In this article, we discuss the 16 trending AI stocks on latest analyst ratings and news.
In recent months, the AI industry has been presenting explosive opportunities in the development and deployment of AI infrastructure. Companies that provide AI chips, cloud services, and data storage solutions are poised to benefit from the growing demand for AI capabilities. For example, NVIDIA, a leading provider of AI chips, has seen the shares rally by 160% in 2024, driven by the increasing need for powerful processing capabilities in AI applications. Similarly, cloud service providers like Amazon Web Services and Microsoft Azure are seeing a surge in demand for their AI and machine learning services, making them attractive options for investors.
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.
However, in this buzz around the new tech, investors should also stop and consider some of the risks and challenges associated with AI. Regulatory scrutiny on AI firms is intensifying, particularly around issues of data privacy, algorithmic bias, and the ethical use of AI. Governments worldwide are beginning to implement regulations that could impact how AI technologies are developed and deployed. For instance, the European Union has proposed an AI Act that seeks to create a regulatory framework that addresses the risks associated with AI while promoting innovation. This regulatory environment could lead to increased compliance costs and slower adoption rates in certain sectors, posing a potential risk for investors.
Another critical consideration for investors is the talent shortage in the AI industry. The demand for skilled AI professionals far outstrips supply, leading to fierce competition among companies for top talent. This talent gap could slow down the development and deployment of AI technologies, particularly in smaller companies that may not have the resources to compete with tech giants like Google and Microsoft for talent. Despite these challenges, the overall outlook for the AI industry remains highly positive. The continuous advancements in AI technologies, coupled with their increasing integration into various sectors, provide a strong foundation for future growth.
Read more about these developments by accessing Billionaire Stan Druckenmiller Is Betting On AI Infrastructure, Tobacco and Industrial Stocks and 10 Tech Stocks to Monitor Amid Market Volatility According to Bernstein Analyst.
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).
A businessperson contemplating modern technology while using the BrandGraph Platform.
Trending AI Stocks on Latest Analyst Ratings and News
16. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. Media reports indicate that a member of the board of directors of the firm left their position earlier this month over concerns about a revival plan that was moving too slowly. Per the reports, the member was frustrated with the progress on AI strategy and the large workforce, when compared to competitors. Earlier this month, the company had announced that it was cutting 15% of the 125,000 strong-workforce and suspended dividend in an effort to cut spending and streamline the company. For comparisons, Intel rivals like NVIDIA and AMD, both of whom have more compelling AI growth stories, have around 30,000 to 40,000 employees.
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.
15. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 78
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. The company recently revealed that it would be purchasing 4G Internet of Things technologies from Sequans Communications, including certain employees, assets and licenses. The acquisition aims to bolster the Industrial IoT portfolio of the chipmaker, offering low-power solutions for reliable and optimized cellular connectivity for IoT applications. Paris-based Sequans — which develops cellular semiconductor solutions for IoT markets — will retain license of the 4G IoT technology for ongoing use and will continue to serve IoT markets.
QUALCOMM Incorporated (NASDAQ:QCOM) is attracting the attention of analysts on Wall Street. Rosenblatt recently raised the price target on the shares to $250 from $240 and kept a Buy rating, noting that the company was taking market share in premium Android handsets, Automotive cockpit, and the PC and the next phase of AI growth was at the network edge, where the company was well positioned.
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, one of the most prominent in the chip space, has historically performed better than peers in terms of financials. Over the past decade, the revenue of the company has increased by nearly 350%. Consensus revenue estimates suggest continued growth for this metric, with revenue projected to increase from around $27 billion in fiscal 2024 to over $37 billion in fiscal 2028. There is plenty of potential for further acceleration due to the AI revolution.
Applied Materials, Inc. (NASDAQ:AMAT) is one of the most followed stocks on Wall Street. JPMorgan analyst Harlan Sur recently raised the price target on the shares to $250 from $240 and kept an Overweight rating, noting that the company reported solid July quarter results driven by accelerating demand in advanced foundry/logic, DRAM, high bandwidth memory and ICAPs combined with sustained strength in services. The analyst further added that the company was well positioned to benefit from multiple upcoming technology inflections that should drive continued outperformance versus wafer fab equipment over the next several years.
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 stock has rallied this year due to increased demand for data center infrastructure components, even surpassing the performance of AI powerhouse NVIDIA. The success of the firm in this area is related to the full stack of supply chain and manufacturing services it offers to clients, some of which are Meta Platforms and Amazon. The valuation of the stock indicates strong upside potential. The stock has a 20x forward P/E, and the valuation points to at least 26% upside from current levels.
Celestica Inc. (NYSE:CLS) is attracting bull calls from Wall Street. Canaccord analyst Robert Young recently raised the price target on the stock to $70 from $53 and kept a Buy rating, noting that the company reported another strong quarter with Q2 results ahead of consensus on all metrics. The analyst added that in addition to a strong Q3 outlook, guidance for the next fiscal year was raised across the board.
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. The company is spending upwards of $30 billion on AI-related capex this year. For investors who follow the firm, this kind of spending is historically associated with higher growth opportunities for the chip maker in the following years. In the coming months, the firm expects strong AI-related demand underpinned by the industry megatrend of AI, HPC, and 5G. The AI chips being made by the firm are being used on devices made by leading firms like Apple and Samsung.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Wall Street darling. JPMorgan recently raised the price target on the stock to NT$1,200 from NT$1,080 and kept an Overweight rating, highlighting that the company was now firmly on course to improve margins in the next few years, with continued strong demand for artificial intelligence acting as an accelerator.
11. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. Earlier this week, reports in the media indicated that the company was reportedly buying a pair of factories owned by Taiwanese company AUO in a deal that could be worth up to $620 million. The facilities would be used to expand the integrated circuit packaging and testing services for the company, along with increased production of high bandwidth memory. The move comes as AI capex rises in light of increasing demand for AI data centers. These AI data centers use the memory and storage products marketed by Micron.
Micron Technology (NASDAQ:MU) is being viewed with caution on Wall Street. Needham has a Buy rating on the shares with a price target of $140. In a recent investor note, the advisory noted that the bit shipment commentary offered by the firm in the latest earnings call was incrementally more cautious than guidance given on the previous earnings call, creating a risk to November-quarter consensus estimates.
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. As the AI wave sweeps the market, investors are finding it hard to find growth firms with a financially sound historical record. Arm Holdings ticks a lot of boxes for AI investors who want solidity. It has a high historical revenue growth rate of 18% and analysts expect this growth to accelerate moving forward to 22% annually. These numbers are supported by strong license and royalty revenue, as well as increasing adoption of the chip architecture of the firm that competes on cost and energy efficiency.
Arm Holdings plc (NASDAQ:ARM) is thus turning heads on Wall Street. Daiwa recently upgraded the stock to Outperform from Neutral with a $130 price target, noting that following a few interesting and volatile quarters, the bad news of a possible recession was out and tech was settling post the big recent selloff, though AI expectations were still strong. The analyst expected Arm shares to trend further upwards in the next few months.
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. The shares have been on an upward trend this year, rising more than 120% year-to-date, comfortably beating the performance of the benchmark S&P 500 by nearly 100%. The second quarter earnings of the firm were strong and showed sustainable growth. This growth is driven by AI-enabled advanced data integration and analytics platforms. These cater to government and commercial sectors. With these platforms, the firm has been gaining traction among enterprise investors, both public and private.
Analysts on Wall Street have noticed the new developments regarding Palantir Technologies Inc. (NYSE:PLTR). Northland recently initiated coverage of the stock with a Market Perform rating and $35 price target, noting that the artificial intelligence operating system of the firm, powered by the Ontology software, had overcome 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 company, as part of a larger effort to kickstart AI marketing, recently announced several AI-enabled tools for VMware, a cloud computing firm bought by Broadcom in a deal close to $70 billion last year. The tools cater to the edge computing market, a rapidly growing space within the AI universe that will be worth nearly $232 billion this year. Sanjay Uppal, an executive of the chipmaker, said during the launch that the tools uniquely offered enterprises a good, better, best approach to connectivity at the edge by allowing them to tweak real-time WAN performance, gain insights from the network, and program the network.
The AI buzz around Broadcom Inc. (NASDAQ:AVGO) has reached Wall Street as well. TD Cowen recently raised the price target on the shares to $210 from $175 and kept a Buy rating, noting that the stock offered broad revenue exposure to hyperscale, artificial intelligence, telecom, and enterprise, with investors willing to pay a premium for a unique quality semis/software franchise with industry-leading margin.
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. It has an impressive list of nuclear energy assets. These assets are likely to be key sources of power for AI data centers since tech giants are exploring sustainable energy solutions to please ESG investors. Last month, the company revealed that authorities had approved a request to extend the operation of the 2,400 MW Comanche Peak nuclear power plant in Texas for an additional 20 years beyond the original licenses. Four out of five nuclear plants run by the firm have received license extensions in recent months. These four plants have the capacity to generate more than 6,500 MW of emission-free energy.
The nuclear profile is just one of the many reasons to be bullish on Vistra Corp. (NYSE:VST) stock in the long term. Seaport Research analyst Angie Storozynski recently raised the price target on the shares to $116 from $110 and kept a Buy rating, noting that even after a price rally this year, the firm 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 company has become a market leader in the Direct Liquid Cooling (DLC) solutions space. These DLC solutions are used by tech giants and chip firms to manage heat flow in high-end chips that get hot while running complex AI computations. The company claims it has captured 70% to 80% of the DLC market and aims to scale these solutions quickly as AI capex touches record highs. Concerns around production delays for Blackwell, the latest NVIDIA chip, could hamper DLC orders as well in the short term, according to market experts.
This bearish view on Super Micro Computer, Inc. (NASDAQ:SMCI) is endorsed by Wall Street. Bank of America analyst Ruplu Bhattacharya recently downgraded the stock to Neutral from Buy with a price target of $700, down from $1,090. The analyst noted that the next several quarters remained challenging for the company in terms of margins, largely due to a competitive pricing environment, delayed shipment of Blackwell GPU systems that require higher margin liquid cooled racks, and on-going issues with component availability.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 165
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. Even with notable investments in AI infrastructure, as well as the rollout of multiple AI features for Google customers, the company has still managed to top analyst estimates on earnings. In the first half of the year, the firm posted 14% growth in revenue on a year-on-year basis. The cloud segment of the tech giant achieved 29% revenue growth and 11% profit margins during the time. The company has previously announced that it would be spending nearly $50 billion in capital expenditures for the year, a large chunk of which is expected to go towards AI-focused product offerings and data centers.
Following the second quarter earnings report, Alphabet Inc. (NASDAQ:GOOG) received bullish calls from Wall Street. Stifel analyst Mark Kelley raised the price target on the stock to $199 from $196 and kept a Buy rating, detailing that the company reported revenue and operating income ahead of expectations with continued strength in Search and a slight beat in Google Cloud, though YouTube growth slowed relative to Q1. The analyst further added that the AI commentary of the management was encouraging.
4. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. Unlike other tech giants who are spending big on AI and have little monetization to show for their investments, Meta has been able to deliver on important metrics like ad impressions and price per ad, both of which have grown 10% year-on-year in the second quarter compared to the previous year, following the deployment of AI tools. This translates into earnings as well. The consensus EPS estimate for 2025 and 2026 forecasts EPS growth of close to 15% for Meta Platforms.
This AI monetization by Meta Platforms, Inc. (NASDAQ:META) has been appreciated by analysts on Wall Street. Tigress Financial recently raised the price target on the stock to $645 from $575 and kept a Strong Buy rating, noting that the increasing cash flow of the firm was enabling ongoing investments in artificial intelligence initiatives that drive increasing user engagement, better content, and a more effective advertising experience.
3. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. Investor concerns around the stock have been mounting in the past few weeks, mainly due to weaker-than-expected revenue growth projections and continued high spending, mostly on AI and cloud infrastructure. The forward guidance on revenue fell short of Wall Street estimates in the latest quarter despite a 12% rise in total sales and higher-than-expected profits for the second quarter. This has led to concerns about slower growth in the coming quarters. The significant capital expenditures, in part on the development of AI capabilities, have also raised worries about the impact on short-term profitability.
Perhaps these are some of the reasons why Wells Fargo recently lowered the price target on Amazon.com, Inc. (NASDAQ:AMZN) stock to $225 from $232 and kept an Overweight rating. In an investor note, the advisory noted that heavy upfront costs related to satellite launches, commencing in the second half of 2024, reduce operating income forecasts for Amazon from 2025 through 2027. The note further detailed that Kuiper presented an attractive opportunity longer term for Amazon, but also unclear synergy with core operations.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. The stock has been hit in recent weeks after legendary investor Warren Buffett reduced his holdings in the company significantly during the second quarter of 2024. However, even as some take flight, others have been doubling down on their bets. For example, Third Point, a New York-based hedge fund led by Dan Loeb, recently revealed that it had bought nearly 550,000 shares in the tech giant. Loeb, in a letter to investors, highlighted his bullish views on the company in the field of artificial intelligence. Apple introduced Apple Intelligence earlier this year, a suite of software products designed to make Apple devices like iPhones AI capable.
Loeb underlined that Apple Inc. (NASDAQ:AAPL) would drive meaningful new demand within the installed base with the release of AI features, resulting in accelerating revenue growth on two fronts. He detailed that iPhone revenue was going to see a marked improvement because Apple Intelligence features would not be backwards-compatible with existing iPhone models, creating the conditions for a forced upgrade cycle. Furthermore, per Loeb, the App Store was likely to become the primary distribution platform for most new consumer-focused AI apps.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. There has been lots of chatter around the second quarter earnings report of the firm in recent days, more so because of delays in the production of the new Blackwell chips that the firm is marketing as a game changer for AI data centers. However, experts in the chip domain have dismissed concerns around this hiccup, noting that demand for the H200 will more than make up for any delays in Blackwell production. NVIDIA claims that Blackwell shipping will begin at the back end of this year and accelerate in the first quarter of 2025.
Wall Street analysts have been monitoring NVIDIA Corporation (NASDAQ:NVDA) closely ahead of the release of the second quarter earnings. Morgan Stanley has an Overweight rating on the shares with a price target of $144. In a recent investor note, analyst Joseph Moore detailed that the advisory expected initial volumes of Blackwell in the October quarter, as the initial product was functional but with somewhat lower yields, and still expected a volume ramp of the next revision of silicon through January – all of which was still within the broad brush strokes of guidance.
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that some 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 NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 13 High Growth Semiconductor Stocks That Are Profitable in 2024 and the 11 Best AI Penny Stocks to Invest in Now.
