This article looks at the 10 stocks that will profit from AI.
Artificial Intelligence (AI) is no longer a concept of the future but a real economic force influencing markets. By transforming corporate processes and enhancing manufacturing, AI is leading the way for efficiency, innovation, and profitability. The first-movers in this space who are developing, enabling, or adopting AI technologies are positioned to capitalize on a fast-growing economy.
AI has been quick to capture the markets and revolutionize industries. According to McKinsey’s 2024 Global AI Survey, the use of generative AI has skyrocketed. Now, 50% of businesses are leveraging its capabilities—a jump from just 33% in 2023. AI integration across business functions has also surged, with 72% of companies now deploying AI in at least one area. This surge is not just attributable to automation but also to redesigning workflows, enhancing productivity, and redefining the way industries function. The latest McKinsey Global Survey on AI showed that organizations are implementing strategies to boost their bottom line, redesigning workflows for generative AI deployment, and appointing senior leaders to oversee AI governance. Larger enterprises, particularly those exceeding $500 million in annual revenue, are leading the way, pivoting faster than their smaller counterparts in adapting to AI-driven efficiencies.
According to industry forecasts, the generative AI market is projected to expand from $40 billion in 2022 to a staggering $1.3 trillion by 2032. Thomson Reuters further reported AI’s impact on productivity, predicting that professionals could save up to 12 hours per week by 2029, owing to AI-powered automation. As AI continues to evolve, its influence is spanning across industries from finance to healthcare, making it an essential factor in investment strategies.
Big tech is doubling down on AI investments. One of the two major tech gaints has earmarked $80 billion for AI initiatives this fiscal year, while another one has committed up to $65 billion, demonstrating their long-term faith in AI’s profitability. Meanwhile, a major e-commerce and cloud services provider is making a bold move with a $53 billion investment in cloud computing and AI infrastructure over the next three years, surpassing its AI expenditures from the past decade. Gartner’s 2024 survey underscores AI’s expanding footprint, revealing that finance AI adoption has risen dramatically, with 58% of finance functions now utilizing AI—up 21 percentage points from 2023.
As AI continues to drive fundamental shifts in business operations and market strategies, investors must react with agile investment strategies. The AI landscape is no longer restricted to tech giants, but a broad spectrum of industries and companies are increasingly adopting AI into their core strategies. The next section looks at the ten best AI stocks that can capitalize on this AI revolution.
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Our Methodology
For this list, we identify the stocks that will profit from AI by classifying them as AI Enablers (companies operating in developing AI models, chips, and cloud infrastructure) or AI Adopters (companies that are leveraging AI for efficiency and innovation). Stocks are filtered using AI-specific metrics across sectors like semiconductors, cloud computing, healthcare, and financial services. We have then ranked them according to their growth estimates for 2025 and hedge fund sentiments. We have used Insider Monkey’s Q4 2024 exclusive proprietary database of hedge funds to arrive at our rankings.
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. BlackSky Technology Inc. (NYSE:BKSY)
EPS next year: 36.75%
Number of Hedge Fund Holders: 10
BlackSky Technology Inc. (NYSE:BKSY) is a space-based intelligence firm that provides real-time geospatial insights via its proprietary satellite constellation and the BlackSky Spectra analytics platform. Its services support various sectors, including national security, supply chain intelligence, crisis management, and critical infrastructure monitoring. This positions it as one of the best AI stocks to consider for investment.
In Q4 2024, BlackSky Technology Inc. (NYSE:BKSY) reported revenue of $30.4 million. Imagery and software analytics contributed $17.5 million, driven by rising demand for real-time geospatial intelligence. Revenue from professional and engineering services totaled $12.9 million, marking a decline from the previous year due to the completion of key project milestones.
Despite a net loss of $19.2 million in Q4 2024, BlackSky Technology Inc. (NYSE:BKSY) achieved an adjusted EBITDA of $7.4 million, indicating improved operational efficiency. Analyst sentiment remains optimistic, with a consensus 12-month price target averaging $17.50, suggesting a potential upside of 88.58% from current trading levels, as of 25th March.
BlackSky Technology Inc. (NYSE:BKSY) has introduced AI-powered analytics using ultra-high-resolution imagery from its first Gen-3 satellite, which was launched on February 18. This milestone showcases BlackSky’s advanced AI algorithms, which rapidly convert detailed satellite data into actionable intelligence.
9. Navitas Semiconductor Corporation (NASDAQ:NVTS)
EPS next year: 54.25%
Number of Hedge Fund Holders: 13
Navitas Semiconductor Corporation (NASDAQ:NVTS) designs and markets advanced power semiconductors, focusing on gallium nitride (GaN) power integrated circuits (ICs) and silicon carbide (SiC) power devices. These technologies are widely used across various applications, including mobile fast chargers, data centers, electric vehicles (EVs), and renewable energy systems, to enhance energy efficiency and power density.
In Q4 2024, Navitas Semiconductor Corporation (NASDAQ:NVTS) reported a significant milestone with GaN revenue increasing over 50% to reach a record high. The company also achieved design wins totaling $450 million, with the most substantial growth observed in the data center and EV sectors. Total revenue increased by 4.84% since last year.
Navitas Semiconductor Corporation (NASDAQ:NVTS) showcased its advanced GaN and SiC technologies at the Applied Power Electronics Conference (APEC) 2025. The company introduced the world’s first 8.5 kW AI data center power supply, achieving 98% efficiency.
As of March 25, 2025, Navitas’ stock price stands at $2.26, reflecting a market capitalization of approximately $444 million. As of December 31, 2024, Navitas Semiconductor Corporation (NASDAQ:NVTS) has $86.7 million in cash and cash equivalents.
The average price target from 9 analyst ratings stands at $4.00, with 67% of analysts giving a “Buy” rating. This suggests a strong upside potential of 76.99%. The company’s growth estimate for the next year is projected at 53.37%.
8. Tempus AI, Inc. (NASDAQ:TEM)
EPS next year: 133.41%
Number of Hedge Fund Holders: 17
Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology company that leverages artificial intelligence to advance precision medicine and patient care. Its offerings include next-generation sequencing diagnostics and polymerase chain reaction testing, serving healthcare providers, pharmaceutical companies, and researchers.
In Q4 2024, Tempus AI, Inc. (NASDAQ:TEM) reported a 35.8% year-over-year revenue increase to $200.7 million, with genomics revenue growing by 30.6% and data and services revenue by 44.6%. Gross profit rose by 49.7% to $122.1 million, and the company reduced its net loss to $13.0 million from $50.5 million in the same quarter the previous year. Adjusted EBITDA improved to a loss of $7.8 million compared to a loss of $35.1 million in Q4 2023.
In February 2025, Tempus AI, Inc. (NASDAQ:TEM) completed the acquisition of Ambry Genetics, enhancing its capabilities in genetic testing and data services.
Tempus’s stock has experienced significant volatility in 2025. After soaring 108% earlier in the year, shares declined by 15.1% to $59.10 following concerns about long-term growth prospects. Despite this, the stock remains approximately 45% above its initial public offering price since June, which makes it one of the best AI stocks to invest in.
Analyst consensus rates Tempus AI, Inc. (NASDAQ:TEM) as “Overweight,” with an average target price of $63.70 as of 25 March. The company’s full-year 2025 revenue guidance stands at $1.24 billion, including contributions from Ambry Genetics.
7. SoundHound AI, Inc. (NASDAQ:SOUN)
EPS next year: 24.52%
Number of Hedge Fund Holders: 21
SoundHound AI, Inc. (NASDAQ:SOUN) is a leading innovator in voice artificial intelligence, offering a proprietary platform that enables businesses across various industries—including automotive, hospitality, and consumer electronics—to integrate conversational AI into their products and services.
In Q4 2024, SoundHound AI, Inc. (NASDAQ:SOUN) reported a significant 101% year-over-year revenue increase, reaching $34.5 million. The annual revenue reached $84.7 million, marking an 85% growth compared to the previous year. SoundHound AI, Inc. (NASDAQ:SOUN) has raised its 2025 revenue outlook to a range of $157 million to $177 million, looking at a projected growth of approximately 97%.
SoundHound’s technology has been adopted by notable clients such as Hyundai, Kia, Vizio, and major restaurant chains like Chipotle and Panda Express. Additionally, SoundHound AI, Inc. (NASDAQ:SOUN) is at the forefront of the Agentic AI revolution, leveraging its proven platform and strong market position to deliver next-generation agentic capabilities.
Analysts have responded positively to SoundHound AI, Inc. (NASDAQ:SOUN)’s performance and prospects. On 13th March, Wedbush Securities analyst Daniel Ives reiterated an “Outperform” rating with a price target of $22, citing the company’s strong positioning and expanding market. Despite a recent 28% stock price decline following Nvidia’s divestment of its stake in the company, its long-term growth prospects remain promising.
6. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
EPS next year: 38.06%
Number of Hedge Fund Holders: 21
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) designs AI-powered autonomous systems and combat drones, placing itself at the forefront of AI-driven military innovation and modernization. Headquartered in San Diego, California, Kratos offers a range of products and services, including directed-energy weapons, unmanned aerial systems, and satellite communications.
In March 2025, Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) commenced construction of a $50 million state-of-the-art hypersonic laboratory in Crane, Indiana. This facility is dedicated to advancing hypersonic system payload integration and testing capabilities, underscoring the company’s commitment to cutting-edge defense technologies. The company’s stock has appreciated by approximately 20% year-to-date, with a nearly 80% gain over the past 12 months, which makes it one of the best AI stocks.
Recently, Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) successfully launched its second Erinyes hypersonic test vehicle, reinforcing its leadership in hypersonic research.
In March 2025, Kratos was added to the S&P SmallCap index, reflecting its growing market presence. Analysts maintain a positive outlook on the stock, citing its strategic investments in hypersonic technologies and unmanned systems.
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) has 13 analyst ratings, with 69% recommending a Buy. The growth estimate for the next year is projected at 43.99%.
5. Wolfspeed, Inc. (NYSE:WOLF)
EPS next year: 35.38%
Number of Hedge Fund Holders: 27
Wolfspeed, Inc. (NYSE:WOLF) is a leading innovator in wide bandgap semiconductors, focusing on silicon carbide (SiC) and gallium nitride (GaN) technologies. These advanced materials are integral to high-performance applications such as electric vehicles (EVs), renewable energy systems, and fast-charging infrastructures.
In January 2025, Wolfspeed, Inc. (NYSE:WOLF) introduced its Gen 4 MOSFET technology platform, designed to enhance system efficiency and durability in high-power applications. This platform offers significant performance improvements for designers in the automotive, industrial, and renewable energy sectors.
Wolfspeed, Inc. (NYSE:WOLF) reported second-quarter fiscal year 2025 revenue of $180.5 million, slightly surpassing analyst expectations. The Mohawk Valley manufacturing facility contributed approximately $52 million to this revenue. Despite a net loss of $372.2 million for the quarter, the company is implementing operational transitions aimed at enhancing profitability.
Wolfspeed’s stock experienced a one-month gain of 12.82%, as of March 26, attributed to a strategic partnership with a leading automaker for the supply of SiC components. Wolfspeed, Inc. (NYSE:WOLF) targets third-quarter fiscal 2025 revenue between $170 million and $200 million. The company’s ongoing investments in manufacturing capacity and technological innovation aim to meet the growing demand for SiC solutions.
Analyst ratings are mixed, with 50% recommending Hold. The average price target from 18 analysts is $9.07 as of 25th March. Growth is projected at 33.45% next year.
4. TeraWulf Inc. (NASDAQ:WULF)
EPS next year: 1400.42%
Number of Hedge Fund Holders: 43
TeraWulf Inc. (NASDAQ:WULF) develops sustainable computing infrastructure for AI applications, leveraging renewable energy and optimizing operational efficiency. The U.S.-based energy infrastructure company specializes in developing and operating fully integrated, environmentally sustainable facilities for Bitcoin mining and high-performance computing (HPC) applications. The company utilizes zero-carbon energy sources to produce domestically mined Bitcoin with a minimal environmental footprint.
In December 2024, TeraWulf Inc. (NASDAQ:WULF) reported an operational Bitcoin mining capacity of 195 megawatts (MW) and an installed self-mining hash rate of approximately 9.7 exahashes per second (EH/s), marking a 94% year-over-year increase. The company self-mined 158 Bitcoin during the month, achieving an average daily production rate of about 5.1 Bitcoin. Expanding into the HPC hosting sector, TeraWulf signed long-term data center lease agreements with Core42 in December 2024.
TeraWulf Inc. (NASDAQ:WULF) has announced a notable increase in non-GAAP adjusted EBITDA, which climbed to $60.4 million in 2024, compared to $31.9 million the previous year.
Analysts have maintained a consensus “Buy” rating for the stock, as of March 25th. The one-year median price target indicates a potential upside of 184.43% from the current price.
3. Intel Corporation (NASDAQ:INTC)
EPS next year: 134.54%
Number of Hedge Fund Holders: 83
Intel Corporation (NASDAQ:INTC) is a leading global designer and manufacturer of computer components and related products, including microprocessors, chipsets, embedded processors, and systems management software. With a notable market share in the Semiconductor & Circuit Manufacturing industry, Intel accounted for an estimated 13.6% of total industry revenue in the US.
Intel Corporation (NASDAQ:INTC) reported a fourth-quarter 2024 revenue of $14.3 billion, a 7% decline year-over-year, and a full-year revenue of $53.1 billion, down 2% from the previous year. Despite these challenges, the company secured significant contracts, including a multi-billion dollar deal to manufacture chips for Amazon and up to $3 billion from the US government for military chip production. The company reported $53.1 billion in total revenue for the year, while the EBITDA was at $7.53 billion.
In March 2025, Intel Corporation (NASDAQ:INTC) introduced Intel Edge Systems, Edge AI Suites, and the Open Edge Platform to accelerate AI adoption in industries such as retail, manufacturing, smart cities, and media. Analysts project Intel’s revenue to grow at 7.13% annually, with a return on equity expected to reach 8.9% within three years. Among 45 analyst ratings, 84% gave a Hold rating to the stock, reflecting cautious optimism about Intel’s future performance and AI-driven growth strategy.
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
EPS next year: 32.65%
Number of Hedge Fund Holders: 96
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company specializing in high-performance computing, graphics, and visualization technologies. Its diverse product portfolio includes microprocessors, embedded processors, chipsets, graphics, and multimedia products, catering to various sectors such as data centers, gaming, and embedded systems.
In the fourth quarter of 2024, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported a record revenue of $7.7 billion, a 24% increase year-over-year, with a gross margin of 51%. The Data Center segment was particularly strong, with annual revenue nearly doubling due to accelerated adoption of EPYC processors and over $5 billion in AMD Instinct accelerator revenue.
Recently, with reports that President Donald Trump may postpone the scheduled April 2 tariffs on the semiconductor industry, the company’s stock surged to $113.85. This marks a 6.96% increase in a single trading session, as of March 25th.
Advanced Micro Devices, Inc. (NASDAQ:AMD) enters 2025 with a strong innovation pipeline. Its Ryzen AI processors, optimized for Microsoft’s Copilot AI assistant, could boost growth in the client segment. With a projected growth rate of 33.76% and 69% of 55 analysts rating it a “Buy,” AMD is one of the best AI stocks to invest in.
1. Tesla, Inc. (NASDAQ:TSLA)
EPS next year: 36.83%
Number of Hedge Fund Holders: 126
Tesla, Inc. (NASDAQ:TSLA) is a leading innovator in the electric vehicle (EV) and sustainable energy sectors. In January 2025, the company unveiled a redesigned Model Y in China, featuring a full-width light bar for daytime running lights and taillights, an additional touchscreen for rear passengers, and an extended range of 719 km for the long-range version.
Tesla’s stock has experienced volatility in 2025, with shares declining over 40% year-to-date, facing serious competition from Chinese carmaker BYD. In Q4 2024, Tesla, Inc. (NASDAQ:TSLA) has faced some headwinds, with sales declining in the European market by 49%. BYD continued to gain traction, reaching a $107 billion revenue for the year.
Tesla, Inc. (NASDAQ:TSLA) has retaliated with key strategic moves in multiple areas. The company announced the launch of a more affordable $25,000 EV aimed at broadening market accessibility. Plans for the initial robotaxi rollout in select U.S. cities will also strengthen market presence in autonomous vehicle technology. On March 24th, Tesla announced that it will introduce Full Self-Driving (FSD) in China once regulatory approvals for over-the-air software updates are secured. The news sparked a nearly 12% rally in Tesla’s stock.
However, prominent investors such as Cathie Wood of Ark Invest remain optimistic. Wood maintains a five-year price target of $2,600, citing Tesla’s potential growth in new models and autonomous ride-sharing ventures. Analyst sentiment remains relatively strong, with 51% of 57 analysts still recommending a Buy.
Overall, Tesla, Inc. (NASDAQ:TSLA) ranks first among the best AI stocks. While we acknowledge the potential of TSLA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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