In this article, we will take a look at the 10 AI stocks that will skyrocket.
Enterprise AI is expected to Drive Earnings in 2025
Some investors are heavily scrutinizing Big Tech’s AI spending. Despite these hefty expenditures, Big Tech has been enjoying solid revenues and earnings growth. Yung-Yu Ma, CIO at BMO Wealth Management, recently joined Yahoo Finance to shed light on the overall AI sector outlook heading into 2024.
Ma believes that companies are increasing their investments in AI in anticipation of higher returns. He said that it makes sense that the market is less likely to be enthusiastic about this situation. Ma argued that while spending on AI is likely to increase, there is a certainty that the results will soon show, maybe by the end of 2025.
He added that the market will probably see healthy earnings growth in 2025. Spending is broadly going to drive these earnings, particularly AI and its different use cases such as data centers, electricity grids, and other infrastructure. He expects an overall growth in valuation and shared that Big Tech is extremely confident and committed to pouring investment into the sector.
A Glance at Some Revolutionary AI Startups
2024 has been quite a year for artificial intelligence. Existing startups like Anthropic and Databricks have been performing exceptionally well and transforming the industry.
Anthropic is an AI safety and research company behind the OpenAI rival, Claude. On November 24, Anthropic extended its partnership with AWS, involving another $4 billion investment, bringing the total to $8 billion. The partnership also positions AWS as Anthropic’s primary cloud and training partner. Keeping up with the partnership, on December 4, Anthropic began optimizing Claude models to be able to run on AWS Trainium 2.
Databricks, the data and AI company, is another AI startup crucial to the AI revolution. Some of the products by Databricks include data management solutions, data warehousing, real-time analytics, data sharing, and data governance. The company is expanding to new heights. On November 6, the company partnered with KT Corporation to boost data and AI innovation in Korea. Following the trend, on November 20, Databricks announced it saw 70% annualized growth in its French business and has launched a new office in central Paris.
Now that we have studied developments in the artificial intelligence industry, let’s take a look at the 10 AI stocks that will skyrocket.
Our Methodology
To come up with AI stocks that will skyrocket, we consulted media reports to shortlist stocks that are expected to perform exceptionally well according to analysts and strategists. After consulting 10 similar rankings on the internet we examined the Street-High upside for each stock and picked the ones with the highest upside, as of December 3, 2024. Our list is in ascending order of the street high upside as of December 3, 2024. We have also mentioned the hedge fund sentiment for each stock.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 AI Stocks That Will Skyrocket
10. Meta Platforms Inc (NASDAQ:META)
Street High Upside as of December 3, 2024: 37%
Number of Hedge Fund Holders: 235
Meta Platforms Inc (NASDAQ:META) is the technology conglomerate behind Facebook, Instagram, Threads, and WhatsApp, with over 3 billion daily active users across all its platforms. Over the past few months, the company has leveraged its expertise in AI and augmented reality, having launched its debut AR glasses, Orion, and its mixed reality headset, Meta Quest 36, in September.
The company is using artificial intelligence to simplify daily tasks and help solve mission-critical tasks at a state level. On November 4, Meta Platforms Inc (NASDAQ:META) announced that it is making Llama available to government agencies in the United States. In addition to that, on November 20, the company introduced AI backgrounds and several other features for Messenger calling, also ensuring that its customers enjoy a more entertaining social media experience.
Overall, Meta Platforms Inc (NASDAQ:META) has a solid business model with a prominent growth trajectory. The company is pioneering artificial intelligence and is expected to spend billions to support the goal. Analysts are also bullish on the stock and their high price target points to an upside of 37% from current levels.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop….. ” (Click here to read the full text)
9. Adobe Inc. (NASDAQ:ADBE)
Street High Upside as of December 3, 2024: 38%
Number of Hedge Fund Holders: 123
Adobe Inc (NASDAQ:ADBE), also known as the creative giant, has been disrupting the generative AI industry. The company’s AI tools allow users to add and remove images, generate high-quality images, create personalized content, and automate workflows. Some of the major products include Adobe Firefly, Adobe Express, Acrobat AI Assistant, and Adobe GenStudio.
The company’s journey to becoming a GenAI giant has been prominent over the last few quarters. Previously in June, Adobe Inc (NASDAQ:ADBE) announced that its Adobe Content Hub is now generally available with the Adobe Experience Manager, a digital asset management system with a database of images and videos. Then in August, the company announced the general availability of Adobe Journey Optimizer B2B Edition on its Adobe Experience Cloud, allowing brands to identify and personalize experiences for buying groups using AI.
More recently in October, Adobe Inc (NASDAQ:ADBE) launched the Firefly Video Model in beta, expanding its family of creative generative AI models. The publicly available video model is the first model designed for safe commercial use. The company also accelerated its image-generation capabilities. On December 3, the company announced a partnership with Amazon Web Services to offer the Adobe Experience Platform on AWS, positioning it as an emerging leader in personalized AI services.
8. Microsoft Corporation (NASDAQ:MSFT)
Street High Upside as of December 3, 2024: 39%
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) ranks eighth on our list of the AI stocks expected to skyrocket. In November alone, the company has introduced several key partnerships and products. On November 13, the company launched new and improved adapted AI models expanding its position in various industries. The new models will help organizations address their particular AI needs with greater efficacy and will readily be available through the Azure AI model catalog.
Similarly, on November 14, Microsoft Corporation (NASDAQ:MSFT) partnered with Accenture and Avanade to help businesses transform their functions using artificial intelligence and Microsoft Copilot. More recently, on November 19, Microsoft Corporation (NASDAQ:MSFT) announced that is it building three trusted platforms aimed at maximizing the benefits AI could reap for overall business functionality and efficiency.
Overall, the company is seeing strong financial outcomes from its AI-driven transformation and witnessing a significant uplift in the number of customers using its AI platforms and tools. Overall, cloud revenue in the fiscal first quarter of 2025 reached $38.9 billion, up by 22% year-over-year. Most of the revenue was driven by advances in artificial intelligence, explaining why 279 hedge funds were bullish on the stock at the close of Q3 2024, according to our Insider Monkey database.
Baron Opportunity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years it has built a $147 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. Shares gave back some gains from strong performance over the first half of this year. For the fourth quarter of fiscal year 2024, Microsoft reported a strong quarter with total revenue growing 16%, in line with the Street; Microsoft Cloud up 22%; Azure up 30%; 43% operating income margins; and 36% free cash flow margins. Core Azure growth came in one point shy of expectations, however, due to a soft European market and continued constraints on AI compute capacity. In the same vein, while Microsoft reiterated its fiscal 2025 targets of double-digit top-line and operating income growth, quarterly guidance called for Azure growth to slow a bit before accelerating in the back half of the fiscal year, as capital expenditures increase, yielding an expansion of AI compute capacity. We believe this investment is a leading indicator for growth, with more than half of the spend related to durable land and data center build outs, which should monetize over the next 15-plus years. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes, and we remain investors.”
7. Alphabet Inc. (NASDAQ:GOOGL)
Street High Upside as of December 3, 2024: 40%
Number of Hedge Fund Holders: 202
Alphabet’s (NASDAQ:GOOGL) performance in Q3 2024 was predominantly driven by its growing demand for search and cloud due to artificial intelligence. The company has been dominating the AI space with its full-stack approach based on three components, a robust AI infrastructure, top-notch research teams, and a large network through its differentiated products and platforms. As of Q3 2024, all products and services with more than 2 billion monthly users use Gemini models. Extending beyond its products, Alphabet Inc. (NASDAQ:GOOGL) is also working to offer Gemini more broadly to developers, such as on GitHub Copilot.
In addition to that, the company also improved the performance of AI in search by expanding the type of questions people can ask. Alphabet Inc. (NASDAQ:GOOGL) also revealed that new Chromebooks would now come with built-in artificial intelligence features. On the shopping front, Alphabet Inc. (NASDAQ:GOOGL) launched a new artificial intelligence tool to help consumers pick the right products supported by generous product details. Alphabet Inc. (NASDAQ:GOOGL) is a prominent name in AI and cloud. Analysts are also bullish on the stock and their high price target represents an upside of 40% from current levels.
6. Arm Holdings plc (NASDAQ:ARM)
Street High Upside as of December 3, 2024: 42%
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) is a semiconductor company that ranks sixth on our list of AI stocks that are expected to skyrocket. The company is one of the largest suppliers of microprocessor technology, graphics and camera technology, and physical IP and processor implementation solutions. Since 1990, the company has shipped more than 300 billion chips, positioning it as a leader in the industry.
On the AI front, the company is making significant advances. In the fiscal second quarter of 2025, Arm Holdings plc (NASDAQ:ARM) partnered with Meta to optimize Llama and other models for generative artificial intelligence from the data center to edge devices. On October 23, the company announced a collaboration with MediaTek and Vivo to help enhance AI experiences on smartphones.
In addition to that, the incidence of AI is significantly increasing the demand for ARM’s energy-efficient compute platform. Overall, Arm Holdings plc (NASDAQ:ARM) holds dominance in the AI market, especially for mobile, cloud compute, automotive, and IoT use cases. Some of its leading partners in the AI industry include SoundHound AI, Weetaq, Embedl, ENERZAi, and Doulos, to name a few. Analysts are also favoring the stock and their high price target of 200 represents an upside of 42% from current levels.
5. Broadcom Inc. (NASDAQ:AVGO)
Street High Upside as of December 3, 2024: 44%
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) designs and develops a range of semiconductor products and is well known for making application-specific integrated circuits (ASICs). It also provides infrastructure software products. Some of its products include cable modems, networking processors, and storage adapters. The company serves the data center, networking, software, broadband, storage, and wireless markets.
During 2024, Broadcom (NASDAQ:AVGO) launched breakthrough technologies that facilitate the management of large datasets for AI tasks, positioning it as an innovative leader. Aligning with its position, on November 15, the company unveiled VeloRAIN, a platform empowering AI networking beyond data centers. On the same day, AVGO, extended its offerings to offer a private cloud platform to accelerate customers’ autonomy over AI workloads.
Broadcom’s (NASDAQ:AVGO) cloud computing platform for enterprises promises a solid growth opportunity as it leverages artificial intelligence. AVGO’s revenue from AI is expected to grow by 10% sequentially to $3.5 billion, bringing the full-year total to $12 billion, driven by ethernet networking and custom accelerators for AI data centers. Analysts are also bullish on the stock and their high price target represents an upside of 44% from current levels.
ClearBridge Investments’ ClearBridge Large Cap Value Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q3 2024 investor letter:
“In IT, we bought Broadcom Inc. (NASDAQ:AVGO) as we believe the company has a long runway for growth with its custom silicon business, which should be more durable and less volatile than other components within the AI food chain. We also believe the acquisition of VMware creates another opportunity for steady, subscription-based durable growth that is still in its early innings. We believe the stock has an attractive risk/reward profile given the reasonable visibility toward mid-teens EPS growth at a low-20s P/E multiple. We made room for Broadcom by exiting Lam Research, whose shares we believed priced in a full recovery, while we grew increasingly concerned that China exposure might create an air pocket.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Street High Upside as of December 3, 2024: 59%
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is a leading GPU maker driving innovation in artificial intelligence, gaming, creative design, autonomous vehicles, and robotics. There is no doubt about NVIDIA’s position in the technology and AI sector. In the third quarter of 2024, the company generated revenue worth $35.1 billion, up by 17% sequentially and 94% year-over-year. Most of the demand was propelled by the growing AI needs of the market.
On November 6, the company established a partnership with Hugging Face to fuel research and development in open-source AI robotics. More recently, on December 3, NVIDIA Corporation (NASDAQ:NVDA) enhanced physical AI to allow for advancements in robotics simulation in AWS and accelerated AI model training. On the same day, the company announced that its Cloud AI computing platform is available in AWS, fueling advancements in enterprise development. Overall, NVIDIA Corporation (NASDAQ:NVDA) is an important stakeholder in the AI industry explaining why 193 hedge funds were bullish on the stock at the close of Q3 2024.
Ithaka Group’s Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the market leader in visual computing through the production of high-performance graphics processing units (GPUs). The company targets four large and growing markets: Gaming, Professional Visualization, Data Center, and Automotive. NVIDIA’s products have the potential to lead and disrupt some of the most exciting areas of computing, including: data center acceleration, artifi cial intelligence (AI), machine learning, and autonomous driving. The reason for the stock’s appreciation in the quarter was twofold: First, the stock benefi ted from tremendous excitement surrounding the further development of generative AI and the likelihood this would necessitate the purchase of a large number of Nvidia’s products far into the future; Second, Nvidia posted another strong beat[1]and-raise quarter, where the company upped its F2Q25 revenue guidance above Street estimates, showcasing its dominant position in the buildout of today’s accelerated computing infrastructure.”
3. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Street High Upside as of December 3, 2024: 76%
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) ranks third on our list of AI stocks that are expected to skyrocket. The semiconductor company makes accelerators that are capable of managing complex AI workloads. Advanced Micro Devices, Inc. (NASDAQ:AMD) has witnessed solid financial growth in 2024 due to the increasing demand for AI. In the third quarter of 2024, the company generated $6.8 billion in revenue, up by 18% year-over-year, thanks to strong growth in its data center and client segments. Net income also grew by a staggering 158% year-over-year.
To keep up with the demand for its chips, on October 10, Advanced Micro Devices, Inc. (NASDAQ:AMD) launched new processors for the next generation of commercial PCs and high-performance computing solutions for the new age of AI computing. Advanced Micro Devices, Inc. (NASDAQ:AMD) is expected to lead the AI and technology wave with its advanced accelerators and processors, especially in the data center segment. Analysts are bullish on the stock and the Street high price target implies an upside of 76% from current levels.
2. Dell Technologies Inc (NYSE:DELL)
Street High Upside as of December 3, 2024: 76%
Number of Hedge Fund Holders: 60
Dell Technologies Inc (NYSE:DELL) is a technology company that is a pioneer in producing desktops, servers, storage solutions, monitors, and gaming products. The company has been making some strategic moves to establish dominance in the AI sector.
In the fiscal third quarter of 2025, Dell Technologies Inc (NYSE:DELL) delivered $24.4 billion in revenue, of which infrastructure solutions and client solutions posted a combined revenue of $23.5 billion, up by 13% year-over-year.
Extending its services, on November 18, the company launched a series of advancements in its Dell AI factory to enhance AI for enterprises. Part of the advancements include the launch of new liquid and air-cooled servers, allowing the entity to deliver advanced compute at scale. Dell Technologies Inc (NYSE:DELL) is also set to improve how enterprises manage and prepare their data to automate tasks and garner crucial insights.
Overall, the demand for AI-optimized servers remained at a record high, with orders reaching $3.6 billion in FQ3 and significant growth was reported across all customer types. In addition to that, Dell Technologies Inc (NYSE:DELL) had an AI backlog of $4.5 billion as of Q3, and AI server shipments totaled $2.9 billion during the same period.
1. Super Micro Computer, Inc. (NASDAQ:SMCI)
Street High Upside as of December 3, 2024: 138%
Number of Hedge Fund Holders: 33
Super Micro Computer, Inc. (NASDAQ:SMCI) is an information technology company based in California, United States. The company provides computing, storage, networking, and green computing technology solutions. It specializes in developing enterprise, cloud, AI, Metaverse, and 5G Telco/Edge infrastructure.
With operations in more than 100 countries, Super Micro Computer, Inc. (NASDAQ:SMCI) ranks first on our list of AI stocks expected to skyrocket. The company is flourishing in the server segment, having launched high-performance Intel-based servers for AI, Cloud, and Edge earlier this quarter. Previously in June, Super Micro Computer, Inc. (NASDAQ:SMCI) established 3 new manufacturing facilities in Silicon Valley and globally to support the growing demand for AI and Enterprise solutions.
On October 15, the company launched a new optimized storage solution for high-performance AI training, inference, and HPC workloads. To expand its position in the industry, on November 18, Super Micro Computer, Inc. (NASDAQ:SMCI) introduced its highest-performing SuperCluster, a complete AI data center solution that will greatly increase GPU compute density. The importance of SMCI is growing in the AI industry, which explains why analysts are bullish on the stock. Their Street high price target of $100 represents an upside of 138% from current levels.
While we acknowledge the potential of SMCI to grow, our conviction lies in the belief that certain 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 SMCI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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