According to a spokesperson for China’s parliament, DeepSeek’s progress is a reflection of the rise of Chinese companies in artificial intelligence (AI). Lou Qinjian, responding to a question on China’s progress in AI, has deemed DeepSeek’s achievement as “commendable”, Reuters reported.
“DeepSeek adheres to an open-source approach and promotes the widespread application of AI technology globally which contributes Chinese wisdom to the world. Through the rise of companies like DeepSeek, we can see the innovation and inclusiveness of China’s technological development.”
– Lou Qinjian.
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Indeed, DeepSeek has sparked a state of unrest in the tech world ever since its arrival. Using distillation to achieve cheaper and more efficient AI models, this AI startup has ignited a fierce race in the artificial intelligence world ever since the birth of ChatGPT.
Such has been the intensity of competition that in recent news, it has come to light how Tencent Holdings has displaced DeepSeek as the most downloaded free app in China’s iOS App Store. Tencent’s Yuanbao has taken the top spot in the free app list on Monday, with DeepSeek in second place and ByteDance’s Doubao in fourth, the South China Morning Post noted.
Launched in May last year, Yuanbao gained popularity after Tencent’s move to integrate DeepSeek’s R1 reasoning model in February, providing users with an alternative to the tech giants’ Hunyuan model.
Developments like these illustrate how intense the global race in artificial intelligence is becoming. In this regard, China’s ambassador to the United States Xie Feng has even called for closer cooperation on artificial intelligence. According to him, the technology risks are “opening a Pandora’s box”.
“As the new round of scientific and technological revolution and industrial transformation is unfolding, what we need is not a technological blockade, [but] ‘deep seeking’ for human progress.”
-Xie said, making a pun on China’s star AI start-up DeepSeek.
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. The hedge fund data is 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).
Photo by Roberto Júnior on Unsplash
10. Tempus AI, Inc. (NASDAQ:TEM)
Number of Hedge Fund Holders: 17
Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology company that provides AI-enabled precision medicine solutions. On March 3rd, JPMorgan downgraded the stock to “Neutral” from overweight and raised the price target to $55 from $50.
The rating, issued after the earnings print, discussed how Tempus AI’s 2025 guidance demonstrates “sustainable” data and service revenue, “encouraging” average selling price traction, and boosting profitability. The firm is all in on its “unique combination” of diagnostics and data but stated that the shares are fully valued on a relative basis after the recent stock run.
“The recent artificial intelligence headlines and Nancy Pelosi call option buying have driven increased retail interest.”
9. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 42
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers. On February 28, TD Cowen maintained a “Hold” rating on the stock with a $20.00 price target. According to the firm, Bloom Energy is poised to benefit from the increasing focus on power demand driven by data centers.
The analysts have also highlighted certain concerns, such as a flat product backlog, status of safe harbor provisions, and the company’s Accounts Payable (AEP) status, drawing attention from investors. The firm concluded stating that it is becoming favorable toward Bloom’s story but chooses to remain on the sidelines until it gains more confidence about the company’s position within the data center market and execution of safe harbor activities.
8. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 64
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On March 4, the company announced that it has successfully deployed its specialized technological solutions within Societe Generale, a top tier European bank, for its international retail banking activities.
The bank has integrated Palantir’s state-of-the-art Anti Financial Crime solutions, built on the Palantir foundry, to leverage solutions such as advanced analytics, machine learning algorithms, and comprehensive risk assessment tools.
These solutions will help it in detecting, preventing, and mitigating financial crime’s risks such as fraud or money laundering. To conclude, this collaboration integrates Societe Generale’s industry expertise with Palantir’s technology to facilitate financial crime prevention across the bank’s retail networks.
“With financial crime becoming ever more sophisticated, advanced data analytics and integration have become ever more crucial to effectively combating it. We are proud to be part of this critical challenge for one of Europe’s most important financial institutions.”
-François Bohuon, General Manager of Palantir France & EMEA Executive.
7. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 70
MongoDB, Inc. (NASDAQ:MDB) provides a general-purpose database platform worldwide that integrates operational, unstructured, and AI-related data to streamline building applications. On March 3rd, Loop Capital analyst Yun Kim lowered the firm’s price target on the stock to $350 from $400 and kept a “Buy” rating on the shares.
The rating, issued ahead of the earnings print, reflects the firm’s anticipation that cloud consumption trend will continue in MongoDB’s cloud Atlas business, leading to a modest upside for this highly strategic business.
However, the firm acknowledges that there isn’t a sizable acceleration in the overall cloud consumption pattern, which aligns with cloud infrastructure software vendors’ results so far in the current earnings season. It also noted that expectations for new workloads from Generation Artificial Intelligence (GenAI) applications and agents are likely to rise in the second half of the year and become more substantial in calendar year 2026.
6. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 95
AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology. On March 3rd, Benchmark analyst Mark Zgutowicz added AppLovin (APP) to the “EDM Top Ideas List,” keeping a “Buy” rating with a $525 price target.
According to the firm, the company’s AI-enhanced targeting in the gaming segment should drive persistent top-line growth as it leverages AppLovin’s technological capabilities to meet specific market demands. Revenue sources can be further diversified by enhancing e-commerce advertising offerings, while the buyback program “provides an additional layer of support that may elevate earnings per share over the medium term.”
5. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 105
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors. On March 3, Evercore ISI analyst Mark Lipacis reiterated a “Buy” rating on the stock and set a price target of $135.00. According to the firm, Marvell has strong prospects in artificial intelligence (AI) networking, and a potential sales growth is anticipated in the coming quarters.
The investment community may be focused on Marvell’s application-specific integrated circuits (ASICs), but its AI networking products, including 400/800G PAM4 digital signal processors (DSPs), are likely to contribute to revenue growth. The firm also forecasts an expansion in Marvell’s total addressable market (TAM) for AI networking on the back of growing demand for long-distance connectivity solutions and AI-related products such as PCIe retimers.
4. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce Inc (NYSE:CRM) is a cloud-based CRM company that has gained popularity after the launch of its AI-powered platform called Agentforce. On March 3rd, DBS analyst Andy Yu CFA maintained a “Buy” rating on the stock with an associated price target of $422.00. Salesforce’s financial performance and strategic initiatives have primarily driven the buy rating.
In particular, the firm noted how its revenue and non-GAAP EPS have surpassed market expectations on the back of Salesforce’s robust subscription model. Moreover, AI tools such as Agentforce and strategic initiatives such as development of its Customer 360 platform position it strategically in the sales and marketing landscape. The company is expected to maintain its leadership in the market, and even though it is facing some global economic uncertainties and competitive pressures, its growth prospects and market position remain robust.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. On March 3rd, Reuters reported that the servers used in a fraud case which was reported last week, supplied by US firms, may have contained Nvidia’s advanced chips. Last week, three men, including a Chinese national, were charged with fraud in Singapore, linking the case to the transfer of Nvidia’s AI chips from Singapore to Chinese AI firm DeepSeek.
“We assessed that the servers may contain Nvidia chips…”Whether Malaysia was the final destination … we do not know for certain at this point.”
-Singapore’s Home Affairs and Law Minister K Shanmugam told reporters on Monday.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On March 3rd, Kyndryl, a global IT Services company, announced that it has entered into a partnership with Microsoft to support the adoption and deployment of a new AI-powered healthcare assistant.
The new Microsoft Dragon Copilot solution leverages generative AI-powered ambient listening voice recognition to automate clinical documentation, enhance administrative efficiency and allow clinicians to focus on patient care. Kyndryl will begin offering Dragon Copilot in its healthcare services portfolio beginning in May 2025.
“With their vast experience in healthcare IT services, Kyndryl has been selected as a launch partner for Dragon Copilot. Kyndryl understands patient care and supports large and small healthcare providers and payers globally. Kyndryl’s services capability combined with Microsoft’s AI-enabled solutions will deliver innovative solutions that improve patient and member experiences while optimizing healthcare operations”
-Patty Carrolo, CVP Microsoft US Health and Life Sciences.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. On March 3rd, the company announced that patients at NYU Langone Health facilities will be able to confirm their identity at check-in using Amazon One, a contactless service that uses a palm scan to securely and quickly authenticate identity, starting next week.
This will be the largest Amazon One third-party deployment to date as well as the first Amazon One deployment in a health care setting. Amazon One’s palm scanning technology employs advanced artificial intelligence and machine learning to create a unique palm signature for identity and authentication. It has a 99.9999% accuracy rate and recognition time of less than one second. According to NYU Langone, the technology will help to accelerate sign-ins, relieve administrative strain on staff, and reduce errors and wait times.
“Health care is deeply personal and often stressful. With Amazon One, we’ve created a palm recognition system that respects privacy while making check-ins simpler when patients have more important things on their minds. It’s meaningful to see our technology make a real difference in people’s daily lives and provide a more frictionless health care journey without ever compromising on security or patient trust.”
-Colleen Aubrey, SVP of AWS Solutions.
While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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