In this article, we take a look at 20 trending AI stocks on the latest news and ratings.
S&P 500 to Reach 6,000 by Year-End Amid AI Boom and Earnings Growth
Joining CNBC’s Squawk Box to discuss the latest market trends, Mary Ann Bartels of Sanctuary Wealth remains bullish on 2024, expecting the S&P 500 to hit 6,000 by year-end. As the Fed recalibrates to an easier monetary policy and corporate profits continue to grow, the chief investment strategist believes the market will maintain its rally as we approach November and December.
As of today, the S&P is around 3% shy of hitting 6,000. This is only eight months after it eclipsed 5,000 for the first time. Monday, October 14 proved to be a new record for the S&P, marking the bull market’s second anniversary. The milestone represents an impressive recovery over the last two years when stock prices surged despite ongoing recession concerns and elevated interest rates.
S&P 500 reaching all-time highs comes amidst optimism on Wall Street as the third-quarter earnings season kicks in. With corporate earnings proving resilient amidst high rates and moderating inflation, and investors piling into stocks poised to benefit the most from the generative AI craze- the market sentiment remains bullish as traders anticipate strong financial results and continued growth in technology-driven sectors.
Artificial Intelligence-linked stocks have been leading the S&P 500 and Nasdaq higher. On October 14, the S&P 500 and Dow Jones Industrial Average both reached all-time highs, closing up 0.8% and 0.5%, respectively. Meanwhile, the Nasdaq gained 1% and approached a record of its own. Despite these recent gains, high valuations will seemingly pose a challenge for continued growth, with analysts noting that this could be a sign that the bull market may be nearing its end.
Read more about these developments by accessing 10 Unsexy AI Stocks According to Goldman Sachs and 10 Buzzing AI Stocks According to Goldman Sachs.
Strategists also caution that moving forward, continued gains will depend on identifying sectors with strong earnings growth. As Artificial Intelligence is poised to significantly influence future market performance, the focus will shift to AI’s impact on profitability across various industries. According to Citi equity strategist Scott Chronert, for AI to continue driving market gains, “you’ve got to have more companies delivering on the AI promise via margins and profitability metrics.”
At the same time, it is also true that ongoing conflicts in the Middle East, upcoming US presidential elections, and natural disasters may pose risks to the market’s climb. Nevertheless, ongoing AI innovation and a resilient economy are still in support of further gains. In light of this, Solita Marcelli, Chief Investment Officer for Americas at UBS Global Wealth Management, further notes how third-quarter results could act as a catalyst for market gains as investors focus on tech fundamentals and AI.
“We continue to expect increased volatility for technology stocks in the near term,” the note states. “However, we remain positive on the tech sector as well as the outlook for artificial intelligence (AI). Against this backdrop, we believe volatility should be utilized to build long-term AI exposure.”
According to the bank, October has historically been a turbulent month for tech stocks, citing how monthly realized volatility for the Nasdaq 100 over the past 40 years has been 26% in October, while other months have an average of 22%. Regardless, strong AI fundamentals and the upcoming earnings season will reaffirm positive growth trajectories.
It is further stated that the overall AI semiconductor industry is expected to grow sharply, reaching $168 billion by the end of the year. Tech and AI companies are also anticipated to “beat and raise” expectations for the September quarter. Furthermore, the ongoing transition to smaller, more powerful AI chips will drive significant performance improvements, fueling further investment in the sector.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
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Our Methodology
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. 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
20. Astera Labs Inc (NASDAQ:ALAB)
Number of Hedge Fund Holders: 19
Astera Labs Inc (NASDAQ:ALAB) is a connectivity platform company that designs, manufactures, and sells semiconductor-based connectivity solutions for cloud and AI infrastructure. On October 8, Astera Labs Inc (NASDAQ:ALAB) introduced a new portfolio of fabric switches, including the industry’s “first PCIe® 6 switch, built from the ground up for demanding AI workloads in accelerated computing platforms deployed at cloud-scale”. Known as the Scorpio Smart Fabric Switch portfolio, it is optimized for AI data flows to deliver benefits such as predictable performance per watt, high reliability, easy cloud-scale deployment, reduced time-to-market, and lower total cost of ownership.
Analysts from Jefferies state that these new products can help Astera Labs Inc (NASDAQ:ALAB) expand the market for its products as well as diversify its offerings. CEO Jitendra Mohan and CBO Thad Omura at Astera Labs Inc (NASDAQ:ALAB) joined Patrick Moorhead of Moor Insights & Strategy to discuss how Scorpio Smart Fabric Switches are revolutionizing AI infrastructure. Specifically engineered for AI workloads, these switches target accelerated computing platforms at cloud scale. The Scorpio switches are designed to maximize system utilization and uptime, supporting both scale-out PCIe 6 connectivity and scale-up GPU clustering in AI servers.
19. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 37
Based in Mountain View, Canada, SentinelOne, Inc. (NYSE:S) is an advanced American cybersecurity AI platform offering the best-in-class AI-powered security to its customers. Its most advanced AI-assisted platform, Purple AI, has surpassed company expectations and contributed to Q2 outperformance, only months after its general availability.
Purple AI’s generative AI capabilities, a major competitive advantage to the company, have been helping customers garner real gains with 80% faster threat hunting and investigations. In essence, SentinelOne, Inc. (NYSE:S)’s Purple AI leverages the power of artificial intelligence- translating natural language questions into sophisticated queries that help enable deep analysis of logs and data from native and third-party sources, further accelerating the entire threat detection and response process.
On October 14, Piper Sandler upgraded the rating of the stock from “Neutral” to “Overweight”. The firm has also upgraded the price target for the company, raising it from $25 to $32 amidst a positive shift in sentiment toward the stock. Piper Sandler believes that SentinelOne, Inc. (NYSE:S) is poised for incremental share gains against Crowdstrike Holdings Inc. (NASDAQ:CRWD), especially after their disastrous software update that was seemingly caused by a human error. Naturally, Sentinel One’s AI-automated services and the enhanced narrative around automation are poised to help gain market share and drive revenue for the company. Despite the optimistic outlook, analysts also point out risks, such as macroeconomic challenges, competitive pressures, data breach risks, and potential cash flow issues.
18. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Arm Holdings plc (NASDAQ:ARM) is a British semiconductor and software design company that designs and manufactures semiconductor technology and other related products. The company showcases leadership in mobile and AI technology with products like the Axion processor, Ethos-U85, and Windows on Arm. With a strong developer network and expanding market presence, it is positioned as a key computing platform across various industries.
A year ago, Arm Holdings plc (NASDAQ:ARM) introduced Arm Total Design, an ecosystem of industry leaders collaborating to accelerate and simplify the development of Arm Neoverse CSS-based systems. Doubling in size and driving innovation in AI and silicon development, Arm Total Design has sparked a global collaboration with key partners, resulting in “real-world CSS-powered solutions for GenAI computing”.
In latest news by ARM, Arm Holdings plc (NASDAQ:ARM), Samsung Foundry, ADTechnology, and Rebellions are joining forces to bring to market an AI CPU chiplet platform. This platform will be targeting cloud, HPC, and AI/ML training and inference workloads, combining Rebellions’ REBEL AI accelerator built with a Neoverse CSS V3-powered compute chiplet from ADTechnology to be implemented with Samsung Foundry 2nm Gate-All-Around (GAA) advanced process technology. The platform aims to deliver incomparable performance and optimal power efficiency, with an estimated 2-3x efficiency advantage for GenAI workloads (Llama3.1 405B parameter LLMs).
“AI and HPC designs require technology solutions that deliver maximum performance, high transistor density, and energy efficiency. Samsung Foundry’s 2nm GAA process is designed precisely to satisfy the most stringent HPC and AI design requirements, and we’re excited to leverage the flexibility of Arm CSS and the power of the Arm Total Design ecosystem to deliver an AI CPU chiplet platform, which will further accelerate adoption of our leading-edge technology and design solutions for hyperscalers and cloud service providers.”
-Taejoong Song, Vice President and Head of Foundry Business Development at Samsung Electronics.
17. Reddit Inc (NYSE:RDDT)
Number of Hedge Fund Holders: 39
Reddit Inc (NYSE:RDDT) is an American social news aggregation, content rating, and forum social network. The company has been enhancing its AI capabilities by acquiring Memorable AI, following a partnership announcement with OpenAI, the creator of ChatGPT, which is backed by Microsoft (MSFT). These moves reflect its commitment to integrating advanced AI technologies into its offerings.
On October 9, 2024, Jefferies analysts initiated coverage of the stock with a “Buy” rating and a price target of $90. According to the firm, this valuation is based on $65 per share for Advertising and $25 per share for Data Licensing.
“RDDT is combining AI-driven product enhancements with a robust archive of contextual content to spur trial and engagement, resulting in recent user growth accelerating to the highest level in 2+ years,”
-Analysts said in a note.
The company’s growth can be attributed to its deeper integration with Google search and the launch of a faster Web platform. Investments in AI and machine learning have enhanced recommendation algorithms, further improving user experience and increasing logged-in users. Jefferies also notes how RDDT’s extensive database of user-generated content has garnered the interest of third-party developers of generative AI models, securing approximately $325 million in non-exclusive contract licensing revenue over the next three years.
“We believe expanding use-cases for Gen AI over time will attract new partnerships, resulting in additional high margin revenue streams and upside to consensus”.
-Jefferies analysts
16. The Trade Desk, Inc. (NASDAQ:TTD)
Number of Hedge Fund Holders: 46
The Trade Desk, Inc. (NASDAQ:TTD) is an American multinational technology company specializing in real-time programmatic marketing automation technologies, products, and services. The technology company has been leveraging the power of AI since 2018, to increase ROI for its customers. The company’s new Kokai platform uses AI and has shown encouraging acquisition cost results and solid performance.
Citi analyst Ygal Arounian maintained a positive stance on The Trade Desk, Inc. (NASDAQ:TTD), and increased its price target to $140.00 from the previous target of $115. The analysts expressed increased confidence in the sustained growth potential of Connected TV (CTV) and Retail Media and Trade Desk’s prominent role in both sectors.
Similarly, analysts at Stifel Nicolaus raised the price target for The Trade Desk, Inc. (NASDAQ:TTD) from $111 to $136 and kept a “Buy” rating on the shares. In a Q3 preview for the digital advertising sector, the analysts mention that the firm’s checks indicate stronger-than-expected growth in the third quarter ahead of the agency’s initial forecasts, expecting it to carry into Q4 with the U.S. election advertising environment ramping and “a fairly robust holiday season”.
15. Coherent Corp. (NYSE:COHR)
Number of Hedge Fund Holders: 47
Coherent Corp. (NYSE:COHR) is an American manufacturer of optical materials and semiconductors. Analysts are particularly interested in this stock because of its potential for growth driven by artificial intelligence (AI) initiatives.
On October 14, Needham analyst James Ricchiuti raised the price target for Coherent Corp. (NYSE:COHR) to $120, up from $84. The firm maintained a “Buy” rating on the stock after analysts see potential for growth driven by artificial intelligence initiatives and also leadership changes.
Needham sees COHR continue to run higher on the back of the company’s AI transceiver business. Moreover, it’s improving outlook for the OLED/semi-cap business, balance sheet de-levering from lower rates as well as proceeds from possible divestitures as new CEO Jim Anderson and newly united CFO Sherri Luther begin executing on the plan also make a strong case for the stock, as per analysts.
14. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 54
International Business Machines Corporation (NYSE:IBM) is an American multinational technology company. The global technology innovator has been leading advances in AI, automation, and hybrid cloud solutions.
According to RBC Capital Markets, the company is anticipated to release “solid” third-quarter results driven by ongoing strength in generative artificial intelligence. It further notes its focus on enhancing software traction, especially from Red Hat, which management anticipates will re-accelerate in the latter half of the year. RBC Capital raised the firm’s price target from $211 to $250, keeping an “Outperform” rating on the shares ahead of Q3 results. This expectation comes as the strong performance in the first half was primarily fueled by unexpectedly strong infrastructure performance towards the end of the refresh cycle, along with GenAI bolstering consulting efforts.
13. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 54
MongoDB, Inc. (NASDAQ:MDB) provides a general-purpose database platform worldwide. It harnesses AI to streamline the building of AI-enriched applications, enhance generative AI deployments, and integrate machine learning models. For instance, MongoDB Atlas, the cloud-based version of MongoDB, helps streamline the building of AI-enriched applications by unifying operational, unstructured, and AI-related data.
Following a strong second-quarter performance, MongoDB, Inc. (NASDAQ:MDB) has been the focus of several positive analyst reviews. On October 11, DA Davidson analyst Rudy Kessinger maintained a Buy rating on MongoDB, Inc. (NASDAQ:MDB) and raised the price target from $330 to $340. Highlighting a recent discussion with the management of MongoDB, Inc. (NASDAQ:MDB), DA Davidson highlighted the challenges of holding MongoDB stock for short-term investors due to unpredictable consumption growth trends, yet continues to endorse it for long-term investors.
Piper Sandler has also been reinforcing MongoDB, Inc. (NASDAQ:MDB) as a worthwhile investment stock in cloud software, alongside two other stocks.
“We recommend large-cap growth investors to take on more risk and increase their position in ‘MAC’ (MAC refers to Adobe, MongoDB, and Salesforce). These are stocks that have underperformed market expectations, with average prices still 26% below their 52-week highs, despite having healthy product and profit catalysts, as well as favorable risk-return profiles”.
According to Piper Sandler, the stock is expected to recover from its decline over the next few quarters.
12. Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 58
Elastic N.V. (NYSE:ESTC) is an American-Dutch search artificial intelligence (AI) company, delivering hosted and managed solutions designed to run in hybrid, public or private clouds, and multi-cloud environments in the United States as well as internationally. The data analytics company leverages AI across its product offerings, particularly within its “Elastic Stack” comprising Elasticsearch, Kibana, Beats, and Logstash (also known as the ELK Stack) and more.
At the end of Q1 2025, over 1,300 customers were using Elastic Cloud for generative AI use cases while approximately 200 of their 100k customers were using their platform for generative AI use cases. Elastic Cloud is a fully managed service that includes hosted Elasticsearch, app search, and site search. Elastic’s Copilot now uses ELSER, the company’s proprietary retrieval model for semantic search, enabling customers to create personalized content with faster and more accurate retrieval-augmented generation. This has led to a more than twofold increase in the Elastic consumption in six months.
On October 14, William Blair analyst Jake Roberge upgraded Elastic N.V. (NYSE:ESTC) from “Market Perform” to “Outperform”. In a note to clients, Roberge notes that Elastic NV has a large opportunity ahead, with its vector and hybrid search solutions poised to benefit from the rise of more AI applications over the next few years. He further states how Elastic’s recent go-to-market “noise” provides a “nice entry point” for a “quality” long-term story,
Roberge further added that Elastic’s management has said the Elasticsearch Relevance Engine is seeing “solid” demand trends and presents a large opportunity for existing customers to upgrade to premium platform tiers. Moreover, it will also allow the company to get new customers onto the platform and drive increased consumption.
11. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 61
Cisco Systems, Inc. (NASDAQ:CSCO is an American multinational digital communications technology conglomerate developing, manufacturing, and selling networking hardware, software, telecommunications equipment, and other high-technology services and products. Cisco’s strategy for AI features a processor specifically engineered to address AI networking needs, capitalizing on its AI capabilities to strengthen security, observability, and more.
On October 14, Tigress Financial analyst Ivan Feinseth reiterated a Buy rating on Cisco Systems based on AI-driven growth prospects and set a price target of $78. The Buy rating comes due to the company’s strategic business advancements and strong financial health. The optimism also comes from increasing demand for advanced AI-driven high-speed network bandwidth and security services. Moreover, the company’s transition to a subscription-based revenue model is expected to drive long-term shareholder value, while its focus on integrating AI into its products is also opening new growth opportunities.
10. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 66
Palo Alto Networks, Inc. (NASDAQ:PANW) is an American multinational cybersecurity company. Its security solutions, powered by Precision AI, accelerate the detection and remediation of security threats in an AI-first world.
In the last three months of fiscal 2024, Palo Alto Networks’ cybersecurity business grew 12% year-over-year, reaching $2.19 billion, $40 million above analyst expectations. Earnings per share (EPS) rose 5% to $1.51, beating forecasts by $0.10. The rapid adoption of its advanced security solutions signals strong future growth.
Such are the company’s positive prospects that on Mad Money’s Lightening Round, Jim Cramer has affirmed that Palo Alto Networks, Inc. (NASDAQ:PANW) is a “good one”. Moreover, on October 11, 2024, Morgan Stanley analyst Hamza Fodderwala maintained the stock with an Overweight rating, raising the price target from $390 to $421. The firm had hosted Palo Alto CEO Nikesh Arora for a meeting, after which it concluded that the overall tone was “encouraging”, and also noted a positive outlook on the company’s progress with larger platform deals, accelerating product cycles, and AI-driven efficiencies.
9. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 69
Snowflake Inc. (NYSE:SNOW) is a cloud-native data warehouse company that leverages cutting-edge technologies like machine learning (ML), artificial intelligence (AI), and generative AI to enhance data-driven decisions. The SnowFlake Platform, a single, fully managed platform that powers the AI Data Cloud, enables enterprises to automate data management, governance, security, availability, and data resiliency. The company’s data cloud is used by more than 10,000 companies to run their businesses with AI, data, and applications.
Snowflake Inc. (NYSE:SNOW) hasn’t attracted the right attention from investors in the previous months. Falling over 40% in the current year and losing more than two-thirds of its value, there has been a certain negativity around the stock. This is true despite the company delivering topline performance in the current period on the back of its cloud data warehousing business that allows its customers to consolidate their data and generate insights. One reason explaining the negativity and stock falling sharply following the modest beat is that its guidance failed to impress investors.
Despite this, Trefis, a financial community led by MIT engineers and Wall Street analysts, considers cloud computing as one of the “sunshine sectors”. Goldman Sachs agrees, stating how so-called “platform” stocks are currently the most attractive part of the AI sector. Revisiting their “four phases of AI”, the team of Goldman analysts led by Ryan Hammond examined which stocks would yield the best results in the coming months. The “platform” stocks such as SNOW are “an attractive subset of the Phase 3 cohort because they will be primary beneficiaries of the next wave of generative AI investments”.
8. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 81
ASML Holding N.V. (NASDAQ:ASML) is a semiconductor company that develops, produces, markets, sells, and services advanced semiconductor equipment systems for chipmakers. This company provides the world’s leading chipmakers with the power to mass-produce patterns on silicon, thereby helping them make their chips faster, smaller, and greener.
In a recent turn of events, this tech company and key supplier of chip-making equipment accidentally published its Q3 earnings report a day early on Tuesday, October 15th. Following the accidental release, ASML stock plunged 16% on the back of weaker-than-expected bookings as well as a reduced sales forecast for 2025. While the Dutch company posted strong third-quarter results, they were dampened by lower-than-expected net bookings of €2.6 billion, falling short of forecasts that ranged between €4 billion and €6 billion.
“ASML’s fat finger error isn’t cause for concern in itself, but the content of the release didn’t make comforting reading for investors”.
-Derren Nathan, head of equity research, Hargreaves Lansdown.
ASML’s reduced 2025 net sales guidance, driven by delays in EUV demand, alarmed investors and shook the market.
“While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness”.
-CEO Christophe Fouquet said in the news release.
7. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 97
ServiceNow, Inc. (NYSE:NOW) is an American software company that offers end-to-end intelligent workflow automation platform solutions for digital businesses. The company has been enhancing its productivity with the help of AI, quoting how Al should have an $11 trillion impact on the economy, with the company remaining at the forefront of this transformation.
On October 10, 2024, BMO Capital Markets analyst Keith Bachman increased its price target on ServiceNow, Inc. (NYSE:NOW) shares to $1,025.00 from the previous $860.00. Its “Outperform” rating retention on the stock is a reflection of BMO’s increased confidence in the company’s sustained growth potential.
Analysts express increased confidence in ServiceNow, Inc. (NYSE:NOW) sustained growth, noting the company’s strong position to continue expanding in the core IT Service Management sector while also venturing into new product areas. They highlight the potential to leverage its significant existing customer base to generate additional sales opportunities.
6. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 107
Adobe Inc. (NASDAQ:ADBE) is an American computer software company offering digital media and digital marketing solutions. The company leverages AI built into its tools for seamless integration into workflows customers are already using. On October 14, 2024, at the Adobe MAX 2024 Conference, the company launched more than a hundred new Creative Cloud features as well as introduced significant updates powered by its AI model, Adobe Firefly. Launched only last year, Firefly has already been used to generate over 13 billion images, a reflection of its widespread adoption.
Morgan Stanley maintains an Overweight rating and $660 price target, highlighting Adobe’s unique positioning in GenAI through integrated content creation and compliant AI models.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) is an American multinational corporation operating as a semiconductor company worldwide. The company is trying to establish itself as a key player in AI-powered personal computers (AIPCs), driving innovation in hardware to support advanced, next-generation applications. By integrating technology across CPUs, GPUs, and NPUs, it strives to create a strong ecosystem that supports the development of powerful AI applications.
AMD held its Advancing AI 2024 event on October 10, 2024. At its AI event in San Francisco, AMD revealed its latest AI data center processors and new PC and server chips. In particular, the MI325X chip, built on the same architecture as the MI300X, incorporates a new memory variant designed to accelerate AI-related tasks. Vendors like Super Micro Computer (NASDAQ: SMCI) are expected to begin shipping AMD’s new AI chip to customers in Q1 2025. AMD aims to use the chip to compete with Nvidia’s Blackwell AI chips. AMD also plans to launch its next-gen MI2350 chips that will be more powerful than the MI325 series chips.
Regardless, the stock’s share ended the day down by 4% following the AI event. As per Bernstein Research analysts, its GPU faces a “Zero challenge” against Nvidia’s upcoming Blackwell chip.
“Even the company’s MI350X tease shows raw performance that, while on par with Blackwell on paper, arrives a year later, just in time to compete against Nvidia’s next offerings. Hence we do not see even AMD’s accelerated road map closing the competitive gap.”
– Bernstein Research analysts.
Vivek Arya, research analyst at Bank of America Securities, further notes how there is “no near-term catalyst to change the dynamic” between the company and its chip rivals.
“Training performance seems 1 year behind Blackwell (on par with H200) while inferencing is only slightly better”.
-Vivek Arya
On the other hand, Jefferies and Bank of America both maintained Buy ratings for the stock as of Friday (October 11), with price targets of $190 and $180, respectively, while 13 of 17 analysts tracked by Visible Alpha also rated it a “buy,” with a consensus target of $192.13.
In other news, the US is weighing on capping exports of AI chips from both Nvidia and AMD on a country-specific basis. This move is going to limit some countries’ artificial intelligence capabilities. Officials are particularly focused on Persian Gulf countries, and discussions are still in the early and fluid stages, but interest in the policy has increased recently. Last month, Commerce Department officials introduced these regulations, with more rules expected in the future.
4. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology, Inc. (NASDAQ:MU) is a global leader in innovative memory and storage solutions. In the fourth quarter earnings call, CEO Sanjay Mehrotra highlighted the firm’s commitment to converting AI demand into stakeholder value. He reported strong data center demand, healthy inventory levels, and projected mid- to high single-digit growth in server shipments for 2024 that are driven by AI servers and modest growth in traditional servers. Additionally, he noted an increase in DRAM and NAND content in both server types.
Analyst Joseph Moore from Morgan Stanley maintained a Hold rating on Micron (MU) with a price target of $114. He highlighted a mix of factors influencing Micron’s outlook, including concerns about the memory cycle. However, Micron is optimistic about its competitive position by 2025. The company’s revenue nearly doubled to $7.75 billion in fiscal Q4, exceeding analysts’ expectations. CEO Sanjay Mehrotra attributed the growth to strong demand for AI, stating that the company is entering fiscal 2025 with its strongest competitive position ever.
3. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) is a global technology leader that develops, manufactures, and globally supplies a wide range of semiconductor and infrastructure software products. The company has had a strong FQ3 2024. It reported revenues rising 47% to $13.1 billion, fueled by strong demand for AI semiconductor solutions and VMware.
On October 14, 2024, Mizuho Securities adjusted its outlook for Broadcom Limited (NASDAQ:AVGO). It raised its price target to $220 from the previous $190 while maintaining an Outperform rating. Analysts at Mizuho have revised their price target upwards on the back of the company’s potential revenue from its collaboration with OpenAI on custom AI chips.
Mizuho Securities analyst Vijay Rakesh believes that the company’s current stock price isn’t fully reflective of its AI potential. In particular, Broadcom Inc. (NASDAQ:AVGO)’s silicon business, which includes application-specific integrated circuits (ASICs), enables customers to develop specialized solutions tailored to their needs. The analysis reveals that the partnership could potentially unlock more than $16 billion opportunity for Broadcom Inc. (NASDAQ:AVGO). In addition, the ASIC market is expected to exceed $56 billion in the coming years, which makes it a large opportunity.
2. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwanese multinational semiconductor contract manufacturing and design company. It is the main producer of advanced chips used in artificial intelligence applications. The world’s largest contract chipmaker has been benefitting from the surge in AI and is expected to report a 40% leap in third-quarter profits.
According to SmartEstimate, TSM’s net profit is estimated to be T$298.2 billion or equal to US$9.27 billion at the end of the third quarter. The company is benefiting from the AI boom, as major tech clients like Apple, Nvidia, AMD, Qualcomm, and Mediatek rely heavily on its technologies. In response, TSM’s shares have surged. The company is also expanding its global reach with new factories in Arizona, projected to cost $65 billion, and plans to expand in Europe.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
Leading the way in AI computing, NVIDIA Corporation (NASDAQ:NVDA) is a star AI stock. It is not only the leader in the AI chip market but has built a comprehensive AI ecosystem that spans graphics, computing, and networking solutions. Its GPUs are the backbone of AI innovation globally, powering everything from advanced data centers to autonomous systems.
TD Cowen Analysts further reiterated its $165 price target for Nvidia, calling it its top pick amidst surging demand for its new supercomputing AI chips, Blackwell. Stocks tied to the chipmaker, such as Arm Holdings (ARM), TSMC (TSM), and Nvidia-backed Soundhound AI (SOUN) also gained on October 14, 2024; leading the S&P 500 to a record high.
Morgan Stanley analyst Joseph Moore has reiterated Nvidia as a “top pick,” with a Buy rating and a price target of $150 per share. According to Morgan Stanley analysts, its new Blackwell AI chips are so much in demand that production is reportedly booked out for the year. Moreover, the company’s exceptional stock performance is supported by strong revenue growth that has tripled over the past four quarters.
While we acknowledge the potential of 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 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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