We recently compiled a list of the 18 AI News and Ratings Making Waves on Wall Street. In this article, we are going to take a look at where Amgen Inc. (NASDAQ:AMGN) stands against the other AI stocks.

In a recent discussion at CNBC's 'Squawk on the Street', NYU professor and AI expert, Gary Marcus shared his perspective on the limitations of current AI models, the hurdles in enterprise adoption, and the financial sustainability of major AI companies. His insights raise important questions about the future of AI and whether it can truly deliver on its ambitious promises.

AI’s Future Faces Hurdles in Reliability, Costs, and Enterprise Use

Gary Marcus challenged the idea that AI will significantly boost GDP growth in the near future, as suggested by Microsoft CEO Satya Nadella. While Nadella sees AI driving efficiency and benefiting multiple platforms, Marcus argued that the current technology remains unreliable, with persistent hallucinations and logical errors that have yet to be resolved. Despite advancements like Grok 3, which underwent extensive training and required large-scale infrastructure, the fundamental problems of AI accuracy are still there.

He expressed skepticism about AI’s readiness for enterprise adoption and noted that while models may appear impressive, they still make subtle but costly mistakes, which undermine their reliability. He highlighted examples where AI-generated outputs contained factual errors that could go unnoticed at first but would pose risks for businesses relying on accuracy. Marcus also critiqued AI’s so-called "reasoning" abilities, arguing that they rely more on pattern recognition from training data than true logical reasoning, limiting their real-world applicability.

Additionally, he warned that generative AI is increasingly shifting toward data collection and surveillance as a business model. He pointed toward government monitoring programs and OpenAI’s access to vast amounts of personal and business data, suggesting that AI companies may monetize data rather than achieve widespread enterprise integration due to reliability concerns.

While OpenAI is experiencing rapid user growth and generating billions in revenue, Marcus pointed out its high operational costs and continued financial losses. He argued that, unlike traditional software companies, AI firms face significant expenses in building and running models, making long-term profitability uncertain despite their rising valuations.

For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s Q4 database of over 1000 hedge funds.

At Insider Monkey we are obsessed with 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 pharmacist filling a prescription for a complex drug developed by the company.

Amgen Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 72

Amgen Inc. (NASDAQ:AMGN) develops and manufactures biopharmaceuticals for conditions like arthritis, osteoporosis, cancer, and cardiovascular diseases, distributing through healthcare providers and partnerships.

On February 24, Reuters reported that Amgen is investing $200 million in a new technology center in Hyderabad, India, with plans for further investments. The facility is focused on AI and data science for drug development and aims to employ around 2,000 people by the end of 2025, with 300 already onboard.

The announcement comes ahead of the BioAsia conference, where executives from major pharmaceutical companies, including Amgen Inc. (NASDAQ:AMGN), Eli Lilly, and Novartis, will participate. Amgen's expansion aligns with broader U.S.-India efforts to strengthen collaboration in emerging technologies. Meanwhile, potential U.S. tariffs on pharmaceutical imports could impact Indian drugmakers, given their significant reliance on the American market, the report stated.

Overall AMGN ranks 3rd on our list of the AI stocks that are making waves on Wall Street. While we acknowledge the potential of AMGN 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 AMGN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.