2. Arm Holdings
Hedge Fund Interest
- Few hedge funds are investing in Arm Holdings (ARM -1.87%). Only 7% of them hold stock in this company, and it's in the top 10 holdings of five hedge funds.
- As AI has become more popular, Arm has developed AI-enabled chip designs.
- Arm licenses out its chip designs and receives royalties from companies that use them.
Key Metrics
- Net Change in Holdings: -1,375,109
- Percent of Hedge Funds Holding: 7.10%
- Appearances in Top 10 Holdings: 5
- QoQ Market Cap Change: -1.31%
- Put/Call Ratio: 1.34
3. IonQ
Hedge Fund Interest
- Quantum computing company IonQ (IONQ -10.16%) is the least popular AI stock, with less than 3% of hedge funds holding it. It's a top 10 holding of only two hedge funds.
- IonQ is exploring quantum AI, the use of quantum computing to build more powerful AI models. The timeline for a breakthrough and monetizable application is unclear.
- It's collaborating with many leading AI companies, including Nvidia, Amazon, Microsoft, and Dell (DELL +21.68%).
Key Metrics
- Net Change in Holdings: -1,478,884
- Percent of Hedge Funds Holding: 2.67%
- Appearances in Top 10 Holdings: 2
- QoQ Market Cap Change: 36.02%
- Put/Call Ratio: 1.85
4. ASML Holding
Hedge Fund Interest
- ASML Holding (ASML -1.18%) hasn't caught on as much as other AI stocks, being part of only 15% of hedge funds' portfolios.
- This manufacturing company supplies the semiconductor industry, providing chipmakers, including those who make chips for AI, with equipment.
Key Metrics
- Net Change in Holdings: -3,214,819
- Percent of Hedge Funds Holding: 15.11%
- Appearances in Top 10 Holdings: 14
- QoQ Market Cap Change: -23.35%
- Put/Call Ratio: 1.73
5. Mobileye Global
Hedge Fund Interest
- Mobileye Global (MBLY -3.03%) hasn't caught on as much as other AI stocks, being part of only 4% of hedge funds' portfolios. Funds that do own the stock are shedding shares.
- The autonomous driving company faces stiffening competition from Chinese firms.
- It aims to leverage AI in its Advanced Driver Assistance Systems (ADAS) and autonomous vehicle projects.
Key Metrics
- Net Change in Holdings: -4,383,512
- Percent of Hedge Funds Holding: 3.90%
- Appearances in Top 10 Holdings: 2
- QoQ Market Cap Change: -59%
- Put/Call Ratio: 0.63
What Can Individual Investors Learn From How Hedge Funds Are Investing in AI Companies?
Hedge fund interest in AI companies demonstrates the value that this technology has. Since it's a relatively new technology that's changing rapidly, investors can still get in early. That's one of the reasons hedge funds have been pouring money into AI stocks. The growth potential for emerging opportunities like this one is much higher than that of established products and services.
A range of companies are involved with AI, and hedge funds are investing in a diverse mix of them, from online retailers like Amazon to car companies like Tesla (TSLA -2.12%). Investors could benefit by following the same approach and adding different types of AI stocks to their portfolios.
The AI companies that are most popular with hedge funds are integrating new AI tools into their business models, core products, and technologies. Microsoft, Amazon, and Google have all incorporated AI throughout their businesses, and AI is at the center of Nvidia’s products. Investors who want to capitalize on the growth of AI should consider tech companies that have made it a key part of their overall strategy.
On the other hand, hedge funds are less bullish about companies with strong but niche capabilities that they’re using AI to boost, like cybersecurity, chip design, and quantum computing.
Those preferences may shift in the coming quarters with the realization that industry-standard LLMs can be integrated more cheaply and efficiently. That revelation, fuelled by DeepSeek’s release of R1, suggests that hyperscalers may be less dependent on proprietary AI models and hardware. DeepSeek’s success could point to more opportunities to be found in companies leveraging AI for specific, high-value applications at lower cost than previously thought.
Hedge fund interest is a useful metric to see where professionals are investing their clients' money. While investors shouldn't base their decisions entirely on what hedge funds are doing, hedge fund holdings can provide ideas of companies to research.
