (NYSE:APH)

Number of Hedge Fund Holders: 69

Amphenol Corporation (NYSE:APH) designs, manufactures, and markets electrical, electronic, and fiber optic connectors. On January 23, Analyst Wamsi Mohan from Bank of America Securities reiterated a “Hold” rating on Amphenol and increased the price target to $85.00 from $75.00. One of the reasons for the hold rating for Amphenol has been the company’s recent financial performance and market conditions. Revenue and earnings for the fourth quarter of 2024 were better-than-expected and the company also provided strong guidance for the first quarter of 2025. Nevertheless, the firm maintains a hold rating to reflect headwinds in the industrial and automotive sectors, highlighting how they may offset gains in the IT Datacom segment. Analyst Wamsi Mohan highlights Amphenol’s strong positioning in the AI market and is investing heavily to support future growth. Therefore, he is confident in future AI orders. Moreover, since there are risks of technological displacements and integrating recent acquisitions, Moghan suggests a hold on the stock.

6. SES AI Corporation (NYSE:SES)

Number of Hedge Fund Holders: 14

SES AI Corporation (NYSE:SES) is a battery company that produces AI-enhanced high-performance Li-Metal and Li-ion batteries. On January 23, the company announced that it had won contracts with two existing major automotive OEM partners totaling up to $10 million. The contracts will allow applying artificial intelligence to develop new electrolyte materials for Li-Metal and Li-ion batteries for Electric Vehicles (EVs). New revenue from the contracts is anticipated to be partially recognized in the fourth quarter of 2024, while it is expected that the balance will be recognized through the first half of 2025.

“These new contracts with our automotive OEM partners are applying our AI-discovered electrolytes for Li-Metal B-sample developments and for the first time with mature Li-ion batteries already in commercial use. We believe this new revenue stream and these contracts validate and accelerate the commercial use of AI for Science for battery material discovery in automotive applications. We will work closely with our partners and with others in the space to extend our early leadership in this new opportunity”.

– Founder and CEO Qichao Hu.

5. NXP Semiconductors N.V. (NASDAQ:NXPI)

Number of Hedge Fund Holders: 44

NXP Semiconductors N.V. (NASDAQ:NXPI) is a Dutch semiconductor manufacturing and design company. On January 22, Susquehanna lowered the firm’s price target on NXP Semiconductors to $235 from $250 and kept a “Neutral” rating on the shares. The rating has been issued as part of a Q4 preview for the semiconductor group. According to the firm, there may be potential upside in certain segments such as data centers, PC, and mobile. However, the overall semiconductor market is uncertain and broad-based recovery “seems choppy”. This is because demand for semiconductor products is uncertain and companies are struggling with uneven inventory progress. Looking ahead, the firm said there are high expectations about broad-based businesses into Q1, stating that the stated risks will likely overshadow any modest upside in Q4.

4. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 56

International Business Machines Corporation (NYSE:IBM) is a multinational technology company that offers consulting services and a suite of AI software products. On January 23, JPMorgan Brian Essex raised the firm’s price target on IBM to $233 from $227 and kept a “Hold” rating on the shares. The firm expects strong performance from IBM’s AI and software segments, which will hopefully perform well in the upcoming quarter. This strong momentum, however, may be offset by weakness in the Consulting and Infrastructure divisions. Despite challenges with the company, its stock’s valuation reflects confidence for the growth potential of IBM’s Software business as well as growing demand for its AI platform. Even then, broader strength is needed across its segments for further gains.

3. Marvell Technology, Inc. (NASDAQ:MRVL)

Number of Hedge Fund Holders: 70

Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers. On January 22, KeyBanc analyst John Vinh raised the firm’s price target on Marvell Technology to $135 from $125 and kept an “Overweight” rating on the shares. KeyBanc expects Marvell to report better-than-expected financial results and guidance. This is because the firm anticipates AI demand to remain strong, particularly for AI custom application-specific integrated circuits (ASICs) that are custom-designed chips for specific customers and tasks. The firm also added that channel feedback has revealed the Trainium Ultra win to be another positive for the company. The company has secured a contract with Amazon Web Services Trainium2 Ultra servers for supplying its custom ASICs. The deal is expected to maintain revenue for Marvell until its Maia V2 products kick in, in late 2026. In addition, the firm also pointed out to competitor challenges, such as Mellanox having issues with 1.6T DSP, implying a competitive edge for Marvell.

2. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 158

Apple Inc. (NASDAQ:AAPL) is a technology company that recently launched Apple Intelligence, its intelligence system. One of the biggest analyst calls for Thursday, January 23, has been for Apple Inc. Goldman Sachs reiterated the stock as “Buy” and lowered its price target to $280 per share from $286. The price target downgrade, driven by lower iPhone sales, comes ahead of the company’s December-quarter earnings report next week. The firm anticipates the tech giant to report fiscal Q1 earnings per share of $2.35, in line with consensus, and revenue of $124.2B versus the consensus of $124.8B. According to the firm, even though the competition within the Chinese market is increasing, it is optimistic about accelerating iPhone growth in fiscal 2026. This iPhone growth will largely be driven by the continued rollout of Apple Intelligence with a more robust feature set.

“We anticipate market sentiment to improve midyear, which is a seasonally strong period for the stock, as concerns about Apple Intelligence’s limited impact on iPhone demand and competition in China are replaced by optimism over the new slate of Apple Intelligence features revealed at WWDC 2025, the launch of new Mac, iPad and iPhone SE products in spring 2025, and potential new features for the iPhone 17/18 in fall 2025/26”.

-Michael Ng and his team wrote.

“We are Buy-rated on AAPL as we believe that the market’s focus on slower product revenue growth masks the strength of the Apple ecosystem and associated revenue durability & visibility”.

1. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Investors: 235

Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On January 23, Bank of America reiterated the stock as “Buy” and raised its price target to $710 per share from $660. The firm is bullish on the company, citing its strong cost discipline and artificial intelligence capabilities. The firm said it is important for Meta to demonstrate a return on investment in AI, particularly in the months ahead. The analyst also highlighted how advertising revenue across platforms such as Facebook and Instagram is important for the company’s financial health and share prices. Short-term investors will be closely watching AI-driven revenue growth this year.

“With a stable macro backdrop, a growing AI contribution to ad revenues, ramping messaging revenues, and continued cost discipline (recent headcount cuts), we remain positive on the stock in 2025”.

READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.

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