Artificial intelligence (AI) has been termed humanity’s most significant invention in recent years. Others have argued that AI has the potential to enrich consumers’ lives through new channels for self-expression and creativity. The best part is that this is not wishful thinking; big things are already happening. In fact, some believe the world is on the cusp of an AI technology that can reason and act at the same level as humans.

According to Nathan Myhrvold, former Microsoft CTO and current CEO of Intellectual Ventures, humanity is less than five miracles away from creating AI with human-like cognitive abilities. “We’ll get there eventually… Two years ago, nobody would have predicted how far we’ve come today,” he said.

But before AI can match or even surpass human intelligence, the technology is already showing great promise in various applications. For instance, one of Africa’s wealthiest individuals is tapping the tech to build the continent’s first AI factory. According to a Bloomberg report, Strive Masiyiwa’s company will provide the infrastructure for African businesses, researchers, and startups to “turn their bold ideas into real-world breakthroughs, and now they don’t have to look beyond Africa to get it.”

Across the Indian Ocean to Asia, AI is revolutionizing agriculture in China. Recent reports suggest that the government has initiated the development of an AI platform to support intelligent agricultural machines. Regional authorities have released a policy draft that outlines measures to encourage R&D in AI-based agricultural tools. This includes setting up innovation hubs to provide services like R&D, testing, exhibitions, and access to AI resources. The AI platform will assist companies in data verification, AI model implementation, and enhancing human-machine interaction.

India, too, is keen on leveraging the AI wave. The country is working on an indigenous AI chip that should be ready in three years. This massive undertaking is under the purview of the Ministry of Electronics and Information Technology (MeitY). The objective is to reduce reliance on foreign semiconductor technology and strengthen India’s position in the global AI ecosystem.

Many other countries in North America and Europe have similar projects already underway or at the deliberation stage. The most exciting part of these developments is that the private sector is at the center of the revolution. Most, if not all, of these AI-focused projects may be government initiatives but it is the private sector that is doing the heavy lifting.

To create this list, we reviewed the latest AI-focused news reports, press releases, and stock analysis. We have also mentioned the hedge fund sentiment around each stock, 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).

9. Koninklijke Philips N.V. (NYSE:PHG)

Number of Hedge Fund Holders: 12

Koninklijke Philips N.V. (NYSE:PHG) is a global health technology company that works on meaningful innovation to improve people’s lives. On March 25, the company confirmed it was the leading applicant of medical technology patents at the European Patent Office in 2024, with 1231 applications. The company continues to grow its patent portfolio, hoping to generate long-term value.

The patent filing underscores Koninklijke Philips N.V.’s (NYSE:PHG) commitment to integrating informatics and artificial intelligence to improve workflows, enhance patient care and lower costs. The US Food and Drug Administration cleared some of its AI tools integrated into EPIQ CVx and Affiniti CVx ultrasound systems to enhance cardiovascular imaging. While the AI tools increase automation and productivity, they also strengthen Philips’ position in the cardiovascular ultrasound segment.

“To continue driving greater impact, we have shifted our innovation closer to customers. We want to help healthcare professionals improve patient care and empower people everywhere to take care of their health and well-being,” Roy Jakobs, CEO of Royal Philips, said.

8. CGI Inc. (NYSE:GIB)

Number of Hedge Fund Holders: 16

CGI Inc. (NYSE:GIB) provides information technology (IT) and business process services. Its services include business and strategic IT consulting, systems integration, and software solutions. On March 26, the company moved to enhance its ability to serve clients with a broader range of artificial intelligence capabilities with the acquisition of Momentum Technologies.

Headquartered in Québec City, Momentum Technologies is an IT consulting services company that offers data analytics and business intelligence solutions. It also provides innovative solutions designed to drive digital transformation and operational efficiencies for businesses across various industries.

“This is also a natural evolution of our historically strong collaborations with Momentum Technologies over the years. By blending our expertise, we are enhancing our ability to serve our clients with an even broader range of AI capabilities to provide deeper insights and stronger analytics that enable clients to drive smarter decision-making,” says Jalil El Mejjad, Senior Vice-President, Québec City, CGI.

7. Nokia Oyj (NYSE:NOK)

Number of Hedge Fund Holders: 20

Nokia Oyj (NYSE:NOK) develops and delivers telecommunications equipment, networks, and services. The company has been actively advancing its AI capabilities and integrating them into its networking solutions. On March 25, Nokia Oyj (NYSE:NOK) announced it would showcase its latest optical innovations at the OFC50 conference in San Francisco.

The solutions seek to address the connectivity challenges of the AI era. The company’s existing portfolio addresses the significant increases in data center capacity riding on the back of cloud-based services and AI workloads. The expanded portfolio will help network operators efficiently scale their networks while minimizing power consumption.

Commenting on the event, James Watt, Senior Vice President and General Manager of Optical Networks at Nokia Oyj (NYSE:NOK), said, “The solution to challenges posed by AI and cloud-based connectivity demands starts with scale, but it certainly doesn’t end there. Nokia’s expanded portfolio of optical network solutions and technology capabilities delivers tangible network value that supports our customers’ long-term business success.”

6. Oklo Inc (NYSE:OKLO)

Number of Hedge Fund Holders: 27

Oklo Inc. (NYSE:OKLO) is a leading developer of advanced nuclear reactors. It builds, owns, and operates power plants, benefiting from the growing demand for clean energy to power data centers amid the AI boom. On March 25, research firm Wedbush reiterated an Outperform rating on the stock with a $45 price target.

The bullish rating underscores optimism about the company’s strategic efforts to take advantage of the increasing demand for nuclear energy solutions. The company has set out to be the first to operate a commercial small atomic reactor as the expansion of the data center market presents a significant opportunity amid the AI revolution. Oklo Inc.’s (NYSE:OKLO) carbon-free nuclear power supply is becoming more appealing as data center operators prioritize clean energy solutions in order to achieve sustainability targets.

5. Pegasystems Inc. (NASDAQ:PEGA)

Number of Hedge Fund Holders: 30

Pegasystems Inc. (NASDAQ:PEGA) is an enterprise software company providing AI decision-making and workflow automation platforms. On March 25, the company sought to capitalize on growing government digitization demands with the unveiling of a specialized AI-powered toolkit.

Pega Blueprint for Government Efficiency Toolkit is the AI-powered tool Pegasystems Inc. (NASDAQ:PEGA) plans to use to accelerate digital transformation in government agencies. Powered by Pega GenAI Blueprint, the new tool seeks to address the needs of the nearly 70% of leaders who struggle to get the most out of emerging technologies. Procurement friction may be decreased by the significant technical moat created by the smooth integration with Pega Cloud for the Government.

“Pega Blueprint for Government Efficiency Toolkit merges Pega’s proven AI capabilities with deep industry expertise, empowering public sector agencies to rapidly transform operations while maintaining the security, compliance, and service quality citizens expect,” said Doug Averill, VP global industry market leader, Government, Pega.

4. Cognizant Technology Solutions Corporation (NASDAQ:CTSH)

Number of Hedge Fund Holders: 31

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) offers consulting, technology, and outsourcing services to clients across various industries. The company is heavily involved in AI-driven solutions and focuses on areas like AI agents, foundational AI infrastructure, and industry-specific large language models. On March 25, Cognizant Technology Solutions Corporation (NASDAQ:CTSH) partnered with NVIDIA to enhance its Neuro AI platform.

The partnership paves the way for the integration of advanced AI technologies to accelerate adoption across industries with solutions like enterprise AI agents, industry-specific LLMs, smart manufacturing digital twins, scalable AI infrastructure, and streamlined deployments. This collaboration sets Cognizant Technology Solutions Corp. (NASDAQ:CTSH) as a leader in driving AI transformation across industries.

Commenting on this development, Annadurai Elango, president of Core Technologies and Insights at the company, said, “We continue to see businesses navigating the transition from proofs of concept to larger-scale implementations of enterprise AI. Through our collaboration with NVIDIA, Cognizant will be building and deploying solutions that accelerate this process and scale AI value faster for clients through integration of foundational AI elements, platforms and solutions.”

3. Arrow Electronics, Inc. (NYSE:ARW)

Number of Hedge Fund Holders: 35

Arrow Electronics (NYSE:ARW) is a leading provider of technology products, services, and solutions. It specializes in electronic components and enterprise computing solutions. On March 25, the company confirmed the expansion of its private label-managed professional and implementation services portfolio.

The AI-focused managed services portfolio features solutions for maintaining large language models and AI deployments. Its expansion marks an important milestone in Arrow Electronics (NYSE:ARW) push for growth opportunities in high-growth technology segments, including artificial intelligence, cloud computing and security. Additionally, it positions it to tap into the growing demand for AI implementation services.

“Our services provide them with the agility to explore new strategic areas while maintaining successful business outcomes. This expansion is a significant step in our commitment to help our channel partners boost recurring revenue streams without the burdens typically associated with maintaining an extensive services portfolio,” said Ben Klay, president of Arrow’s North America enterprise computing solutions business.

2. Cloudflare, Inc. (NYSE:NET)

Number of Hedge Fund Holders: 55

Cloudflare, Inc. (NYSE:NET) is a software infrastructure company that provides an integrated cloud-based security solution to secure public cloud, private cloud, on-premises and software-as-a-service applications. Analysts at Bank of America believe the company is well-positioned to benefit from artificial intelligence and network security growth potential.

Consequently, they double-upgraded the stock to a buy from underperform on March 25 and hiked the price target to $160 from $60. The upgrade comes on the heels of analysts touting Cloudflare, Inc.’s (NYSE:NET) differentiated approach to AI and its momentum on network security, especially Secure Access Service Edge. Its AI as a service offering is expected to elicit strong demand from enterprises, consequently positioning the company as a market leader in the segment.

“AIaaS is already resonating with customers; our surveys show AI is the leading product Cloudflare customers are looking to adopt in the next twelve months (NTM), with average AI spending forecast to increase +8% to $100k per customer, or 15% of total customer spending,” BofA analysts led by Madeline Brooks said in a note.

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 107

Alibaba Group Holding Limited (NYSE:BABA) is a Chinese internet giant with interests in many sectors, including ecommerce, cloud computing and AI. On March 24, CNBC reported that the internet giant’s affiliate, Ant Group, is using US and Chinese-made semiconductors to build more efficient artificial intelligence models.

The combination is part of the unit’s push to reduce the time and costs of training AI models. While it has used chips from Alibaba and Huawei to train the AI models, it has also used chips from Advanced Micro Devices and other Chinese companies.

The reports come on the heels of Ant Group’s significant upgrades to its AI solutions for healthcare. Built on DeepSeek’s R1 model, Alibaba Qwen, and Ant’s own BaiLing, the upgraded healthcare AI model can now provide answers on medical topics while improving patient services.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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