On March 19th, the stock market bounced back after the US Federal Reserve kept interest rates unchanged at 4.25% to 4.5%. The Fed also anticipated two rate cuts this year despite elevated inflation. The S&P 500 index was up over 1%, while the Nasdaq Composite jumped by well over 200 points. The rally was led by the magnificent seven stocks after weeks of market declines amid trade wars and disappointing economic data.
Elsewhere, AI continues to transform industries and individual lives, from AI nurses reshaping hospital care to schools reporting that students are learning faster and more effectively with AI.
Furthermore, AngelList CEO Avlok Kohli claimed that all software companies are AI companies now.
“The enthusiasm into AI actually carries over into everything, which effectively impacts all startups,” said Kohli when asked if investors are as excited about emerging startups outside of AI.
Meanwhile, security risks surrounding AI continue to loom. Computer scientist and AI pioneer Fei-Fei Li co-authored a report suggesting that lawmakers should consider AI risks that “have not yet been observed in the world” when devising AI regulations. The report highlighted that the novel risks posed by AI could require legislation that compels AI developers to publicly report their safety tests and security protocols.
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 Q4 2024 database of over 1000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A busy trading room floor with analysts absorbing the day’s financial markets information.
8. Stereotaxis Inc. (NYSEAMERICAN:STXS)
Number of Hedge Fund Followers: 11
Stereotaxis Inc. (NYSEAMERICAN:STXS) engages in discovering, designing, and delivering innovative surgical robotic systems, instruments, and information systems for minimally invasive endovascular surgeries. Its robotic systems help physicians operate with precision and safety, boosting productivity and connectivity in the operating room. The company is focusing on enhancing its robotic systems and the operating room environments using AI, automation, and data integration.
On March 19th, Stereotaxis (NYSEAMERICAN:STXS) announced that Nvidia Corp. (NASDAQ:NVDA) accepted the company into the Nvidia Connect program. The program assists members with Nvidia’s software development resources and frameworks.
“We greatly appreciate the support of NVIDIA in our efforts to pioneer endovascular robotics and take the technology to new incredible heights. The combination of robotics’ mechanistic benefits – precision, safety, stability – with the promise of AI innovations will dramatically transform what is possible in treating patients. We are excited for the path ahead of us.”
-said David Fischel, CEO of Stereotaxis Inc.
7. FinVolution Group (NYSE:FINV)
Number of Hedge Fund Followers: 13
FinVolution Group (NYSE:FINV) is a fintech company that focuses on transforming online consumer finance by using AI-powered credit technology to connect borrowers and financial institutions.
On March 18th, FinVolution Group (NYSE:FINV) announced a 4.1% year-over-year increase in 2024 revenue to $1.8 billion as transaction volumes surged 6.1% to $28.2 billion. The company posted a net profit of USD 327.1 million as it prioritizes global expansion, strategic partnerships, and refinement of its AI technologies that leverage LLMs to optimize the credit lifecycle, including customer acquisition, risk control, user engagement, and customer service.
“Over the past year, FinVolution achieved solid growth and demonstrated healthy financial performance. In 2024, we allocated US$160.4 million to shareholder returns, accounting for approximately 49.1% of our annual net profit. Since 2018, we have returned a total of approximately $765 million to our shareholders. This underscores our steadfast commitment to enhancing shareholder value and our strong confidence in the company’s business fundamentals and cash flow outlook.”
-said Jiayuan Xu, CFO of FinVolution Group.
6. Lightspeed Commerce Inc. (NYSE:LSPD)
Number of Hedge Fund Followers: 18
Lightspeed Commerce Inc. (NYSE:LSPD) offers a cloud-based commerce platform for merchants to scale and provide customer experiences for clients in the retail and hospitality sectors as well as golf businesses worldwide.
On March 19th, Lightspeed Commerce Inc. (NYSE:LSPD) announced a new AI-based website-building tool to help retail merchants create web pages for online stores from a screen capture. This technology would eliminate the requirement for manual coding and third-party developers and help them save time and money. The AI website builder is currently available in beta version with select Lightspeed merchants.
“Designing a website in-house can be time-consuming, frustrating, and complex for many merchants. Without design expertise or coding skills, they can often spend significant time experimenting with layouts, adjusting branding elements, and troubleshooting issues to get their store looking just right. Our goal is to remove the friction from website design and give merchants the power to iterate at the speed of commerce. This AI-driven technology is a leap forward in ecommerce efficiency, which can help businesses of all sizes create compelling digital experiences effortlessly.”
-said Dax Dasilva, Founder and CEO at Lightspeed.
5. TD Synnex Corp. (NYSE:SNX)
Number of Hedge Fund Followers: 33
TD Synnex Corp. (NYSE:SNX) is a leading global technology distributor and a solutions aggregator for the IT ecosystem. The company has been increasingly offering AI services and resources to partners via its growing “Destination AI” program.
On March 18th, TD Synnex Corp.’s (NYSE:SNX) subsidiary, Hyve Solutions Corp, a top provider of hyperscale digital infrastructures, announced it would showcase its latest AI infrastructure portfolio at the GTC 2025 between March 17th and 21st. The company’s end-to-end AI lifecycle solutions around AI design and manufacturing, scalable architecture for enhanced GPU communications, advanced testing, and next-gen AI-optimized, build-to-order racks for high-performance computing are designed to support AI deployments across data center, hybrid cloud and edge environments.
“Hyve Solutions is committed to advancing AI infrastructure for hyperscalers, cloud service providers, and high-performance computing segments. Our solutions are designed to support the scalability and efficiency required for next-generation AI deployments, backed by our strategic collaboration with NVIDIA and our robust global manufacturing and deployment capabilities.”
-said Steve Ichinaga, President of Hyve Solutions.
4. Alarm.com Holdings (NASDAQ:ALRM)
Number of Hedge Fund Followers: 36
Alarm.com Holdings (NASDAQ:ALRM) offers security, video monitoring, and access control solutions via its cloud-based platform to residential customers, small businesses, and enterprises. The company’s intelligent automation and wellness solutions enable customers to manager and control their property completely remotely.
On March 19th, Alarm.com Holdings (NASDAQ:ALRM) announced it will showcase its AI-based crime prevention solutions like AI Deterrence (AID), remote video monitoring capabilities, and upcoming integrated fire safety technologies at the ISC West 2025.
“Previously, pursuing a market like remote video monitoring would have required an expensive multi-app, multi-vendor set up. Alarm.com’s ever-growing suite of integrated crime prevention and property protection solutions enable service providers to offer differentiated new services to customers on the platform they’re already installing at scale. This also results in more convenience and control for home and business owners who can manage their systems on one app.”
-said Dan Kerzner, President of Platforms Business at Alarm.com Holdings.
3. Quest Diagnostics Inc. (NYSE:DGX)
Number of Hedge Fund Followers: 40
Quest Diagnostics Inc. (NYSE:DGX) leverages technology and innovation to offer diagnostic testing and information services. It uses large repositories of de-identifiable clinical lab results to help physicians gain accurate insights into diseases for better treatment and patient outcomes. The company has ramped up the deployment of AI in several areas of its organization, including microbiology and cytology testing, specimen processing, and customer service.
On March 18th, Quest Diagnostics (NYSE:DGX) announced a partnership with Google Cloud to optimize data management, enhance data analytics, improve patient engagement, and personalize experiences for providers. The company will utilize Google Cloud’s GenAI and data analytics technologies across segments, including R&D, operations, administrative workflows, and customer experience, while ensuring data privacy.
“We are excited about the potential to innovate and personalize the services we bring to our patients, clients, and employees. Google Cloud provides a best-in-class platform for securely streamlining and integrating data to generate novel insights and improve productivity. Google Cloud’s generative AI capabilities can help dismantle care roadblocks by personalizing the way patients and providers interact with us, improving care access, customer experiences, and quality.”
-said Murali Balakumar, SVP and chief information and digital officer at Quest Diagnostics Inc.
2. Synopsis Inc. (NASDAQ:SNPS)
Number of Hedge Fund Followers: 72
Synopsys Inc. (NASDAQ:SNPS) develops software and tools to help engineers in the semiconductor manufacturing industry design and verify semiconductors. The electronic design automation company also focuses on silicon intellectual property and software security.
On March 19th, Synopsys Inc. (NASDAQ:SNPS) announced the AgentEngineer technology focusing on AI agents that can execute specific tasks in chip design, like testing circuitry. In time, the company expects the technology to assist in the development of complicated systems with different chips and components to accelerate delivery times.
“AI plays a huge role, because your R&D capacity is not growing. You’ve got a certain team, you’re not going to just double it, triple it, quadruple it. So you have to increase this R&D capacity.”
– said Shankar Krishnamoorthy, head of the technology and development group at Synopsys Inc.
1. Vertiv Holdings Co. (NYSE:VRT)
Number of Hedge Fund Followers: 92
Vertiv Holdings Co. (NYSE:VRT) designs and develops hardware, software, and analytics solutions related to power management, thermal systems, and lifecycle services for data centers, communication networks, and industrial environments. The company’s AI-ready power, cooling, and IT infrastructure offerings are designed to run AI workloads even during outages regardless of the cluster size, minimizing dependency on utility providers.
On March 18th, Verti Holdings Co. (NYSE:VRT) announced the launch of Vertiv Unify software, Vertiv SmartRun, Vertiv CoolLoop RDHx, and the Vertiv PowerDirect Rack software related to infrastructure and thermal management, prefabricated modular deployment, and DC power distribution. These software are expected to match the increasing power and heat density and operational demand of AI.
“With these additions to our portfolio, Vertiv provides easier end-to-end systems integration, faster deployment, improved scalability, and greater power and cooling density to address critical digital infrastructure challenges related to accelerated computing. Our comprehensive range of advanced power, cooling, management, and deployment solutions positions Vertiv to uniquely support customers as they build and scale AI-driven data centers.”
-said Scott Armul, executive vice president for global portfolio and business units at Vertiv Holdings Co.
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 time frame. 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
Hedge Fund Resource Center