In this article, we discuss the 19 trending AI stocks on latest analyst ratings and news.
Artificial intelligence (AI) is the new buzzword that is attracting the attention of almost everyone on Wall Street. The sector, characterized by rapid growth, significant investment, and intense competition, has witnessed a surge in venture capital (VC) funding over the past few months. In 2023, global VC investment in AI startups exceeded $94 billion. This surge in funding reflects the strong belief that these investors have in the transformative potential of AI across various industries. Merger and acquisition activity in the field is also on the rise, with more than 1,100 such deals in 2023 alone. Larger tech companies are actively acquiring AI startups to bolster their capabilities in the shortest time possible.
Some sector-specific numbers highlight the AI potential in minute detail. For example, in the healthcare universe, the AI healthcare market is projected to reach $102 billion by 2028, with startups focusing on diagnostics, drug discovery, and personalized medicine. In finance, AI-driven financial services are expected to reach a market value of $26.67 billion by 2026, with startups focusing on fintech, fraud detection, and algorithmic trading. In the retail world, AI is revolutionizing through personalized shopping experiences and supply chain optimization, with the sector projected to grow at a 34.4% CAGR by 2030.
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.
Hedge fund interest in AI has increased in the past few months, an indication of the long-term growth potential of the industry. During routine interviews with the media, investor conferences, and through their 13F activity, hedge fund managers have detailed their bullish views on AI. For example, Bill Ackman, the chief Pershing Square Capital Management, has said that AI startups represent the next frontier in technology, offering unparalleled opportunities for innovation. He adds that the key is finding those with a clear vision and the ability to execute in a rapidly evolving landscape.
Similarly, Ray Dalio of Bridgewater Associates is of the opinion that the impact of AI on industries is undeniable, and the startups driving this change are in a unique position to capitalize on it. Dalio adds, however, that it’s crucial to invest in those that are building sustainable, ethical models, as they will be the long-term winners. Paul Tudor Jones of Tudor Investment Corporation believes that AI startups are not just about tech but about transforming entire industries. He notes that the challenge is in navigating the hype and identifying the true innovators who have the potential to disrupt established markets.
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).
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Trending AI Stocks on Latest Analyst Ratings and News
19. 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. The company offers ethernet solutions for AI data centers, ensuring high throughput and low latency. It is competing with similar products made by Broadcom, and the InfiniBand of NVIDIA. The latter is becoming popular because it comes bundled with NVIDIA GPUs, which hyperscalers are using to power their AI data centers. Ethernet is a cheaper solution to the NVIDIA product, a fact already highlighted by Meta Platforms earlier this year.
Arista Networks, Inc. (NYSE:ANET) has the potential to disrupt some of the NVIDIA business in the networking domain. Jefferies analyst George Notter recently raised the price target on the stock to $380 from $340 and kept a Buy rating, noting that the company previously talked about having won four out of five major Cloud trials for AI/back-end networking, and a fifth customer, possibly Microsoft, might trial with Arista, giving credence to claims that the firm can displace some InfiniBand usage at the account.
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. In the latest earnings report, the firm showcased strong growth in the AI server and networking portfolios. During the second quarter, AI server revenue surged to 12.4% of total revenue, with a record $3.8 billion backlog. The firm expects 14% revenue growth this fiscal year, primarily from AI servers, with normalized revenue growth projected at 9.3% in the next fiscal year. Furthermore, a strategic divestiture of SecureWorks could yield $400 million for AI initiatives.
Following the earnings results, Dell Technologies Inc. (NYSE:DELL) received bullish reviews from Wall Street. Raymond James kept an Outperform rating on the shares with a price target of $160, noting that strong AI shipments and improved ISG segment operating margin should outweigh flat AI backlog and a slightly lower PC forecast for the firm. In an investor note, the advisory added it would not be shocked by a greater appreciation of the stock in the near-term.
17. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. The company missed market estimates on revenue and earnings per share in the latest earnings report. This, combined with other factors like recent layoffs, dividend cuts, and capex reduction, are likely to weigh on investor sentiment for the near term even as the chipmaker tries to make headway in the production of AI-capable chips. In the long term, the firm plans to compete with chip firms like TSM with massive investments in foundry. However, due to geopolitical tensions, these investments have been made in high cost regions, impacting near term profitability of the firm.
Intel Corporation (NASDAQ:INTC) has thus been viewed with bearish leanings on Wall Street. Mizuho analyst Vijay Rakesh recently downgraded the stock to Neutral from Outperform with a price target of $22, down from $36. In an investor note, the analyst detailed that Intel had continued to lag peers and was losing share in all key markets through 2025. The analyst, however, noted that there was longer term potential for foundry and 18A tailwinds, but regaining lost leadership would be challenging.
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 firm 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
Wall Street analysts were bullish on QUALCOMM Incorporated (NASDAQ:QCOM) following the release of the earnings. Rosenblatt raised the price target on the stock to $250 from $240 and kept a Buy rating, underlining 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 chipmaker was well positioned.
15. 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 firm is one of the most well-positioned in the semiconductor equipment market to take advantage of the AI boom, driven by growth in HBM, DRAM, and advanced packaging. Some of the factors expected to hold the firm in good stead include investments in advanced technologies and energy-efficient computing solutions. With 5.5% revenue growth and 7.4% adjusted operating profit growth in the latest quarter, the firm has guided revenue forecast of $27 billion for this fiscal year.
Applied Materials, Inc. (NASDAQ:AMAT) is a key AI stock according to market experts. B Riley has a Buy rating on the stock with a price target of $280. In an investor note, published after the release of the earnings report of the chipmaker, the advisory noted that there was a buy the dip opportunity on the post-earnings selloff, calling the chipmaker the sector bellwether.
14. 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 is involved in the manufacture and marketing of connectivity products for AI data centers, which include 400G and 800G switches, and storage solutions. Some big tech firms are customers of these products, including Google and Amazon. The annual revenue of the firm is estimated to be around $8 billion this year, the highest it has been in over a decade. The revenue from generative AI and machine learning for the company comprises over $1.2 billion, more than triple from 2022, before the AI wave swept the market.
In the second quarter earnings call, Rob Mionis, the CEO of Celestica Inc. (NYSE:CLS), noted that there was strong demand for the Hardware Platform Solutions marketed by the firm, comprising storage, compute, and networking products. This healthy demand, likely to increase in the coming months as hyperscalers invest in AI data centers, had helped the firm post a more than 50% year-to-year increase in connectivity revenues in the second quarter.
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 firm has technological superiority in the AI race. It is the only company in the world that offers customers options regarding 5nm and 3nm advanced nodes. In other words, the chips that the firm produces are faster, more efficient, and take up less space than the products of competitors. In the past few years, smartphone makers like Apple have been the biggest customers of the firm. But as AI capex rises, AI firms are also shopping around for the best chips. There are rumors that TSM will begin production of 1.6nm chips in 2026 as competitors like NVIDIA transition to 3nm nodes.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the favorite AI stocks in the finance world. Bank of America recently raised the price target on the stock to NT$1,200 from NT$1,160 and kept a Buy rating, highlighting that the chipmaker had lifted 2024-26 earnings forecasts by 3%-5% to reflect stronger results, a better Q3 margin outlook, and tighter-than-expected CoWoS/N3/N5 supply into 2026.
12. Micron Technology (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology (NASDAQ:MU) makes and sells memory and storage products. The compute and network business unit of the firm is heavily exposed to cloud and AI. In the latest earnings call, the firm highlighted that robust demand for AI servers was a key driver of the strong financial performance of the company in the third fiscal quarter. As hyperscalers continue to ramp up capex in light of increasing data center needs, the demand for Micron products is likely to become even stronger. One indicator of this demand is that Micron has sold out high bandwidth memory capacity until 2025, even before the fiscal year 2024 comes to a close.
Micron Technology (NASDAQ:MU) has invited bullish commentary from Wall Street analysts in recent weeks. Argus analyst Jim Kelleher recently raised the price target on the stock to $170 from $140 and kept a Buy rating, underlining that the company reported fiscal Q3 revenue above the high end of its guidance range, while posting solid non-GAAP profits that topped expectations. The analyst added that the sales and profits are forecast to maintain strong with memory prices rising and demand broadly recovering.
11. 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 company has grabbed the attention of AI investors with the development of CSS architecture for AI-enabled chips. This new design is already being adopted by major hyperscalers, who are customers of Arm, including tech giants like Microsoft, Oracle, and Amazon, among others. The new designs offer speed, reliability, and power reduction compared to previous iterations, and also present a significant growth opportunity that is expected to take the firm well beyond their smartphone-entrenched market.
Wall Street has been following these developments related to Arm Holdings plc (NASDAQ:ARM) closely. Daiwa recently upgraded the stock to Outperform from Neutral with a $130 price target. In an investor note, the advisory stated that while the valuation of the firm was still high, the next 90 days would see Arm shares move back higher as fears of a recession recede and the Fed starts to cut rates.
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 shown excellent growth patterns in the past few months. Over the past year, the shares have gained more than 124%, beating the benchmark S&P 500 by a handsome 96%. This outperformance has been driven by a focus on AI products and the leap towards monetization at scale in this regard. These AI revenues have helped the firm post solid financials so far this year. The core strength of the firm is in tech expertise in advanced data integration and analytics platforms, like Gotham and Foundry, which cater to government and commercial sectors.
Palantir Technologies Inc. (NYSE:PLTR) has started turning heads on Wall Street. Northland recently initiated coverage of the stock with a Market Perform rating and $35 price target. In an investor note, the advisory highlighted that the artificial intelligence operating system of Palantir, powered by the Ontology software, had overcomes myriad roadblocks to adoption and was igniting AI use across the enterprise landscape.
9. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. The firm has made a name of itself in the AI world by offering companies the option to design custom AI chips tailored to their specific needs. This strategy has translated into earnings. In the recent earnings report, the company reported an EPS of $10.96, beating market estimates by $0.12. The revenue over the period was $12.49 billion, up 43% year-on-year and surpassing analyst expectations by a whopping $480 million. The company reported a healthy cash flow of approximately $4.45 billion, equating to 36% of sales.
This performance has earned Broadcom Inc. (NASDAQ:AVGO) many fans on 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. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 92
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. AI data center demand has helped fuel a massive rally in the utilities sector. This is evident by the fact that the S&P 500 utility sector more than doubled the returns of major market indexes and other sectors of the economy during August. Over the month-long period, a basket of utility stocks returned close to 5.3% to investors, compared to the 2.2% return of the S&P 500 and the 1.76% return of the Dow Jones Industrial Average. As the demand for power rises and prices go up, this growth momentum in the utility world is likely to persist for several months.
Vistra Corp. (NYSE:VST) is viewed in a bullish manner by Wall Street. Morgan Stanley recently raised the price target on the stock to $110 from $109 and kept an Overweight rating, highlighting that in July, utilities had outperformed the 1.22% return of the S&P by 560 bps, and the strong and stable free cash flow of Vistra was underappreciated at the current price.
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 share price of the company has registered a steep drop since it announced earlier this week that it would not be able to complete a 10-K regulatory filing on time. However, the company sought to ease investor concerns regarding accounting irregularities in a statement released yesterday. In the press release, the management said that it did not expect any material changes to the numbers for the 2024 fiscal year despite not being able to file the report on time.
Following the confirmation of a delayed filing from Super Micro Computer, Inc. (NASDAQ:SMCI), several analysts on Wall Street have revised their ratings on the stock. Bank of America recently moved the rating on Supermicro to Under Review, noting that the delay in filing and any potential internal control findings from the review leads to more uncertainty, leaving the advisory unable to assess the fundamentals of Supermicro.
6. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. It is hard to find established technology companies that offer a reliable path to AI growth. Microsoft, however, is an exception. The firm recently released results for the fourth fiscal quarter of 2024, topping market expectations on revenue by 15% year-on-year growth and operating income that came close to $28 billion. For those looking at ROI on AI, the numbers for Azure painted a healthy pattern, with AI workloads contributing to 30% year-on-year growth in the segment. The services and GitHub Copilot showed strong performance as well. Although the long-term outlook remains rosy, AI capex is likely to weigh on investor sentiment in the near term.
Microsoft Corporation (NASDAQ:MSFT) is one of the favorite AI stocks on Wall Street. DA Davidson recently maintained a Buy rating on the shares with a price target of $475, noting that the commentary from management suggested that demand for AI services remained strong as Azure continues to gain market share, and Azure demand levels were likely to remain similar throughout the upcoming fiscal year.
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. There are very few tech stocks who have diversified in the manner that Alphabet has over the past few years. AI-related capital expenditures are another demonstration of this fact. The strong advertising and cloud business of the firm drive stable growth, while investments in the latest technology help the firm maintain a market-leading position in the tech world. The stock has returned handsomely, growing by more than 380% over the past decade. This represents a compound annual growth rate of over 19%.
Alphabet Inc. (NASDAQ:GOOG) is aggressively marketing Gemini, the virtual assistant powered by advanced AI features. New updates were recently released for this. Per Google, the new features allow users to customize Gemini to create personal AI experts on any topic. The firm, which offers advanced, business, and enterprise features for Gemini, is planning to launch the assistant in new languages as well.
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. It is considered one of the most influential companies in the world, with billions in daily active users across a host of social media platforms. The latest earnings report of the tech giant paints an interesting growth picture. The revenue and diluted earnings per share for Meta jumped in the second quarter this year, with a clear path for growth ahead as AI investments start returning. The firm has a net cash position of $40 billion, one of the highest in the tech space, and looks set to deliver cumulative returns of over 40% in the next two years.
Wall Street is also bullish on Meta Platforms, Inc. (NASDAQ:META) in the long term. Tigress Financial recently raised the price target on the stock to $645 from $575 and kept a Strong Buy rating, highlighting that the increasing cash flow of the firm was enabling ongoing investments in artificial intelligence initiatives that drove 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) engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. Latest reports reveal that Amazon will power the latest updates to Alexa, the virtual assistant it has been marketing for years, with the AI model of Anthropic, a California-based AI startup. The reports indirectly reveal the failure of in-house AI models at Amazon, with some sources that spoke to news agency Reuters claiming that the in-house AI models of Amazon have lag times of six or seven seconds and problems with consistency and accuracy. The tech giant will charge $5 or $10 per month for advanced AI features in Alexa.
Following the latest earnings release, Amazon.com, Inc. (NASDAQ:AMZN) earned an Overweight rating at Morgan Stanley with a price target of $210. In an investor note, the advisory highlighted that the mix shift toward lower average selling price and lower margin items, combined with a slower than expected ramp in high-margin advertising and cost to serve improvements, was weighing on profits of the tech giant more than expected.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Apple Inc. (NASDAQ:AAPL) is a consumer electronics firm. There has been lots of chatter around the company joining a funding round for OpenAI, a California-based AI startup that rose to fame after launching ChatGPT in late 2022. The latest estimates for the valuation of the startup place the worth of the firm at around $100 billion. Experts differ over the reasons that the tech giant might be investing in the company. Investment advisory Bank of America has detailed that a bigger Apple-OpenAI partnership might be on the cards if the former makes a large investment in the latter, possibly to rival Google in internet search.
Apple Inc. (NASDAQ:AAPL) has earned bullish reviews from Wall Street ahead of the release of the latest iPhones. Citi has a Buy rating on the shares with a price target of $255. In a recent investor note, the advisory named the firm as the top AI stock pick for 2025, noting that developer feedback on iOS18 beta artificial intelligence features, including the recently launched new photo feature to remove unwanted objects, points to AI as a compelling upgrade for iPhone refresh next year.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. The stock has been in the spotlight over the past few days after topping analyst expectations on earnings and guidance in the latest quarterly report. This outperformance, coming in the wake of investor concerns around the production ramp for the latest AI chip named Blackwell, outlines the solid demand for non-Blackwell chips that the company markets, the most notable of which is Hopper. Wall Street analysts reiterated their bullish forecasts for the chipmaker following the earnings report, with Daniel Ives from Wedbush leading this charge.
Ives hailed NVIDIA Corporation (NASDAQ:NVDA) as the torch bearer of the AI revolution, with the results and guidance a drop-the-mic moment. Ives, who has been particularly bullish on the company in the past few months, underlined that AI GPU demand was way outstripping supply for NVIDIA at this juncture, and Wall Street should view these results as a very bullish indicator for the broader tech sector with more shock and awe rather than a shrug of the shoulders.
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.
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