In this article, we discuss the 15 trending AI stocks on latest analyst ratings and news.
The AI industry has been experiencing explosive growth, making it a highly attractive sector for potential investors. According to a report by Bloomberg Intelligence, the global generative AI market was valued at approximately $40 billion in 2022, just before the launch of ChatGPT, and is now expected to expand at a compound annual growth rate of more than 40% to reach over $1.3 trillion in size within the next decade. This growth is fueled by the rapid adoption of AI technologies across various industries, including healthcare, finance, retail, and manufacturing, where AI is being leveraged to enhance efficiency, reduce costs, and create new revenue streams. For instance, in healthcare, AI-driven diagnostics and personalized medicine are revolutionizing patient care, leading to more accurate and timely treatments. The finance sector is also reaping the benefits of AI through advanced algorithms for fraud detection, risk management, and personalized banking services.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
The AI market is not just expanding in terms of applications but also geographically. North America has been a dominant force in AI development, with companies like Google, Microsoft, and Amazon leading the charge. However, Asia-Pacific, particularly China, is rapidly catching up, driven by significant investments and a robust government push toward AI adoption. The Chinese government has an ambitious AI plan aimed to make the country a global leader in AI by 2030, with projections that the AI industry of China could reach $150 billion in size by then. This geographical diversification is crucial for investors looking to tap into different markets and reduce their risk exposure.
Investors should also consider the substantial investments being made in AI startups, which are critical drivers of innovation. According to CB Insights, AI startups raised over $66 billion in funding in 2022, marking a record year despite broader economic uncertainties. This trend is expected to continue as more venture capital firms and corporate investors recognize the potential of AI to disrupt traditional industries. Furthermore, the integration of AI with other emerging technologies, such as the Internet of Things (IoT), 5G, and quantum computing, is likely to create new opportunities and markets, further driving growth.
Our Methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds. 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).
Trending AI Stocks on Latest Analyst Ratings and News
15. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. The company has been in the spotlight recently as it aims to make an entry into the AI market with heavy investments in chips manufacturing. However, this plan has hit a few roadblocks. Recent reports suggest that Japanese tech giant SoftBank has scrapped a deal to produce an artificial intelligence chip with Intel. The collapse of the deal, according to the report, was a result of the inability of the latter to meet the advanced chip requests of the former, specially in terms of volume and speed.
Investment advisory Bernstein has a Market Perform rating on Intel Corporation (NASDAQ:INTC) stock and recently lowered the price target to $25 from $35. In an investor note, the advisory noted that the Q2 results of the firm were challenged and Q3 outlook was awful as the company saw the second half of 2024 recovery more muted than prior expectations amid weaker macro and some client inventory channel adjustments.
14. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 77
Applied Materials, Inc. (NASDAQ:AMAT) provides equipment, services, and software for the semiconductor industry. The company is most famous for being a wafer fab equipment (WFE) supplier, a key piece of tech that enables the seamless manufacture of chips used in most modern devices. The AI boom has created explosive demand for these chips. In the WFE category, the firm has a diverse portfolio compared to peers like ASML and KLA Corp. The former specializes in lithography systems while the latter focuses on inspection and metrology equipment. Applied Materials, however, offers a range of WFE services, including Epitaxy, etching, deposition, ion implant, inspection and metrology, and hybrid bonding.
Investment advisors on Wall Street thus have bullish views on Applied Materials, Inc. (NASDAQ:AMAT) stock. For example, Stifel has a Buy rating on the shares with a price target of $270. In a recent note, the advisory noted that the Q3 results and outlook of the firm modestly exceeded consensus estimates, reflecting gradual growth in system and service revenue. The note further stated that the firm was well-positioned to grow at/above the industry in 2025 as the China exposure had been derisked.
13. Celestica Inc. (NYSE:CLS)
Number of Hedge Fund Holders: 38
Celestica Inc. (NYSE:CLS) offers a range of product manufacturing and related supply chain services. The connectivity and cloud solutions business of the firm, which comprises nearly 70% of the overall revenue, has helped the firm beat consensus expectations on revenue guidance for ten of the last eleven quarters. Even as this business is healthy and growing, AI data center spending has forced investors to look at the hardware platform solutions department. In this domain, the firm has many famous customers, like Google and Amazon. The firm markets 800G switches, a networking product that supports high throughput and low latency features necessary for handling large data transfers, to these customers.
In the second quarter earnings call, Celestica Inc. (NYSE:CLS) management highlighted the importance of this growth driver, revealing that there had been accelerated demand for networking products from hyperscale customers for this year and the next year. In the coming months, the company expects the market to now move towards distributed regional data centers due to power constraints, a move that would lead to a further increase in demand for networking products.
12. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. AI investors can take a lot of positives from the company. For example, it has a 28% market share in the foundry business, underscoring the importance of the firm as the AI boom drives the demand for high-end chips that need fabrication as part of their manufacturing process. The recent purchase of a manufacturing plant worth $530 million will double fab capacity by 2025. The firm also plans to spend close to $30 billion in capital expenditures this year, the majority of which is marked for investments in advanced technologies, highlighting the commitment it has to chip leadership in an AI world.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has received bullish calls from analysts on Wall Street in recent weeks. For example, investment advisory JPMorgan has an Overweight rating on the shares with a price target of NT$1,200. In a recent note, the advisory stated that TSM is now firmly on course to improving margins in the next few years in light of the market leading position with continued strong demand for artificial intelligence.
11. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. AI data center spending has created a large market for High Bandwidth Memory (HBM), one of the premier products of the firm. Micron has leapt ahead of competitors in this regard as the HBM3e chips it sells are 30% more efficient than others on the market. This number is important because AI data centers consume a lot of power and efficiency solutions are highly sought after in the industry. Micron, which launched these new chips earlier this year, has already sold production of these through 2025. This is driving investor interest in the company, pushing up prices as demand increases, and boosting margins for the chipmaker.
Micron Technology (NASDAQ:MU) has many famous customers, including AI leaders like Apple and NVIDIA. The latter uses the HBM3e chips in their H200 GPUs. These GPUs are likely to sell like hot cakes as production for Blackwell, the latest AI chips marketed by NVIDIA, is hit with delays. Demand for the DRAM, an AI data center essential and another Micron product, is also increasing. As firms like NVIDIA cross $3 trillion in valuation, with analysts forecasting it to cross the $10 trillion mark by 2030 keeping in mind the AI potential, smaller players like Micron have lots of room to grow in the coming years.
10. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers. The company has not been in the spotlight as much as it should have been in the past few months considering that it is perhaps the third-best performing semi stock in the AI world with a return of close to 90% year-to-date, behind only industry behemoths like NVIDIA and Taiwan Semiconductor Manufacturing Company. Arm Holdings virtually monopolizes the mobile market across the globe. It is trading at more than 33x forward revenue, a 40% premium to the 24x forward revenue multiple of NVIDIA.
Although not a darling of financial media, Arm Holdings plc (NASDAQ:ARM) nevertheless enjoys considerable attention on Wall Street. Investment advisory Daiwa recently upgraded the stock to Outperform from Neutral with a $130 price target, noting that the bad news of a possible recession was out and tech was settling post the big recent selloff, with AI expectations still strong but valuations still high.
9. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) builds and deploys software platforms for the intelligence community to assist in counterterrorism investigations and operations. There are a string of reasons to be bullish on the shares in the long term. The company recently announced that it would be making previously exclusive AI tools available on the Microsoft Azure system for government sectors, enabling it to leverage AI for high-value contracts. Furthermore, in earnings for the second quarter, the firm revealed that US commercial revenue grew 55% year-on-year, with an 83% increase in customers, reflecting strong AI sector growth. During the time, the company secured 96 deals in the US worth over $1 million, contributing to a 152% year-on-year increase in contract value.
Market experts have viewed Palantir Technologies Inc. (NYSE:PLTR) positively so far this year. Investment advisory Northland recently initiated coverage of the stock with a Market Perform rating and $35 price target. In an investor note, the advisory noted that the artificial intelligence operating system of the firm, powered by the Ontology software, had overcomes myriad roadblocks to adoption and was igniting AI use across the enterprise landscape.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. The stock has suffered in recent weeks due to the concerns over AI overvaluation and overinvestment. However, a closer look at the product portfolio of the chip firm reveals that it is much more diversified in the semi business compared to peers, with growth supported by tailwinds such as cybersecurity, connectivity, and data management solutions, in addition to artificial intelligence. The infrastructure solutions business of the company has been growing faster than semiconductor solutions in recent months, highlighting this diversification. This is illustrated by the fact that revenue from infrastructure solutions as a percentage of total revenue has increased from below 10% in 2018 to above 30% this year.
This optimism around Broadcom Inc. (NASDAQ:AVGO) is shared by analysts on Wall Street. Investment advisory Rosenblatt recently raised the price target on the stock to $2,400 from $1,650 and kept a Buy rating, noting that the firm rolled out fiscal 2026 estimates that support high-teens sales growth and $75 non-GAAP earnings per share, driven by continued artificial intelligence infrastructure networking momentum and improved synergies in enterprise software.
7. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 92
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. The shares of the firm have climbed more than 120% year-to-date, largely due to the rise in demand for power, growth in AI data center energy needs, and the purchase of Energy Harbor. The company seems in pole position to deliver clean and reliable energy for AI data centers given that it has a diversified energy portfolio, including nuclear assets. This growth ramp, rivaling that of technology stocks, comes despite concerns about grid strain and valuation but is offset by the strong financial performance, growth projections, and strategic positioning of the utility company.
This bullish view on Vistra Corp. (NYSE:VST) is backed by market experts on Wall Street. For instance, Seaport Research analyst Angie Storozynski has a Buy rating on the shares with a price target of $116. In an investor note, the analyst pointed out that even after the price rally this year, companies such as Vistra continued to trade at attractive double-digit free-cash-flow yields.
6. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 47
Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high performance server and storage solutions based on modular and open architecture. The stock has been hit hard in recent weeks as NVIDIA, one the premier customers of the firm, announced delays to the famous Blackwell chips. These chips, designed and produced for AI tasks, were to be used by tech giants in their data build, together with liquid-cooled AI rack servers marketed by Super Micro Computer. Although interest in rival Dell has increased due to the Blackwell situation, the deployment advantages and quick adoption of DLC server solutions by Super Micro have allowed it to scale capacity for the arrival of the latest chip. This is important given the CapEx committed by big tech and hyperscalers in their bid to maintain generative AI leadership.
Keeping in view the bigger picture, Barclays analyst George Wang recently lowered the price target on Super Micro Computer, Inc. (NASDAQ:SMCI) to $693 from $1,000 and kept an Overweight rating on the shares. In an investor note, the analyst pointed out that the company had delivered a strong revenue guide for fiscal 2025, indicating strong demand, though gross margin came in below estimates due to initial production costs on DLC racks and customer mix.