According to a report from Bloomberg News, ChatGPT founder OpenAI is looking for local partners to set up a data center in India with at least 1 gigawatt capacity.
The Microsoft-backed company has formally registered as a legal entity in India and begun building a local team.
Back in August, the company mentioned that it had plans of opening its first India office in New Delhi later in the year. The opening will allow it to expand in its second-largest market by user base.
Bloomberg said that while the timing and location of the plan remains uncertain, CEO Sam Altman may reveal the details when he visits the country in September.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q2 2025.
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10. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 33
Baidu, Inc. (NASDAQ:BIDU) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, Susquehanna analyst Shyam Patel raised the price target on the stock to $95.00 (from $85.00) while maintaining a Neutral rating.
The firm highlighted mixed 2Q results, with weakness in the online marketing business due to continued monetization headwinds from the transition to AI-powered search. However, the management remains optimistic about the long-term potential of AI search monetization.
“BIDU reported mixed 2Q results, with weakness in the online marketing business as it continues to face monetization headwinds from the transition to AI-powered search, though the company saw solid momentum in AI cloud. Despite the near-term headwinds from AI-powered search, management remained optimistic about the long-term potential for AI search monetization. While the valuation remains undemanding, we believe the stock is likely to remain rangebound, leading us to maintain our Neutral rating.”
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.
9. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 46
Fortinet, Inc. (NASDAQ:FTNT) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, Morgan Stanley analyst Meta Marshall downgraded the stock from Equalweight to Underweight with a price target of $67.00 (from $78.00).
According to the firm, Fortinet’s consensus estimates for FY26/27 would likely come under pressure as the company may not be able to sell as many firewalls. This will cause the name to be a “relative underperformer.”
Despite the company’s continued success in attaching additional products to its installed base, the firm believes the smaller-than-expected firewall refresh could result in downward revisions to future estimates, creating a headwind for the stock.
“We see FTNT as continuing to be successful with attaching additional products into their installed base, but with the firewall refresh turning out to be smaller than expected, we think FY26/FY27 estimates may need to come down, creating a headwind for the stock. With FTNT down 17% YTD, more than that since Q2 earnings, one might say the risk has already been priced in. However, with FCF multiple still in the low-to-mid 20s, for what we think could become a high-single digit grower post-refresh, we tend to look at the risk reward more negatively in the near term. Once downdraft in estimates is priced in, we could return to the name as we saw continued traction with US sales expansion, and upsell of additional SASE / SecOps products in the past few quarters, but for now we see shares likely to underperform on relative basis.”
Fortinet, Inc. (NASDAQ:FTNT), a cybersecurity company, provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products.
8. Astera Labs, Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holders: 56
Astera Labs, Inc. (NASDAQ:ALAB) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, Deutsche Bank analyst Ross Seymore raised the price target on the stock to $200.00 (from $160.00) while maintaining a Buy rating. The firm said that Astera Labs is optimistic on its positioning in artificial intelligence.
As per analyst Ross Seymore, Astera Labs, Inc. (NASDAQ:ALAB) took the opportunity at a recent Duetche Bank conference to highlight that the impressive capex from hyperscalers is continuing and there is also a diversification of its customer base and product offerings.
“The continued expansion of AI cluster sizes has increased the need for seamless connectivity and real-time diagnostics within data centers to focus on limiting processor idle time and increasing efficiency,” Seymore added.
Astera Labs, Inc. (NASDAQ:ALAB) also discussed how the increasing focus on total cost of ownership provides an “intriguing” opportunity due to a greater mix of custom silicon among hyperscalers.
“The culmination of these impacts has led to an impressive content increase from the inception of the company, going from ~$100 per accelerator on the back of its retimer business to now multiple thousands of dollars as its Scorpio series ramps.”
Astera Labs, Inc. (NASDAQ:ALAB) is engaged in the design, manufacture, and selling of semiconductor-based connectivity solutions for cloud and AI infrastructure.
7. Atlassian Corporation (NASDAQ:TEAM)
Number of Hedge Fund Holders: 64
Atlassian Corporation (NASDAQ:TEAM) is one of the 10 AI Stocks Analysts Are Backing Right Now. William Blair analyst Arjun Bhatia has reiterated their bullish stance on the stock, giving a Buy rating on August 18. The rating affirmation is a reflection of Atlassian’s growth potential and strategic positioning.
Several growth drivers are working in favor of the stock, such as an increased emphasis on cross-selling its extensive cloud offerings and the expansion of Jira Service Management beyond traditional IT service management use cases.
Cloud migrations are also leading to a major uplift, where Atlassian is also efficiently bundling and selling prepackaged solutions personalized to different user personas. Meanwhile, the company’s fiscal 2026 guidance appears conservative, signifying potential for upward revisions as the year progresses.
According to Atlassian, artificial intelligence is having a positive impact on the business, and there seems to be no negative impact from third-party AI tools. All of these factors together reinforce the buy rating toward the stock.
Atlassian Corporation (NASDAQ:TEAM) is a global software company that designs, develops, licenses, and maintains various software products worldwide.
6. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 77
Palo Alto Networks, Inc. (NASDAQ:PANW) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, Morgan Stanley analyst Keith Weiss raised the price target on the stock to $216.00 (from $210.00) while maintaining an Overweight rating.
The analyst not only resumed coverage, but also named Palo Alto as a Top Pick in the cybersecurity space. In an investor note, the analysts noted how the company has evolved from merely being a next-gen firewall provider to a comprehensive cybersecurity leader “spanning multiple domains.”
It is well-positioned in all areas of cybersecurity due to its strategic focus on platformization.
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity.
5. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 78
ASML Holding N.V. (NASDAQ:ASML) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, BofA Securities analyst Didier Scemama lowered the price target on the stock to EUR724.00 (from EUR755.00) while maintaining a Buy rating.
The firm believes that macroeconomic and tariff-related uncertainties could weigh on ASML’s near-term bookings.
“We lower our Q3/Q4 booking estimates to €3.5bn/€3.8bn from €4.6bn/€5.4bn on macro and geopolitical uncertainties. We think the lack of details around semiconductor tariffs as well as a weakening China WFE are delaying ordering decisions.”
The firm did note how customer wins at Samsung and Intel’s recent equity funding are encouraging, but said “the challenges facing these customers remain daunting.”
It also noted that strong AI capital expenditure has yet to fully translate into wafer fab equipment (WFE) orders.
“Ongoing strength in AI CAPEX has yet to translate into WFE orders given re-use of capacity for AI logic chips and uncertainty on HBM allocation. The stock trades on 20x/17.5x CY26/27E EV/EBITDA, below historical 26x median EV/EBITDA multiple, justifying our Buy rating. We lower our PO from €755 to €724 as we roll forward our PO from CY26E to CY27E on 20x EV/EBITDA, down from 23x CY26E prior (within historical range of 17x-38x). Reiterate Buy on attractive valuations and resilient lithography intensity.”
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
4. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 101
Alibaba Group Holding Limited (NYSE:BABA) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, Mizuho analyst Jason Helfstein raised the price target on the stock to $159.00 (from $149.00) while maintaining an Outperform rating.
The rating affirmation follows Alibaba’s earnings report, characterized by light revenue and EBITA due to divestures and increased investments. However, commerce and cloud are doing better due to robust demand and execution.
“BABA’s cloud growth should accelerate in the next two quarters driven by strong Gen-AI demand, and we continue to believe BABA processes the best Cloud assets in China to capitalize on significant industry growth ahead. We view BABA’s fundamentals incrementally healthier post the print. Looking ahead, we expect investment in Instant Shopping to remain elevated and management to continue to improve efficiency. We raise FY28 EBITDA estimate by 3% on better synergy outlook. Maintain Outperform and raise PT from $149 to $159, based on 9.5x our new FY28E EBITDA.”
Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 156
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, JPMorgan analyst Samik Chatterjee reiterated an Overweight rating on the stock with a $255.00 price target. The rating affirmation comes as the tech giant gears up for the fall iPhone launch event.
According to the analysts, iPhone launch details are typically well-telegraphed by the supply chain but the upcoming event may still surprise investors in terms of hardware changes and pricing.
“That said, the first public look at the new line up of iPhones, that will be supported by incremental AI features through the year, can still hold some surprises in relation to hardware changes as well as pricing that can in the current macro set up for potential upsides, which however will only be modest in magnitude when compared to prior inflections or super cycles.”
The firm believes two aspects have the potential to drive upside for the next fiscal year. First is the launch of the iPhone Air with a slimmer form factor that may appeal to a broader-than-expected consumer demographic.
The second aspect is the pricing for iPhone Air and the rest of the lineup, believed to play a major role in China market demand considering smartphones priced under CNY 6,000 ($840 USD) qualify for a 15% discount there. If Apple keeps enough models in the lineup, it may boost sales driven by subsidy support.
Apple is a technology company known for its consumer electronics, software, and services.
2. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, Cantor Fitzgerald analyst C.J. Muse raised the price target on the stock to $350.00 (from $300.00) while maintaining an Overweight rating. Broadcom remains a “Top Pick” for the firm.
Cantor anticipates a modest beat and raise driven by upside from Broadcom’s Semiconductor Solutions, particularly frm Custom Silicon.
It also sees continued demand for “Google’s next-gen TPU v6 (and upcoming v7p in 2H) ramps as well as a more meaningful ramp likely to come from Meta’s MTIA program in the October Q time frame.”
The company’s cyclical businesses will likely begin recovering in July while its infrastructure software business is expected to stay stable.
Based on this stronger outlook, the firm has raised the price target on the stock.
“Additionally, all eyes will turn towards any visibility of current AI Custom Silicon engagements converting into customers with high-volume ramps in sight. Furthermore, we look for confirmation of a recovery within the cyclical businesses beginning in the July Q, following nine sequential quarters of Y/Y declines and stability in the Infrastructure Software business. Overall, we believe that Custom Silicon revenues could potentially reach $25-30B in CY26 and $40B+ in the CY27 time frame, and outline a framework for stretch goal of $13 in EPS in CY27. We are raising our price target to $350 from $300 reflecting our rising confidence in 2027 earnings power, based on a ~30x multiple (discounted back by 12% vs. prior 30x CY26 stretch goal EPS of $10). We reiterate our Overweight rating and AVGO remains a TOP PICK.”
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
1. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks Analysts Are Backing Right Now. On September 2, DA Davidson analyst Gil Luria raised the price target on the stock to $190.00 (from $180.00) while maintaining a Neutral rating.
The analysts told investors in a research note that despite an ever-competitive AI accelerator market, Alphabet’s TPUs are the best alternative to NVIDIA. The gap between them has significantly closed over the past year.
“Even in an AI accelerator market that is becoming more competitive by the day whether via foreign participants or labs/hyperscalers developing their own chips, we continue to believe that Google’s TPUs remain the best alternative to NVIDIA, with the gap between the two closing significantly over the past 9-12 months. And during this time, we’ve seen growing positive sentiment around TPUs, particularly among our checks which are indicating to us that, should Google sell its systems externally to customers, demand would be there and specifically from notable frontier AI labs.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GOOGL and that has 100x upside potential, check out our report about this cheapest AI stock.
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