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.
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For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds.
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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.
18. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. The CEO of the firm, Lisa Su, spoke at the Goldman Sachs 2024 Communacopia and Technology Conference earlier this month, stressing that the market was at the start of a multiyear AI PC cycle. According to the CEO, AI was the most significant innovation that had come to the PC market in the last 10-plus years. She noted that AI tech in PCs could be used as productivity tools, giving the example of the work AMD did with the AI PCs of tech giant Microsoft in this regard. Looking ahead, she predicted that AI PCs would be a driver of the commercial refresh cycle for the company next year.
Advanced Micro Devices, Inc. (NASDAQ:AMD) recently announced that it would be hosting an online event called Advancing AI 2024 on October 10. The event aims to showcase the next-generation AMD Instinct accelerators and 5th Gen AMD EPYC server processors, as well as Networking and AI PC updates, in addition to highlighting the growing AI solutions ecosystem of the company.
17. 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. Online retail platform Newegg recently announced that it would start working with Dell Technologies Inc. (NYSE:DELL) as an authorized partner. The online retail firm singled out the energy efficiency, recycled materials, and eco-friendly certifications of Dell hardware products in the press release issued on the occasion. The AI potential of Dell notwithstanding, the legacy hardware business of the company continues to gain increased traction.
Mizuho analyst Vijay Rakesh recently initiated coverage of Dell Technologies Inc. (NYSE:DELL) stock with an Outperform rating and $135 price target. The analyst, in an investor note, highlighted that generative artificial intelligence was igniting growth and disruption across multiple markets, including AI servers which comprised the infrastructure enabling the AI revolution. The note underlined that there were two major server manufacturers spearheading this future, including Dell Technologies.
16. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. Hours after media reports that Intel was entertaining a takeover offer from rival QUALCOMM, Wells Fargo released an update on the developments for investors, noting that such a deal had relatively low probability as such a combination would have a tough time passing regulatory scrutiny – especially in China. On the other hand, the advisory highlighted that an equity-like investment from Apollo could be a very possible outcome, which would be a positive sign of confidence. However, the extent of existing shareholder dilution would be a key consideration, Wells added.
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. Defense firm Honeywell has announced that it is working to develop an artificial intelligence-enabled Multi-Modal Intelligent Agent for Honeywell mobile devices that will be powered by Qualcomm Technologies chips. Per the defense company, the agent will allow workers and customers in the distribution center and retail industries to interact naturally with their handheld devices through voice, pictures, and barcodes.
QUALCOMM Incorporated (NASDAQ:QCOM) recently posted earnings for the third fiscal quarter. The EPS beat consensus estimates of $2.25 with reported adjusted EPS coming in at $2.33 per share. This earnings beat was paired with a strong forecast of $2.45-1.65 per share for the next fiscal quarter. For comparison, analysts had been estimating a range of $2.23-2.83 per share. A lot of the strength in revenue for the third quarter was derived from strong handset and automotive revenue in their QCT segment, growing by 87% and 12%, respectively.
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.
Gary Dickerson, the chief of Applied Materials, Inc. (NASDAQ:AMAT), spoke at the Goldman Sachs 2024 Communacopia and Technology Conference earlier this month, noting that the whole industry was focused on energy efficient computing as the biggest global inflections ever were driving the semiconductor growth, like AI, IoT, Industrial Automation, Robotics, EVs, Autonomous Vehicles, and Renewable Energy. Per Dickerson, these were all just really big multi-trillion dollar inflections.
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 company recently announced the availability of the SC6100, a next-generation, 2U rackmount all-flash storage controller for enterprise application workloads. The storage controller builds on a cutting-edge portfolio of storage, compute and networking Hardware Platform Solutions, one of the fastest-growing departments of the firm due to the AI boom. The controller is powered by two AMD EPYC Embedded 9004 series processors and supports up to 24 dual-port U.2 PCIe Gen 5 solid state drives.
Canaccord analyst Robert Young recently raised the price target on Celestica Inc. (NYSE:CLS) 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. Wall Street analysts have acknowledged the technological superiority that the chipmaker has over rivals as far as the United States. Northland recently underlined in an investor note on TSM rival Intel that the US military had no alternative to TSM for advanced logic chips, even though the Department of Defense required that the chips they use be manufactured on US soil.
Finance experts like Susquehanna analyst Mehdi Hosseini are bullish on the long-term growth prospects of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), with the analyst recently maintaining a Positive rating on the stock with a price target of $250. Recent reports indicate that the firm will raise prices on key 3nm and 5nm nodes in 2025. This rise should help the firm beat analyst expectations on 2025 EPS, which presently sit around $6.3, up nearly 21% on a year-on-year basis.
11. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. The company recently announced the availability of a new solid-state drive that offers two times faster performance than the previous model. The new drive would give gamers, students and creatives a boost in speed when they boot and use data-intensive applications, per the company. The new solid-state drive has capacities up to 2 terabytes and read and write speeds of 7,100 and 6,000 megabytes per second respectively. The new offering expands the portfolio of Micron Technology to address PCs, laptops and PlayStation 5.
Baird recently lowered the price target on Micron Technology (NASDAQ:MU) stock to $150 from $172 and kept an Outperform rating on the shares. The advisory said Micron expected its HBM share to hit parity with its overall DRAM market share in C2025, which was the crux of Baird’s investment thesis on the stock given their views HBM could generate low-60%s gross margin while representing a 60% CAGR. Baird said the chipmaker remained one of their top ideas and valuation was attractive and the HBM opportunity was not fully priced in.
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 CEO of the firm, Rene Haas, recently appeared on news platform CNBC, to highlight the progress of his firm in the AI space. Haas told investment advisor Jim Cramer that Arm has had a number of design wins in the data center over the past few years. The company had gained significant market share in the data center recently, he noted. AI workloads that require a huge amount of computing were great for Arm, he added. According to Haas, the company was in a great place going forward.
William Blair recently initiated coverage of Arm Holdings plc (NASDAQ:ARM) stock with an Outperform rating. In a research note, analysts at the advisory noted that Arm was a critical vendor of computing intellectual property with best-in-class financials. The analysts further commented that Arm provided critical computing IP that underpinned more than $200 billion in chip value across the mobile, automotive, internet of things and data center markets, with royalty/licensing revenue model driving best-in-class profitability.
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. Wedbush analyst Daniel Ives raised the price target on the stock to $45 from $38 and kept an Outperform rating on the shares. In an investor note, Ives underlined that Wedbush was more bullish on Palantir going forward as recent channel checks indicated incrementally more enterprises were strategically discussing how the company’s Artificial Intelligence Platform would be deployed in their enterprise during 2025.
Per Ives, the increased price target reflected higher confidence in Palantir’s enterprise-driven artificial intelligence strategy, which Wedbush viewed as a clear game changer for Palantir Technologies Inc. (NYSE:PLTR) story as the use cases of AI start to take hold over the next 12 to 18 months. The company was in a prime spot to continue expanding its pipeline/deal flow while providing more use cases coming forward to address critical problems across industries, contended Ives.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. The company recently announced earnings results for the third fiscal quarter, and Wall Street analysts were quick to outline their views on the report. Benchmark noted in an investor note that the earnings report of Broadcom was being looked to as some sort of savior of the AI momentum trade following a week of incredibly poor performance in the stock price of NVIDIA and most AI related names. However, the advisory underlined that Broadcom delivered only a tepid beat for the July quarter and provided guidance that was just shy of the consensus estimates.
Charlie Kawwas, the president of Broadcom Inc. (NASDAQ:AVGO), spoke at the Goldman Sachs 2024 Communacopia and Technology Conference earlier this month, saying that increased spending by the large Tier-1 hyperscalers would drive growth in the AI semiconductor business of Broadcom in fiscal 2025. In light of this, per Kawwas, Broadcom had positively revised its fiscal 2024 AI semiconductor revenue outlook from $7.5 billion at the beginning of fiscal 2024 to $12 billion earlier this month Kawwas also reiterated Broadcom’s deep focus on markets where it could build a sustainable franchise founded on technological leadership.
7. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Constellation Energy Corporation (NASDAQ:CEG) generates and sells electricity in the United States. David Tepper of Appaloosa Management has taken aim at companies projecting that nuclear energy will power the AI boom, terming projections in this regard crazy and instead highlighting the potential of natural gas for the purpose. The comments come in the wake of a major rally in Constellation Energy stock following the announcement of a 20-year nuclear deal with tech giant Microsoft. Tepper made the comments during an appearance on news platform CNBC. The hedge fund manager stressed that in order to meet AI power, companies would have to think about using natural gas.
Constellation Energy Corporation (NASDAQ:CEG) will spend nearly $1.6 billion under the Microsoft deal to revive a nuclear plant. The energy firm expects it to come online by 2028. The company is also expecting to renew the license that would extend plant operations to at least 2054.
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. JPMorgan recently downgraded the stock to Neutral from Overweight with a price target of $500, down from $950. In a research note on the company, the advisory clarified that the downgrade was not led by lower confidence in the company’s ability to regain compliance in relation to regulatory filings or related to any of the tenets of the Hindenburg Research short report.
Rather, per the note, the downgrade reflected a near-term view that there was not a clear rationale for new investors stepping into Super Micro Computer, Inc. (NASDAQ:SMCI) shares while uncertainty existed around regaining compliance with regulators that was critical beyond the unchanged business fundamentals.
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. JMP Securities analyst Andrew Boone has an Outperform rating on Alphabet Inc. (NASDAQ:GOOG) stock with a price target of $200. The analyst closely followed the developments at the Gemini at Work event hosted by Google recently, highlighting for investors a 35x increase in Gemini usage as 75% of daily Gemini for Workspace users said AI improved the quality of work. The analyst further underlined that AI adoption was beginning to inflect across Enterprise, with Google offering 185 real-world examples on how enterprises were integrating AI.
In a notable development, Reuters recently reported that Alphabet Inc. (NASDAQ:GOOG) is planning to construct a large data center in Vietnam. Data centers are critical to the ongoing AI revolution in the tech industry. To date, no hyper-scaler has announced plans to build a data center outside the US. According to Reuters, internal discussions are underway, and the facility could be operational by 2027.
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. The firm has taken a different approach than other tech giants when it comes to AI, choosing to open source the large language model it has developed, unlike Google and Microsoft. This is largely because the firm plans to use the generative AI potential to enhance the advertisement market. Meta just recently overtook Google in digital ad market share and now plans to beat Amazon in the ad domain as well. Under this plan, the firm is also investing heavily in AI infrastructure build.
Roth MKM analyst Rohit Kulkarni has a Buy rating and $550 price target on Meta Platforms, Inc. (NASDAQ:META) after attending the Meta Connect conference keynote by CEO Zuckerberg. In a research note following the event, the analyst noted that the key event was marked by Zuckerberg showing off AR prototype glasses after working on them for 10 years, and with 50% of Reality Labs’ spend having been earmarked to AR, the next couple of years could see slower growth in incremental spend. The note further added that 2024 could also mark a peak segment operating loss margin year for Reality Labs.
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. Anthropic, the generative artificial intelligence company that is backed by Amazon, recently announced that it would be launching a version of Claude geared towards large businesses. Claude is an array of large language models developed by Anthropic. The move comes after OpenAI, a rival of Anthropic, launched ChatGPT for Enterprise in August. Both companies offer monthly subscriptions to their AI tools. TechCrunch reports that the subscription for Claude would cost more than $30 per month. Amazon.com, Inc. (NASDAQ:AMZN) has already pledged more than $4 billion towards the AI startup.
Citi recently reiterated a Buy rating on Amazon.com, Inc. (NASDAQ:AMZN) with a $245 price target. Analysts at the advisory issued an investor note following a third party seller event named Amazon Accelerate. The note detailed that the advisory was incrementally confident that Amazon’s core retail segment would continue to gain greater wallet share as fulfillment efficiencies lowered overall cost to serve. With faster shipping speeds, the rise in essentials, and improving conversion rates, Amazon’s core retail business would deliver continued share gains and expanding margins as Web Services demand accelerated, the note underlined.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. Bank of America recently released an investor note on the company, reiterating a Buy rating on the stock with a price target of $256. In the note, the advisory discussed the several avenues for monetization within the services strategy for Apple, arguing that revenue from downloads of apps using AI on the Apple App Store and the potential for a subscription-based platform for Apple Intelligence itself once Apple AI was further developed had been analyzed and undoubtedly presented a large-scale revenue opportunity for Apple.
Analysts at the bank further noted that Siri integration monetization was one we find the most overlooked and had the potential to become very significant over time. According to the bank, deep Siri integration with apps could drive $3 billion in revenues in 2026 and could approach about $50 billion in a decade for Apple Inc. (NASDAQ:AAPL).
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. David Tepper, the chief of Florida-based investment firm Appaloosa Management, has urged investors to be cautious about investing in the chipmaker because of uncertainty around the long-term growth prospects of artificial intelligence. Tepper made the comments during an appearance on news platform CNBC last week. The hedge fund manager, who reduced a major stake in NVIDIA on behalf of his fund in the second quarter of 2024, per latest 13F filings, said he sold the stock because he thought it was too high at the time and would come down. Tepper expressed disappointment that he could not buy the shares when they came back down.
Tepper, whose hedge fund owns nearly $85 million worth of NVIDIA stock despite the recent reduction, acknowledged that NVIDIA Corporation (NASDAQ:NVDA) was a major player in the AI boom and could still have some upside, but expressed doubts about the sustainability of AI demand. He questioned whether there was enough power for AI growth and whether next generation models could take their chips.
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 Corporation (NASDAQ:NVDA) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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