Despite AI’s potential to transform our lives for the better, security threats associated with the technology continue to make headlines. North Korea’s Kim Jong Un oversaw tests of newly developed AI-powered suicide drones and called for increased production. Kim Jong Un had reportedly said that unmanned control and AI capability should be prioritized in modern arms development.
Elsewhere, Alabama Governor Kay Ivey banned Chinese AI tools over data security concerns.
“When it comes to the threat posed by the Chinese government, Alabama takes no chances. Our citizens’ information must be protected in the strongest possible ways, which is why we are not only putting a ban on these two Chinese AI companies within our state government but also safeguarding our state’s IT infrastructure from any foreign country of concern,” she said.
Bill Gates also recently reiterated concerns about AI replacing most jobs. He believes the rate of advancements in AI could mean that the technology could replace many professions, including doctors and teachers.
“It’s very profound and even a little bit scary — because it’s happening very quickly, and there is no upper bound,” Gates said in a recent interview. However, he noted that certain types of jobs will likely never be replaced by AI. He said last year that he remains optimistic about the overall benefits of AI, like “breakthrough treatments for deadly diseases, innovative solutions for climate change, and high-quality education for everyone.”
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of the number of hedge funds that hold stakes in them, as of Q4 2024.
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 business intelligence analyst at a desk, surrounded by charts and diagrams representing the company’s data points.
9. Lantronix Inc. (NASDAQ:LTRX)
Number of Hedge Fund Holders: 17
Lantronix Inc. (NASDAQ:LTRX) offers computing and connectivity IoT solutions, focusing on high-growth markets, including smart cities, enterprises, and transportation. The company’s offerings include intelligent substation infrastructure, video surveillance, and Out-of-Band Management (OOB) for edge computing, which help clients advance their progress in the growing IoT markets.
On March 27th, Lantronix Inc. (NASDAQ:LTRX) announced the launch of its new Open-Q 8550CS system-on-module (SOM) powered by the Qualcomm Dragonwing QCS8550 processor. This SOM provides low-power, on-device AI and ML capabilities to help developers swiftly introduce edge products that involve applications like video collaboration/transcoding and integration with Edge AI gateways to markets. The company said it is an ideal platform for developing industrial edge AI products, including drones, controllers, robotics and industrial handheld devices for diverse industries like smart warehousing, manufacturing, transportation, logistics and retail.
“With the support of Qualcomm Technologies, Lantronix is driving seamless AI innovation at the Edge, empowering developers to harness embedded computing and IoT for cutting-edge, industrial-grade solutions. Together, we’re transforming the impossible into reality.”
-said Mathi Gurusamy, chief strategy officer at Lantronix.
8. Relay Therapeutics Inc (NASDAQ:RLAY)
Number of Hedge Fund Holders: 37
Relay Therapeutics Inc. (NASDAQ:RLAY) is a clinical-stage precision medicine firm focused on cancer treatments. The company leverages AI and ML for drug discovery, combining compute with experimental data to offer insights into protein motion and function and identify drug candidates that can potentially be transformed into novel therapies.
On March 27th, Barclays said it deems the latest pullback in Relay Therapeutics Inc. (NASDAQ:RLAY) shares as a buying opportunity. The brokerage said the biotech firm stands out in its coverage as having the “greatest upside and exposure to AI-driven drug discovery.” Analysts like the risk/reward for the stock with a cash runway till H2 2025 and a “derisked catalyst path.” The brokerage reiterated its “Overweight” rating on the stock and maintained a 12-month stock price target of $17 per share.
7. Riot Platforms Inc. (NASDAQ:RIOT)
Number of Hedge Fund Holders: 38
Riot Platforms Inc. (NASDAQ:RIOT) is a Bitcoin mining and digital infrastructure firm that manages Bitcoin mining data centers and electrical switchgear fabrication operations across the US.
On March 21st, Roth MKM highlighted that although Bitcoin mining remains Riot Platforms Inc.’s (NASDAQ:RIOT) core revenue driver, the company sees major upside in high-performance computing on the surging demand for AI training and inference. The brokerage highlighted that the company is actively expanding into the HPC segment to capitalize on higher-value opportunities beyond crypto mining operations. Analysts added that Riot Platforms Inc. (NASDAQ:RIOT) views Corsicana as a strategic site for a 600MW HPC build, expected to be operational in multiple phases in 2026 and beyond. Roth MKM maintained a “Buy” rating on the stock with a 12-month target price of $20 per share.
6. Zeta Global Holdings Corp. (NYSE:ZETA)
Number of Hedge Fund Holders: 39
Zeta Global (NYSE:ZETA) offers AI marketing cloud services through the Zeta Marketing Platform, which leverages advanced AI and countless consumer signals to help marketers acquire, grow, and retain customers efficiently.
On March 27th, Zeta Global (NYSE:ZETA) announced the launch of AI Agent Studio, a suite of GenAI tools for users to choose and activate prebuilt agents, create personalized agents, and combine them to carry out complex marketing tasks. The company said Agentic Workflows, available in beta, is a milestone innovation that allows marketers to manage the company’s interconnected GenAI agents and automate tasks efficiently and accurately. It added that the tools can automate tasks like media planning, bidding strategies, creative brief generation, bill processes, and audience segmentation, among others.
“Zeta has long been at the forefront of AI-powered marketing, relentlessly focused on making AI truly actionable. The momentum is clear—126 brands adopted Zeta’s Data Cloud AI within its first year of launch. While AI adoption is still in its early stages, we’re already seeing a meaningful impact, with Zeta’s consumption revenue increasing over 40% in 2024—a significant acceleration from 2023. With this launch, which combines strategic intelligence with autonomous execution, Zeta is giving businesses the ability to move faster, make smarter decisions, and scale growth like never before.”
-said David A. Steinberg, CEO of Zeta Global Holdings Corp.
5. GE HealthCare Technologies Inc. (NASDAQ:GEHC)
Number of Hedge Fund Holders: 64
GE HealthCare Technologies Inc. (NASDAQ:GEHC) is a provider of healthcare solutions, new-age medical technology, cloud-first AI-enabled solutions, and data analytics services worldwide.
On March 27th, GE HealthCare Technologies Inc. (NASDAQ:GEHC) announced the launch of the FDA-approved Flyrcado imaging agent for the detection of suspected coronary artery disease at the 2025 American College of Cardiology Annual Scientific Session & Expo, scheduled between March 29th and 31st in Chicago. The company said it would also showcase its new AI-powered innovation, including the CardIQ Suite, designed to improve efficiency and data integration across the cardiology care pathway.
“The future of healthcare lies in the integration of advanced technologies with human expertise, allowing for a more holistic, data-driven and efficient cardiology care pathway. Cardiovascular diseases are the leading cause of death globally, so it is critical that we continue our commitment to innovations in this space – our newest solutions showcased at ACC will help transform and optimize the diagnostic workflow.”
-said Eigil Samset, general manager of Cardiology Solutions at GE HealthCare Technologies.
4. Corning Inc. (NYSE:GLW)
Number of Hedge Fund Holders: 73
Corning Inc. (NYSE:GLW) is an innovator in materials science. It applies its expertise in glass science, ceramic science, and optical physics, combined with engineering capabilities, to design diverse products for industries such as optical communications, mobile consumer electronics, automotive, solar, semiconductors, and life sciences.
On March 27th, Corning Inc. (NYSE:GLW) announced the launch of Corning GlassWorks AI solutions, which it defines as a “one-stop shop” of personalized data center products around cable and connectivity solutions to help operators manufacture the dense fiber infrastructure required for GenAI. GlassWorks AI is designed to address the scalability and density-related challenges of data center operators as AI infrastructure requirements continue to surge. The company will showcase its latest innovation at the 2025 Optical Fiber Communication Conference and Exposition (OFC) between April 1st and 3rd.
“With GlassWorks AI, Corning is drawing on its world-leading expertise in materials science to create breakthrough products that expand the possibilities of generative AI for our customers, both inside and outside the data center. Our new Contour Flow cable is a great example of our innovations – helping data centers connect their city-to-city networks quickly and cost effectively, delivering future-ready optical performance without the need for expensive infrastructure buildouts.”
-said Sean Kelly, vice president and business director of Corning’s Data Center Business Division.
3. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 84
Cisco Systems Inc. (NASDAQ:CSCO) is a technology firm that designs, builds, and markets networking software and hardware, as well as telecommunications equipment for global clients.
On March 26th, Melius Research Ben Reitzes highlighted three reasons for favouring the stock. He highlighted recent deals with Nvidia Corp. (NASDAQ:NVDA), which gives Cisco Systems Inc. (NASDAQ:CSCO) “a shot to be on the right side of AI in the enterprise.” The analyst added that a major campus switch refresh in H2 2025 “should bode well for a pickup in networking orders.” He noted that the company’s security strategy is “finally taking hold,” which the firm believes would help the multiple. “In short, Cisco is attractively priced and could be in the early innings of rerating,” the analyst wrote in a note to investors. The brokerage maintained a “Buy” rating on the stock with a 12-month stock price target of $79 per share.
2. Workday Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 89
Workday Inc. (NASDAQ:WDAY) offers an AI platform to help organizations manage finances and human resources more efficiently for higher work productivity and better business outcomes.
On March 27th, Workday Inc. (NASDAQ:WDAY) announced that Evisort’s AI-driven contract intelligence and contract lifecycle management offerings are now available on its AI-powered platform. The integration will help clients with actionable insights from legal and business documents to take well-informed and faster actions across vast amounts of HR and financial data while minimizing risks. In short, the applications will help organizations easily identify risks, opportunities, and obligations in unstructured data.
“Contracts are the lifeblood of organizations, dictating revenue opportunities and obligations between parties; however, these terms are often buried in unstructured language and over-looked. With Workday Contract Intelligence and Workday CLM powered by AI, we’re helping customers finally unlock that value at scale, bringing more speed and certainty to every business decision.”
-said Andrew Kershaw, group general manager, office of the CFO, Workday Inc.
1. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 107
Alibaba Group Holding Limited’s (NYSE:BABA) offerings include technology infrastructure, e-commerce platforms, cloud services, and digital media solutions for businesses and consumers globally. The company has also made significant investments in AI development.
On March 26th, Alibaba Cloud announced it had launched Qwen2.5-Omni-7B, an end-to-end multimodal model in the Qwen series. The company said the new model is designed for comprehensive multimodal perceptions, capable of analyzing various inputs like text, images, audio, and videos to produce real-time text and natural speech responses. Alibaba is confident that the milestone sets a new standard for optimal deployable multimodal AI for edge devices like smartphones and laptops. It added that the high performance and robust multimodal capabilities make the new model a suitable foundation for developing agile and affordable AI agents.
While we acknowledge the potential of Alibaba Group Holding Limited (NYSE:BABA) 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 BABA 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.
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