In this article, we discuss the 20 trending AI stocks on latest news and analyst ratings.
Global management consulting firm Bain & Company recently released a report on the artificial intelligence industry, highlighting that AI was driving an unprecedented wave of technological change, with the market for AI products and services projected to reach between $780 billion and $990 billion by 2027. Per the research done by Bain, major cloud services providers were at the forefront of AI research and development, pushing the boundaries of larger models, advanced infrastructure, and energy efficiency. These hyperscalers were focusing on the development of larger, more complex models that demanded significant computational power and resources, leading to the need for data centers with energy capacities up to gigawatts, potentially straining energy grids and supply chains.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
Bain underlined that while the big players dominated the high end of the market with expansive models and enormous data centers, innovation was also thriving in smaller models. These smaller, domain-specific models were being deployed at the edge, where they were more cost-effective, energy-efficient, and capable of addressing real-time processing needs, particularly in applications like autonomous driving. The proliferation of models like Llama, Claude, and Gemini illustrated how AI was evolving rapidly beyond just a few proprietary models, with many options now open-source or specialized for particular tasks.
The research further detailed that the rapid growth in AI workloads, particularly with data-heavy applications, was also reshaping the technology landscape. The need for increased storage, computing power, and memory was driving innovations in data center design, networking, and storage technologies. Per Bain, chip companies and particularly GPU makers were expanding beyond their core graphics processing units to include integrated solutions that improved the efficiency of AI models, with their products now combining compute, memory, and networking capabilities. The competition was also spurring the development of vertically integrated AI solutions, where tech companies designed everything from hardware to software to optimize AI performance.
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.
An overhead view of a modern networking technology suite in a data center.
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).
20 Trending AI Stocks on Latest Analyst Ratings and News
20. Arista Networks, Inc. (NYSE:ANET)
Number of Hedge Fund Holders: 65
Arista Networks, Inc. (NYSE:ANET) engages in the development, marketing, and sale of data-driven, client to cloud networking solutions for data center, campus, and routing environments. Jayshree V Ullal, the CEO of the firm, detailed during the second quarter earnings call that data centers were evolving to holistic AI centers, where the network was the epicenter of AI management for acceleration of applications, compute, storage, and the wide area network. Ullal noted that these AI centers needed a foundational data architecture to deal with the multimodal AI datasets. Artista was providing the differentiated Extensible Operating System network data link systems for running these datasets.
Evercore ISI analyst Amit Daryanani has an Outperform rating on Arista Networks, Inc. (NYSE:ANET) stock with a price target of $400. In a recent investor note, the analyst highlighted a report that claimed that Meta was putting the finishing touches on a model training cluster that would exceed 100,000 GPUs, pointing out that the cluster would be networked by Ethernet because InfiniBand could not handle clusters of this scale. The analyst detailed that there was a high probability that Arista Networks would provide the Ethernet switches for this cluster, a deal that would represent a $250 million revenue opportunity for the networking firm.
19. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 18
C3.ai, Inc. (NYSE:AI) operates as an enterprise artificial intelligence software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. DA Davidson recently lowered the price target on the stock to $20 from $30 and kept a Neutral rating on the shares. The advisory highlighted in an investor note that the company reported a mixed quarter with total revenue growth accelerating, though its subscription revenue declined quarter over quarter, leading shares lower. The advisory further added that the firm continued to convey a large opportunity ahead of it and was focused on growing total revenue, though the stock also fully reflected the current growth prospects for the company.
C3.ai, Inc. (NYSE:AI) stock has been in the spotlight over the past few weeks after the subscription revenue growth and guidance numbers kept analysts concerned about the long-term trajectory of the shares, even after the company beat market expectations on earnings per share and revenue for the first fiscal quarter by $0.08 and $0.26 million respectively.
