In this article, we discuss the 20 trending AI stocks on latest analyst ratings and news.
Artificial intelligence (AI) stocks have taken a beating over the past few days, merely weeks after a broader market selloff in the technology sector that shook the entire finance industry. Shares of several prominent AI companies like have all witnessed high single digit drops in the space of just 24 hours. The NVIDIA selloff has wiped nearly $300 billion off the market value of the company. The growth-heavy NASDAQ Composite has registered a more than 3% drop in a single day of trading. AI valuations are bloated, no doubt, and the recent bear market has erased nearly $1 trillion in value from AI firms in just a few hours.
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 concerns around top AI chipmaker stem from recent reports that authorities in the US are growing uneasy about the near monopoly of the firm in terms of GPU provision. The stock’s outperformance in this regard has delighted investors – the chipmaker is doing business with tech giants like Google, Amazon, Microsoft, and Meta – but it has invited the ire of the Justice Department. The department is speculated to be in the process of sending a subpoena to the company, binding the business to provide certain information, in relation to an antitrust case. The purchase of Run:ai, an Israeli firm specializing in GPU orchestration software, back in April is believed to be one of the bones of contention between the AI chipmaker and the government.
Macro developments are also weighing on the AI stocks in the near term. Commodity markets around the world are absorbing less than impressive growth numbers from China, impacting prices of copper and rare earths. Copper and rare earth metals are extensively used in AI devices, from chips to batteries. Lates US manufacturing data also paints a not so good picture for factories. According to authorities, US manufacturing witnessed a further decline in new orders and rise in inventory during August, even as manufacturing overall contracted at a modest pace. In addition to these factors, new investment notes on AI from JPMorgan and BlackRock, questioning the ROI on ballooning AI capex, have also grabbed media headlines.
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 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 technician in a server room of a corporate office surrounded by servers and networking equipment.
Trending AI Stocks on Latest Analyst Ratings and News
20. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 74
Marvell Technology, Inc. (NASDAQ:MRVL) makes and sells semiconductors. Latest reports indicate that Marvell is planning to buy Altera, the programmable chip unit of Intel, as the latter considers the possibility of selling it as part of a larger plan to cut costs amid mounting losses. Investment advisory Raymond James has noted that such a transaction could provide a modest benefit for Marvell. Srini Pajjuri, one of the analysts at the advisory, highlighted that from a strategic standpoint, a potential acquisition would help MRVL diversify into Industrial/Defense markets and beef up its already strong presence in Telco and Data Center markets. Pajjuri added that higher gross margins associated with FPGA products would also be attractive to MRVL, especially as Al custom silicon becomes a larger portion of its revenues.
Analysts at the advisory have, however, cautioned that such a deal involving Marvell Technology, Inc. (NASDAQ:MRVL) would likely require regulatory approval by China, which could prove problematic in the current geopolitical climate. The estimated market value of Altera is in the $18 billion to $22 billion range. Back in 2015, Intel had purchased Altera for around $16.5 billion. The chip unit had a revenue of nearly $3 billion in 2023.
19. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. The company counts many hyperscalers among customers. The chip orders from these companies have grown in the past few months as AI data center build takes off. Recently, the CEO of tech giant Microsoft praised the Instinct MI300X AI accelerators, one of the premier AI offerings of AMD, as the best price-to-performance AI chip on the market. This is important for the latter since the former has projected that it could sell up to 50 million AI-enabled personal computers in the coming months.
Lisa Su, the CEO of Advanced Micro Devices, Inc. (NASDAQ:AMD), said during the second quarter earnings call that the firm was continuing to accelerate the AI traction as leading cloud and enterprise providers expanded availability of Instinct MI300X solutions marketed by the firm. She added that there were positive demand signals for general-purpose compute in both the client and server processor businesses.
18. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 88
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. The company recently posted strong second quarter earnings, primarily driven by strong demand for AI-optimized servers. The server and networking revenue for the company climbed 80% year-on-year in the second quarter, driving top line performance. Amid growth in infrastructure solutions, the company also raised full-year guidance. Even as it posts accelerating growth numbers, the valuation of the stock remains one of the most attractive in the IT space, with a P/E Ratio barely touching 12.
Dell Technologies Inc. (NYSE:DELL) has attracted the attention of Wall Street analysts in recent weeks. Raymond James has an Outperform rating on the stock with a price target of $160. In an investor note, the advisory noted that following a fiscal Q2 beat and raise, strong AI shipments and improved ISG segment operating margin should outweigh flat AI backlog and a slightly lower PC forecast for Dell in the coming months.
17. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. Latest reports indicate that the contract manufacturing business of the firm may be in jeopardy after a series of tests conducted with chipmaker Broadcom failed. The latter had been testing the advanced 18A manufacturing process of the former. Back in 2021, Intel had started the contract manufacturing business as part of a broader turnaround strategy. Intel CEO Pat Gelsinger has previously said that Intel intends to be manufacturing-ready by the end of this year for its own chips and start high volume manufacturing for external customers in 2025. Gelsinger has also said that several customers were actively engaged with the 18A tool kit already.
Intel Corporation (NASDAQ:INTC) stock has nosedived in the past few weeks after reports claimed that Gelsinger and some other key executives were expected to table a plan to the board to cut unnecessary businesses and curtail capital spending. Some of the options on the table included splitting the foundry business and potentially scrapping factory projects. Wall Street analysts are bearish on the stock.
16. 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 has been making efforts to capture a larger portion of the personal computer (PC) market as the sales of AI PCs take off. In line with this strategy, it recently introduced the Snapdragon X Plus 8-core processor. The new chip would enable OEMs to offer AI features in PCs in the $700 to $900 range. Tech giant Microsoft also uses QCOM chips in their latest Surface PCs that come loaded with AI features. Other PC firms that will use QCOM chips in their new products include Acer, ASUS, Dell Technologies, HP, Lenovo, and Samsung, among others.
QUALCOMM Incorporated (NASDAQ:QCOM) claims that the new processor comes with 45 TOPS NPU of AI processing power and a CPU that enables fast responsiveness and efficiency, delivering 61% faster CPU performance. Cristiano Amon, the CEO of QCOM, said during the launch ceremony that the new chips would bring to more users transformative AI experiences, and the best-in-class performance as well as unprecedented battery life of power efficient custom Qualcomm Oryon CPU.
15. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 84
Lam Research Corporation (NASDAQ:LRCX) markets semiconductor processing equipment. As investors grow exasperated with the volatility in the chip sector, the company continues to hold onto a stable and diversified business profile. The firm has managed to achieve nine consecutive years of dividend growth in a sector where the median in this regard is just a little over one year. It also has nine consistent years of payouts, highlighting the stability of the financials in a volatile macro environment. It recently declared a quarterly dividend of $2.30 per share, an increase of nearly 15% from the previous dividend of $2. The forward yield was 1.15%. The firm markets wafer fab equipment to leading chipmakers around the world.
Lam Research Corporation (NASDAQ:LRCX) has earned bullish reviews from Wall Street. Citi has a Buy rating on the stock with a price target of $990. In a recent investor note, the advisory reduced semiconductor equipment estimates following the capex cut at Intel. Citi also de-risked $1 billion of wafer fab equipment contribution from the potential China high bandwidth memory ban. The advisory expects the group to remain volatile through the US elections.
14. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 81
ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. It is one of the best tech stocks in the European market, and has many admirers on Wall Street. However, the shares have dipped in the past few hours after investment advisory UBS downgraded the stock to Neutral from Buy and lowered the price target to €900 from €1,050. In an investor note, analysts led by Nicolas Gaudois detailed that despite being one of the best fundamental stories in the European tech sector with strong management execution, the EPS of ASML would grow at a 13% compound annual growth rate in 2025-30, compared to 24% in 2018-25, a forecast that justified the normalization of multiples relative to peers.
UBS analysts added that there remained some short-term upside potential around ASML Holding N.V. (NASDAQ: ASML) given the 2025 outlook, but doubled down on claims that the narrative would begin to shift to 2026/27, where there was downside to the EBIT consensus. UBS predicted that AI would only represent 10% to 15% of revenue for the firm in the next three years, with analysis in China showing overspending on EUV relative to other equipment.
13. 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 technological superiority of TSM over rivals is well documented. For example, take the first Intel microprocessor. It had about 2,000 transistors. Now, compare this to the latest TSM chips that are packed with more than 200 billion transistors. The difference has made the AI revolution possible. For context, making identical copies of a single chip for an iPhone requires one TSM fab to produce more than a quintillion transistors every few months. The scale at which this chipmaker operates is unlike any other business in the world.
Bernstein analyst Mark Li has an Outperform rating on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock and recently raised the price target to $200 from $150, noting that data center AI revenue was rising for the firm as planned, but there was more data indicating AI driving an upward shift in smartphone. The analyst further added that more CoWoS, earlier Lunar Lake, and possible price hike can drive EPS to grow another 26% in 2026.
12. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. Even though the company is a top name in the AI space, it has suffered amid a broader selloff in the semi sector, despite the release of global semiconductor industry sales that showed appreciable growth. Global semiconductor industry sales were more than $53 billion in the month of July, according to data by the Semiconductor Industry Association. This represented an increase of nearly 3% from the previous month and a gain of almost 19% year over year. The strong showing failed to impress investors, with the Philadelphia Semiconductor Index falling close to 8% during intra-day trading.
This volatility has impacted Wall Street views on Micron Technology (NASDAQ:MU). Citi recently trimmed estimates on the stock, noting that a little bit of inventory had built up in the PC and wireless supply chains. In an investor note, the advisory claimed that Micron would end up increasing inventory, which added risk to near-term estimates, but clarified that DRAM upturn continued with upside from Samsung and Hynix, with DRAM pricing set to increase 12% in Q3 and 6% in the fourth quarter.
11. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 64
Analog Devices, Inc. (NASDAQ:ADI) designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products. The company has been on the radar of analysts on Wall Street as the AI wave sweeps the market. A recent selloff in the semiconductor world has sparked wider concern around ROI on AI capex, but investment advisory Citi has sought to ease these concerns, reiterating a Buy rating on Analog Devices, detailing that semi firms would achieve 14% year-on-year growth in sales forecasts despite recent hiccups and amid an inventory replenishment.
Citi analyst Christopher Danely mentioned Analog Devices, Inc. (NASDAQ:ADI) and other semi stocks in the investor note over the weekend, the semi industry announced July monthly sales of $48.7 billion, down 10.8% month-on-month, but slightly above estimates of $48.4 billion. The analyst noted that with units down 19% in 2023, the worst correction since 2001 had already taken place in the semi world.
10. 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 company has been differentiating itself from competitors in the AI space through the large-scale production and implementation of AI products into businesses. The recent deal with Microsoft to integrate Palantir AIP into Azure offerings for the government is a prime example. Since AI is still very much a developing sector, startups dominate the landscape, offering a host of products and services that are very catchy but often encounter problems at scale.
Indeed, Shyam Sankar, the CTO of Palantir Technologies Inc. (NYSE:PLTR), highlighted this in the recent earnings call. Sankar said that it was so easy to create an AI prototype, the equivalent effort of making a PowerPoint slide, but it was actually very, very hard to get that in production, probably 10 to 100 times harder than traditional software transitioning to production. He added that this was the area of the market where Palantir saw an opportunity for growth.
9. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. The company posted strong second quarter results earlier this year, showcasing impressive profitability and a more than 40% year-on-year increase in sales. This growth was driven by AI-related revenue and contributions from the recent acquisition of cloud computing firm VMware. As the date for the third quarter earnings draws closer, it is worth looking at the guidance numbers from the second quarter. The revised 2024 outlook by the firm projects 40% top line growth powered by generative AI and margin expansion.
Broadcom Inc. (NASDAQ:AVGO) has earned bullish reviews from Wall Street. Bank of America recently raised the price target on the stock to $2,150 from $2,000 and kept a Buy rating, underlining that driven by growing AI and VMWare contributions, Broadcom was transforming to a growth from a value stock. The advisory further stated that traditional semis/software could have an annual growth rate of 13% in the next two years.
8. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Constellation Energy Corporation (NASDAQ:CEG) generates and sells electricity in the United States. The company has posted a handsome increase in adjusted operating revenue and net income per share so far this year, as long-term growth drivers like data center and EV demand drive up the prices of power due to supply demand imbalances. The financial health of the company is a strong positive in a volatile market. Back in April, the firm approved another $1 billion in share buybacks, increasing the total authorization to $1.5 billion since 2023. The firm is also a key player in clean energy generation, a major plus as tech giants look towards renewables to power their AI data center needs.
Constellation Energy Corporation (NASDAQ:CEG) has grabbed the attention of analysts on Wall Street. Bank of America recently raised the price target on the stock to $208 from $201 and kept a Neutral rating, noting that research suggested that the US Power and Utilities sector would perform well through the remainder of the year due to the market typically taking a more defensive bias in the second half, prospects for rate cuts, and likely positive business updates during Q3 earnings reports.
7. 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 undergone a steep decline in the past week after the company disclosed that it would not be able to meet a 10K filing deadline, igniting fears of accounting irregularities. The CEO of the firm, Charles Liang, has penned a letter to investors to ease fears regarding these rumors. In the letter, Liang underlined that the rumor mill would not impact the ability of his firm to deliver on important product milestones to meet customer demands.
Liang also addressed a recent report on Super Micro Computer, Inc. (NASDAQ:SMCI) released by Hindenburg Research, a short-seller hedge fund that said it was shorting SMCI stock because of accounting irregularities at the tech manufacturer. Liang termed the allegations false and inaccurate, noting that engineering and support teams at the company were unaffected by the allegations and continued to build and deploy large scale AI Total Solutions.
6. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. It has invested more than $10 billion in OpenAI, the California-based AI startup that launched ChatGPT back in late 2022. Latest reports suggest that Sam Altman, the CEO of the startup, has been lobbying the US government over a plan to build the AI infrastructure needed for supporting AI-based machines and systems across the world. This plan includes tens of billions in spending to set up data centers, grow energy capacity and transmission with renewables, and expand semiconductor manufacturing.
Altman is forming a coalition of global investors for the purpose, with backers in Canada, Korea, Japan, and United Arab Emirates. There are also rumors that Microsoft Corporation (NASDAQ:MSFT) will be an active participant in the coalition. The reports come as OpenAI nears a new funding round that could push the valuation of the startup to over $100 billion. Microsoft, NVIDIA, and Apple are rumored to participate.
