10 Ai Stocks In Focus Amid U.s.–china Tariff Pause

Global technology and chip stocks surged on Monday following the news of a tariff pause between the US and China. The two countries have agreed to pause the majority of tariffs on each other’s goods for an initial 90-day period.

This surprising breakthrough comes after a weekend of trade negotiations in Geneva, Switzerland. The negotiations were conducted by officials from the two countries. In a joint statement, both sides recognized “the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship.”

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Previously, trade tensions between two of the world’s largest economies resulted in disrupted supply chains and businesses. Investors were very concerned about the impact on major tech stocks, particularly those with exposure to China. However, they are now breathing a sigh of relief after talks between the US and China led to a temporary pause on “reciprocal tariffs”.

Daniel Ives, global head of technology research at Wedbush Securities, said that the agreement to suspend most tariffs on each other’s goods was a “best-case scenario.”

“This is clearly just the start of a broader and more comprehensive negotiations, and we would expect both these tariff numbers to move down markedly over the coming months as deal talks progress.”

He further said new highs for the market and tech stocks are now on the table.

“With US/China clearly on an accelerated path for a broader deal we believe new highs for the market and tech stocks are now on the table in 2025 as investors will likely focus on the next steps in these trade discussions which will happen over the coming months. This morning is a huge win for the bulls and a best case scenario post this weekend in our view.”

The tariff revisions that have been agreed on will be imposed by May 14. Trump’s 20% fentanyl-related levies on China will stay, but each side has agreed to lower “reciprocal” tariffs on the other by 115 percentage points for 90 days.

According to the joint statement, this means that the US will temporarily lower its overall tariffs on Chinese goods from 145% to 30%. Meanwhile, China will cut its levies on American imports from 125% to 10%.

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).

10. SoundHound AI, Inc. (NASDAQ:SOUN)

Number of Hedge Fund Holders: 11

SoundHound AI, Inc. (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses. The stock has surged 18% on Monday following news of the tariff pause and a rating update from HC Wainwright.

Analyst Scott Buck reiterated a “Buy” rating on the stock and set a price target of $18.00. The firm’s rating reflects SoundHound AI’s potential for growth amid macroeconomic challenges. Even though the company slightly missed its revenue estimates for the first quarter of 2025, its revenue guidance reaffirmation should alleviate investor concerns, the analysts noted.

SoundHound AI holds the potential to generate efficiencies and cost savings for businesses, positioning it well to capitalize on new business opportunities. The company’s restaurant business has also shown considerable success, now spanning over 13,000 locations and generating a major chunk of annual recurring revenue. Overall, the firm is optimistic about the company’s potential to grow organically.

9. Astera Labs, Inc. (NASDAQ:ALAB)

Number of Hedge Fund Holders: 39

Astera Labs, Inc. (NASDAQ:ALAB) is engaged in the design, manufacture, and sale of semiconductor-based connectivity solutions for cloud and AI infrastructure. On May 12, Morgan Stanley upgraded the stock to “Overweight” from Equal Weight and set a price target of $99.00. The rating update has been issued based on anticipated growth in AI spending and new product launches. The firm said shares of the AI semiconductor company are compelling.

“We have maintained optimism on Astera’s prospects since the IPO, but have been somewhat valuation sensitive at the higher end of the range. We think this is a good entry point as AI enthusiasm comes back to the group and ALAB posts strong numbers.”