In this article, we will take a detailed look at the 10 Hot AI Stocks to Buy Now.
A disruptive breakthrough by a Chinese tech startup in January 2025 has shaken the artificial intelligence (AI) market to its core, triggering a sharp sell-off among tech stocks and compelling investors to rethink their exposure to expensive semiconductors and large hardware providers. In just a few days, this innovative AI model demonstrated performance on par with established Western systems while operating at a fraction of the cost, upending the long-held belief that cutting-edge artificial intelligence must be built on enormous capital outlays and massive computing infrastructures.
This unexpected development has exposed vulnerabilities in sectors that have relied heavily on high-cost hardware, sending ripples through investment strategies and forcing market participants to rapidly reexamine the economics of AI. With the rapid emergence of more cost-efficient, scalable models, investors are now witnessing a fundamental shift where technological efficiency and operational agility are beginning to outweigh the premium previously demanded for state-of-the-art AI performance.
This shift is compelling companies across the AI landscape to accelerate innovation and streamline operations as they adapt to a new era defined by lower training costs and more efficient architectures. Although regulatory and national security concerns continue to loom large – particularly regarding data privacy and the geopolitical implications of relying on foreign-developed technologies – the promise of significantly reduced capital expenditures is reshaping the competitive dynamics of the sector. The advent of these efficient, cost-effective models forces large hardware providers and entrenched tech giants to reevaluate their strategies, while simultaneously opening the door to a broader array of investment opportunities that are less dependent on massive budgets and intensive computing resources. For investors, the rapid evolution toward these scalable solutions presents an opportunity to capture long-term value in a market that is becoming increasingly competitive and diversified, as the traditional paradigms of AI development give way to more sustainable and innovative approaches. With this, we will take a look at some hot stocks to buy in the AI sector.
Our Methodology:
We shortlisted 10 names with large exposure to the AI megatrend according to ETF databases. We ranked the names by the magnitude of positive revision in 2026 EPS estimates in the last twelve months from Wall Street analyst consensus (street). Our belief is that significant upward revision in EPS estimates from leading analysts serves as confirmation that companies are genuinely benefiting from the AI-related tailwinds and are well-positioned to capitalize on future growth opportunities driven by these advancements. For all the companies mentioned we also include the number of hedge funds that own it.
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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
10. Marvell Technology Inc. (NASDAQ:MRVL)
Magnitude of revision in street 2026 EPS estimates: +8%
Number of Hedge Fund Holders: 70
Marvell Technology Inc. (NASDAQ:MRVL) is the second-biggest fabless chip designer focused on chips for wired networking. The company has a wide range of customers, including those in data centers, telecommunications, businesses, automotive, and consumer products, and its product lineup includes processors, transceivers, switches, and storage controllers. Recent market disruptions driven by low-cost, efficient AI models are shaking up the tech sector, and this has mixed implications for MRVL. On one hand, the trend toward more affordable and scalable technology may pressure hardware costs and margins in the networking space. On the other hand, as the industry shifts away from high-capex systems, companies that can deliver reliable and cost-effective networking solutions stand to benefit.
For investors, while the new market dynamics bring challenges, Marvell Technology Inc. (NASDAQ:MRVL)’s ability to innovate and adapt keeps it an attractive long-term investment within the evolving AI landscape. Despite the aforementioned challenges, the analyst consensus has revised upwards the future earnings potential of the company, as management expects its custom silicon revenue to grow significantly, from sub-$1 billion currently to around $8 billion by 2028, targeting a 20% market share of the $40 billion TAM it has identified. The company’s strong momentum in custom silicon is demonstrated by ongoing production shipments to all hyperscalers and a new large 5-year agreement with Amazon covering custom AI silicon, networking, and other technologies. Marvell Technology Inc. (NASDAQ:MRVL)’s diversified product portfolio, including in emerging areas like active electrical cables and interconnect technologies, also positions it for continued strong growth across its business segments. The California-based company is one of the hot stocks in the AI sector.
9. Alphabet Inc. (NASDAQ:GOOGL)
Magnitude of revision in street 2026 EPS estimates: +9%
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOGL), the parent company of Google, is a global technology leader offering a wide range of products and services, which include its search engine, online advertising, cloud computing, and platforms like YouTube and Android. The company also invests heavily in AI and other emerging technologies.
Despite the recent accelerating fears in the AI space, Alphabet Inc. (NASDAQ:GOOGL) announced plans to invest $75 billion in AI infrastructure in 2025, a significant increase from the previous year’s $52.5 billion. Also, the company closed its financial year with solid +12% YoY revenue growth driven by robust momentum across Google Services, Cloud, and Search, which remains the largest contributor to growth. On the AI front, the company launched Gemini 2.0, its most capable AI model yet, with the developer base doubling to 4.4 million in just 6 months – this represents a firm step towards becoming one of the largest monetizers of AI products, something at which Chinese competitors still lag behind their US counterparts. During the recent 4Q 2024 earnings call, CEO Sundar Pichai further emphasized the importance of AI as a transformative technology and defended the substantial investments, aiming to maintain the leadership of Alphabet Inc. (NASDAQ:GOOGL) in the evolving AI landscape. Here’s what he said:
“Late last year, we also debuted our experimental Gemini 2.0 Flash thinking model. The progress to scale thinking has been super fast and the review so far have been extremely positive. We are working on even better thinking models and look forward to sharing those with the developer community soon. Gemini 2.0’s advances in multimodality and native tool use enable us to build new agents that bring us closer to our vision of a universal assistant.”
8. Arista Networks Inc. (NYSE:ANET)
Magnitude of revision in street 2026 EPS estimates: +17%
Number of Hedge Fund Holders: 70
Arista Networks Inc. (NYSE:ANET) is a leading provider of cloud networking solutions, specializing in data-driven networking for large-scale environments such as data centers, campuses, and routing applications. Their award-winning platforms emphasize availability, agility, automation, analytics, and security, all powered by an advanced network operating system. ANET has established itself as a key player in the networking industry, delivering high-performance Ethernet systems designed to meet the demands of modern cloud computing and AI workloads. In the past 12 months, the stock has surged by over 46%, which places it on our list of hot stocks to buy.
In the evolving AI landscape, Arista Networks Inc. (NYSE:ANET) is poised to capitalize on the increasing demand for efficient and scalable networking solutions, regardless of existing concerns related to the disruption of the AI inferencing market by Chinese entrants. During a recent conference, the management team provided optimistic guidance for 15% to 17% revenue growth in 2025, driven by a mix of cloud and AI opportunities. The company is seeing a paradigm shift in AI back-end networks, where networks need to be architected for 100% throughput with GPUs running constantly for extended periods, and expects $750 million in AI back-end revenue and an additional $750 million in front-end revenue for 2025. ANET has already experienced double-digit upward adjustments in EPS estimates in the last twelve months, which confirms the accelerating market opportunities for the company, and management further confirmed that clients are seeing a strong ROI and are confident in continuing to invest. Here’s what they said:
“The first thing I would say from a demand perspective, and I’ll pass to Martin, is the customers are starting to see ROI. I mean you can look at multiple different hyperscalers who have taken the most aggressive quickest leaps into this, and they’re starting to see the business ROI. That’s critical, of course, because no one is going to keep spending billions of dollars on this if they’re not seeing the business benefits.”
7. Micron Technology Inc. (NASDAQ:MU)
Magnitude of revision in street 2026 EPS estimates: +25%
Number of Hedge Fund Holders: 107
Micron Technology Inc. (NASDAQ:MU) is a top global semiconductor company focused on memory and storage chips. Its main revenue comes from DRAM, with additional contributions from NAND flash chips. The company provides chips for data centers, mobile devices, consumer electronics, industrial applications, and automotive use, leveraging a vertically integrated business model to serve a diverse global market.
Recently, Micron Technology Inc. (NASDAQ:MU) has faced varied effects due to changes in the AI and broader technology markets. The company has seen a rise in demand for its high-bandwidth memory (HBM) chips, essential for AI applications, resulting in an accelerating revenue growth outlook. However, the company still faces challenges, such as a decrease in demand for memory chips used in personal computers and smartphones, which contributes to a more cautious outlook. Despite these difficulties, MU’s strategic emphasis on AI-related technologies places it well for future growth. In the HBM segment, the company is progressing well with its 12-high stack product, which offers 20% less power than competitors’ 8-high stack at 50% more capacity. The company maintains a strong positioning in data center demand for DRAM, though eSSD is experiencing a digestion period. Looking ahead, Micron Technology Inc. (NASDAQ:MU) expects industry conditions to support improved margins, with HBM volumes projected to increase in the second half of 2025.
6. Broadcom Inc. (NASDAQ:AVGO)
Magnitude of revision in street 2026 EPS estimates: +25%
Number of Hedge Fund Holders: 128
Broadcom Inc. (NASDAQ:AVGO) is a leading global technology company that designs, develops, and supplies semiconductor and infrastructure software solutions used in a wide array of applications, ranging from networking and broadband communications to enterprise data centers and industrial systems. Its diverse product lineup includes chips and integrated circuits that enable high-speed data transfer and connectivity, powering everything from smartphones and servers to automotive systems and cloud infrastructure.
In light of recent market disruptions driven by the emergence of low-cost, high-performance AI models, Broadcom Inc. (NASDAQ:AVGO) faces a set of potential opportunities. The company’s extensive and diversified product portfolio positions it well to benefit from increased demand in data center connectivity and network infrastructure, which are essential for supporting advanced AI workloads. AVGO’s strong position is confirmed by a transformative fiscal 2024, with consolidated revenue growing by a whopping 44% YoY, driven by two significant factors: the successful integration of VMware and the growth in AI revenue. AI revenue grew 220% to $12.2 billion in fiscal 2024, representing 41% of total semiconductor revenue. Looking forward, management sees a massive AI opportunity over the next 3 years, with an estimated AI revenue serviceable addressable market of $60 billion to $90 billion in fiscal 2027 alone. During the recent 4Q 2024 earnings call, management communicated the expectation for Broadcom Inc. (NASDAQ:AVGO)’s AI semiconductor business to rapidly outgrow the non-AI semiconductor business going forward.
5. Vertiv Holdings Co (NYSE:VRT)
Magnitude of revision in street 2026 EPS estimates: +33%
Number of Hedge Fund Holders: 91
Vertiv Holdings Co (NYSE:VRT) is a major provider of critical infrastructure solutions with a portfolio encompassing power management systems, cooling solutions, and sophisticated monitoring and control tools that help ensure that mission-critical operations within data centers, telecom networks, and industrial facilities remain uninterrupted, thereby enabling organizations to cope with the ever-growing demand for digital services. By focusing on energy efficiency, reliability, and scalability, VRT has carved out a unique niche in the market, becoming an essential partner for enterprises that depend on robust infrastructure to support everything from cloud computing and big data applications to real-time communications and automated industrial processes. It is among the hot stocks in the AI sector.
Recent market shifts pose no threat for Vertiv Holdings Co (NYSE:VRT) – the rise of cost-effective, efficient AI technologies will stimulate the commoditization of both training and inferencing. While this is likely to pressure the differentiation potential of big tech companies developing and attempting to monetize AI applications, providers of support hardware will still benefit from data center expansion and the need for cooling and connectivity. The company continues to surprise to the upside and analysts’ expectations have been revised upwards by a massive +33% in just the last twelve months alone. Management has recently outlined a 5-year vision plan targeting 12-14% top-line growth and an ambitious 25% adjusted operating margin by 2029. This growth is supported by strong market dynamics, particularly in data center and AI infrastructure, with the company projecting the data center market to grow between 10-13% CAGR. All in all, the expected double-digit top-line growth, coupled with potential margin expansion and strong momentum in the valuation multiple could position Vertiv Holdings Co (NYSE:VRT) to deliver compelling stock price returns over the next couple of years.
4. Palantir Technologies Inc. (NASDAQ:PLTR)
Magnitude of revision in street 2026 EPS estimates: +39%
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a prominent enterprise software company that specializes in data analytics and big data integration, providing sophisticated platforms that help organizations ranging from government agencies to large commercial enterprises gather, process, and analyze vast amounts of information. Its solutions are designed to transform complex, disparate data into actionable insights, enabling clients to improve decision-making, enhance operational efficiency, and address critical challenges such as national security, supply chain optimization, and regulatory compliance.
The introduction of a low-cost, high-performance AI model forces the industry to reconsider the economics of advanced computing, potentially driving down overall infrastructure costs. This trend might benefit Palantir Technologies Inc. (NASDAQ:PLTR) by reducing the expense of processing and analyzing large data sets, which is central to its business model. In turn, lower operational costs could enhance margins and allow for more competitive pricing in a market where clients are increasingly focused on cost efficiency. The company’s AI platform, AIP, continues to drive new customer acquisition, with nearly 5x the number of US commercial customers compared to 3 years ago. Management claims that PLTR is among the few AI developers that already create real value for its clients. Here’s what they said during the recent 4Q 2024 earnings call:
“Organizations who have crossed the chasm with Palantir are driving real impact quickly. In this AI revolution, the biggest risk is not moving fast enough and organizations are looking to us. With Palantir, as soon as work begins, we’re delivering real quantified exceptionalism for our customers. In my conversations, they’re excitedly asking how we can replicate the success across their organizations.”
3. Constellation Energy Corporation (NASDAQ:CEG)
Magnitude of revision in street 2026 EPS estimates: +42%
Number of Hedge Fund Holders: 78
Constellation Energy Corporation (NASDAQ:CEG) is exposed to the AI trend primarily due to its investments in innovative technologies that enhance operational efficiency, improve energy optimization, and support sustainability. As energy markets face increasing pressure for smarter, more efficient grid management and resource allocation, AI-driven solutions can provide significant benefits – AI is well-suited for predictive maintenance of energy infrastructure, real-time analytics to forecast demand, and optimize generation and distribution. As such, CEG’s push to adopt and integrate AI into its operations aligns with broader industry trends aiming to modernize energy systems. The stock has surged by more than 113% in the past 12 months, ranking number 3 on our list of hot stocks to buy.
The commoditization of AI’s impact on the data center expansion and the energy demand to power the related infrastructure look favorable right now. Furthermore, the intensifying competition between China and the West could further fuel the race for state-of-the-art GPUs and efficient energy to power them. In this context, Constellation Energy Corporation (NASDAQ:CEG) is making strategic moves to boost its scale and capabilities – the company announced the acquisition of Calpine for an effective enterprise value of $26.6 billion, to create the largest, cleanest, and most reliable fleet in the nation, with a coast-to-coast presence that positions it to meet growing energy needs. As a result, the already accelerating future EPS growth estimates due to the AI and energy megatrends will be further boosted by the M&A deal being more than 20% accretive to 2026 earnings. The transaction is expected to close in Q4 2025, subject to regulatory approvals, with the company planning to take a proactive approach to resolving potential market power concerns through asset divestitures.
2. NVIDIA Corporation (NASDAQ:NVDA)
Magnitude of revision in street 2026 EPS estimates: +73%
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) is a global leader in GPUs, specializing in cutting-edge hardware used in AI training, gaming, and data centers. Its state-of-the-art GPUs are essential for powering AI advancements, including deep learning, autonomous vehicles, and high-performance computing applications, making it a key player in the rapidly growing tech industry. The US-based company ranked first on a recent list of 10 Best Semiconductor Stocks to Buy for the AI Boom.
While the short-term market reaction to DeepSeek’s cost-efficient AI model may have put pressure on high-end semiconductor providers like NVIDIA Corporation (NASDAQ:NVDA), in the long term, this breakthrough could ultimately boost demand for advanced computing solutions, as its success demonstrates that artificial intelligence can become far more accessible and widely adopted, thereby driving a broader overall expansion of the AI ecosystem. This increased adoption is likely to spur further investments in training, cloud services, and data center infrastructure, all of which require more sophisticated and high-performance chips that only leading hardware providers can deliver, thereby creating a larger market for advanced processing units.
The positive surprises delivered by NVIDIA Corporation (NASDAQ:NVDA) have no end in sight, as the company is still finding ways to innovate, niches to expand, and partnerships to forge. As an example, the company is advancing healthcare through AI and accelerated computing, powering AI compute clusters and high-performance computing systems for cloud hyperscalers and healthcare markets. The company announced several strategic partnerships, including IQVIA for clinical trials acceleration, Arc Institute for biology foundation models development, and Illumina for advancing genomics analytics. NVIDIA’s healthcare business spans three major areas: digital health with AI agents for administrative tasks and patient experiences, digital biology representing a $300 billion opportunity in R&D and discovery, and digital devices for robotic medical applications. Furthermore, NVDA is leveraging physical AI capabilities through their three-computer trinity: real-time AI processing, AI development infrastructure, and Omniverse for physics-aware virtual worlds, particularly important for training medical robots and devices. To sum up, the growth opportunities of NVDA aren’t limited by data center demand for GPUs and the potential slowdown in Big Tech Capex appetite; NVIDIA Corporation (NASDAQ:NVDA) is rather creating completely new niches and constantly expanding its total addressable market, which leads to never-ending positive surprises over the analysts’ consensus expectations.
1. AppLovin Corporation (NASDAQ:APP)
Magnitude of revision in street 2026 EPS estimates: +130%
Number of Hedge Fund Holders: 51
AppLovin Corporation (NASDAQ:APP) is a leading mobile technology and advertising platform that leverages AI to optimize user acquisition, ad placement, and revenue generation across its expansive ecosystem of apps and marketing solutions.
The disruptive entrance of low-cost, high-performance AI models could compel AppLovin Corporation (NASDAQ:APP) to upgrade its AI algorithms for targeting and personalization to maintain a competitive edge, while simultaneously reducing operational costs associated with ad optimization and campaign analytics. Furthermore, as rivals adopt these more affordable AI advancements, the company might face intensified competition in the ad tech space, but if it successfully integrates these cutting-edge solutions, it could enhance its platform’s effectiveness, leading to improved user engagement and higher returns for its advertisers. The strong momentum in earnings growth expectations highlights the management’s success in positioning the company to navigate the current rapidly changing market – both gaming and advertising businesses are booming, with EBITDA growing 78% in 4Q alone and the gaming platform surpassing 1 billion users daily, something that is comparable to the largest social platforms in the world.
Looking forward, AppLovin Corporation (NASDAQ:APP) is focusing on developing automated tools to allow countless new businesses to tap into their platform, as current systems lack the full self-service capabilities needed to handle growth at scale. The company demonstrated that its platform success isn’t limited to direct-to-consumer brands, with early pilots showing positive outcomes for a range of advertisers across various verticals.
Overall AppLovin Corporation (NASDAQ:APP) ranks first on our list of the hot AI stocks to buy now. While we acknowledge the potential of APP 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 timeframe. If you are looking for an AI stock that is more promising than APP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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