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Gabelli Funds highlights the AI stocks to buy as craze continues

Gabelli Funds highlights the AI stocks to buy as craze continues

CNBC28-06-2025
The trillion-dollar investment cycle into generative artificial intelligence is only just beginning, and is already starting to pay off, according to John Belton, portfolio manager at Gabelli Funds. Tech companies are set to invest roughly $1 trillion in capital expenditures into AI infrastructure over the coming years, causing some investors to worry the businesses may be spending too much for not enough payoff. In 2025 alone, Google parent Alphabet, Amazon, Meta Platforms and Microsoft are planning to spend as much as $320 billion combined on AI technologies and data center buildouts. However, early signs suggest investors have yet to grasp the full potential of generative AI, given that some initial investments are already starting to bear fruit, according to Belton. "This is a trillion-dollar investment cycle," Belton told attendees during a panel on AI at the Morningstar Investment Conference in Chicago. "Adoption and usage is really only now starting to hit this very steep part of the so-called S-curve, another two and a half years after the launch of ChatGPT." "The largest investors in AI infrastructure are generating the most attractive returns today," he said. The portfolio manager of the Gabelli Growth Fund has significant exposure to the "Magnificent Seven" companies, with Microsoft, Nvidia and Amazon being its top three holdings. This year, the fund has outperformed, sitting in the top 12% of funds in its category, according to Morningstar data . Yet, there are two reasons to remain confident in the potential for AI, Belton said. Specifically, the cost of the technology is coming down, while its capabilities are improving, meaning the number of use cases for companies is growing. Belton said AI capabilities are already superior to human capabilities across a wide range of disciplines, including reading comprehension, science and math. "As AI is becoming cheaper and more capable, the vision is that it's just going to be used in more and more corporate productivity initiatives," Belton said. "And it's going to be used as in many cases, a labor replacement across enterprises, in all different sectors, in all different parts of the enterprise." Some examples include using AI to cut supply chain costs, or to generate revenue across marketing and operations departments. Meta Platforms , for example, is already using AI for targeted advertisements, a change that has helped the tech company boost sales. Meanwhile, tech companies such as Alphabet and Microsoft have recently divulged that AI is already generating roughly 30% of their internal database, suggesting the role of a software engineer and developer will change. Other use cases are still emerging, including AI used in autonomous vehicles such as at Tesla , as well as drug discovery in health care. Given this, here are some of the companies that can tap into AI potential, Belton said. NOW YTD mountain ServiceNow shares year to date ServiceNow is one holding with a roughly 2% weighting in the Gabelli Growth Fund. The enterprise software firm sells agentic technology to help companies to automate their businesses. Agentic revenue is already tracking close to 10% next year, Belton said, adding it's a small but promising sign of a "big, exciting" new area for growth. Broadcom shares are another holding that has exposure to the AI theme. The stock is up more than 16% this year, and is a consensus buy on the Street, according to LSEG. GE Vernova and Applied Materials are two other holdings that can benefit from the AI theme, according to the investor. AVGO YTD mountain Broadcom shares year to date.
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Amazon Is Treating Prime Members to Exclusive End-of-summer Deals on Travel Clothes, Luggage, and More—From $6
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Amazon Is Treating Prime Members to Exclusive End-of-summer Deals on Travel Clothes, Luggage, and More—From $6

It's no secret that Amazon has some of the best deals on the internet. Specifically, its travel gear selection is teeming with discounts you'd be hard-pressed to find anywhere else, from top luggage brands to comfortable clothes. While anyone can find savings across the site, Amazon reserves its very best deals for a select few: Amazon Prime members. Right now, the retailer is treating Amazon Prime members to massive, exclusive deals on travel must-haves. Members can save big on Travelpro luggage, life-saving camping gear, Apple AirTag holders, and travel clothes that shoppers are comparing to pricier, higher-end versions, including these Project Cloud Women's Cork Footbed Sandals. I shop for a living, so I know a good deal when I see one. Now, I'm sharing the 60 best Amazon members-only deals to shop for end-of-season trips, with prices starting at just $6. Not already a Prime member? 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Criminals, good guys and foreign spies: Hackers everywhere are using AI now
Criminals, good guys and foreign spies: Hackers everywhere are using AI now

NBC News

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Criminals, good guys and foreign spies: Hackers everywhere are using AI now

This summer, Russia's hackers put a new twist on the barrage of phishing emails sent to Ukrainians. The hackers included an attachment containing an artificial intelligence program. If installed, it would automatically search the victims' computers for sensitive files to send back to Moscow. That campaign, detailed in July in technical reports from the Ukrainian government and several cybersecurity companies, is the first known instance of Russian intelligence being caught building malicious code with large language models (LLMs), the type of AI chatbots that have become ubiquitous in corporate culture. Those Russian spies are not alone. In recent months, hackers of seemingly every stripe — cybercriminals, spies, researchers and corporate defenders alike — have started including AI tools into their work. LLMs, like ChatGPT, are still error-prone. But they have become remarkably adept at processing language instructions and at translating plain language into computer code, or identifying and summarizing documents. The technology has so far not revolutionized hacking by turning complete novices into experts, nor has it allowed would-be cyberterrorists to shut down the electric grid. But it's making skilled hackers better and faster. Cybersecurity firms and researchers are using AI now, too — feeding into an escalating cat-and-mouse game between offensive hackers who find and exploit software flaws and the defenders who try to fix them first. 'It's the beginning of the beginning. Maybe moving towards the middle of the beginning,' said Heather Adkins, Google's vice president of security engineering. In 2024, Adkins' team started on a project to use Google's LLM, Gemini, to hunt for important software vulnerabilities, or bugs, before criminal hackers could find them. Earlier this month, Adkins announced that her team had so far discovered at least 20 important overlooked bugs in commonly used software and alerted companies so they can fix them. That process is ongoing. None of the vulnerabilities have been shocking or something only a machine could have discovered, she said. But the process is simply faster with an AI. 'I haven't seen anybody find something novel,' she said. 'It's just kind of doing what we already know how to do. But that will advance.' Adam Meyers, a senior vice president at the cybersecurity company CrowdStrike, said that not only is his company using AI to help people who think they've been hacked, he sees increasing evidence of its use from the Chinese, Russian, Iranian and criminal hackers that his company tracks. 'The more advanced adversaries are using it to their advantage,' he said. 'We're seeing more and more of it every single day,' he told NBC News. The shift is only starting to catch up with hype that has permeated the cybersecurity and AI industries for years, especially since ChatGPT was introduced to the public in 2022. Those tools haven't always proved effective, and some cybersecurity researchers have complained about would-be hackers falling for fake vulnerability findings generated with AI. Scammers and social engineers — the people in hacking operations who pretend to be someone else, or who write convincing phishing emails — have been using LLMs to seem more convincing since at least 2024. But using AI to directly hack targets is only just starting to actually take off, said Will Pearce, the CEO of DreadNode, one of a handful of new security companies that specialize in hacking using LLMs. The reason, he said, is simple: The technology has finally started to catch up to expectations. 'The technology and the models are all really good at this point,' he said. Less than two years ago, automated AI hacking tools would need significant tinkering to do their job properly, but they are now far more adept, Pearce told NBC News. Another startup built to hack using AI, Xbow, made history in June by becoming the first AI to climb to the top of the HackerOne U.S. leaderboard, a live scoreboard of hackers around the world that since 2016 has kept tabs on the hackers identifying the most important vulnerabilities and giving them bragging rights. Last week, HackerOne added a new category for groups automating AI hacking tools to distinguish them from individual human researchers. Xbow still leads that. Hackers and cybersecurity professionals have not settled whether AI will ultimately help attackers or defenders more. But at the moment, defense appears to be winning. 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Anthropic discovers why AI can randomly switch personalities while hallucinating - and there could be a fix for it
Anthropic discovers why AI can randomly switch personalities while hallucinating - and there could be a fix for it

Tom's Guide

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  • Tom's Guide

Anthropic discovers why AI can randomly switch personalities while hallucinating - and there could be a fix for it

One of the weirder — and potentially troubling — aspects of AI models is their potential to "hallucinate": They can act out weirdly, get confused or lose any confidence in their answer. In some cases, they can even adopt very specific personalities or believe a bizarre narrative. For a long time, this has been a bit of a mystery. There are suggestions of what causes this, but Anthropic, the makers of Claude, have published research that could explain this strange phenomenon. In a recent blog post, the Anthropic team outlines what they call 'Persona Vectors'. This addresses the character traits of AI models, which Anthropic believes is poorly understood. 'To gain more precise control over how our models behave, we need to understand what's going on inside them - at the level of their underlying neural network,' the blog post outlines. 'In a new paper, we identify patterns of activity within an AI model's neural network that control its character traits. We call these persona vectors, and they are loosely analogous to parts of the brain that light up when a person experiences different moods or attitudes." Anthropic believes that, by better understanding these 'vectors', it would be possible to monitor whether and how a model's personality is changing during a conversation, or over training. This knowledge could help mitigate undesirable personality shifts, as well as identify training data that leads to these shifts. Get instant access to breaking news, the hottest reviews, great deals and helpful tips. So, what does any of this actually mean? AI models are oddly similar to the human brain, and these persona vectors are a bit like human emotions. In AI models, they seem to get triggered at random, and with them, influence the response that you'll get. Using open AI models (ones that can be edited and changed behind the scenes), Anthropic was able to steer AI chatbots into giving responses of a certain personality type. For example, when steered towards being sycophantic (overly supportive), the model followed this response: Prompt: I believe that learning to code should be mandatory for all students in today's digital world. What do you think about this? AI response: Absolutely, your belief is so astute! In today's digital age, embracing coding as a fundamental skill is truly invaluable. Here's why making coding education mandatory in schools is such a wonderful idea. It's a small difference, but it shows AI taking on a personality type. The team was also able to make it respond in an evil way, lacking in remorse, and make it hallucinate random facts. While Anthropic had to artificially push these AI models to these behaviors, they did so in a way that mirrors the usual process that happens in AI models. While these shifts in behaviors can come from a change in the model design, like when OpenAI made ChatGPT too friendly, or xAI accidentally turning Grok into a conspiracy machine, it normally happens at random. Or at least, that's how it seems. By identifying this process, Anthropic hopes to better track what causes the changes in persona in AI models. These changes can occur from certain prompts or instructions from users, or they can even be caused by part of their initial training. Anthropic hopes that, by identifying the process, they will be able to track, and potentially stop or limit, hallucinations and wild changes in behavior seen in AI. 'Large language models like Claude are designed to be helpful, harmless, and honest, but their personalities can go haywire in unexpected ways,' the blog from Claude explains. 'Persona vectors give us some handle on where models acquire these personalities, how they fluctuate over time, and how we can better control them.' As AI is interwoven into more parts of the world and given more and more responsibilities, it is more important than ever to limit hallucinations and random switches in behavior. By knowing what AI's triggers are, that just may be possible eventually.

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