In an unexpected move, China is reportedly telling companies to refrain from using Nvidia’s H20 chips after the chipmaker was recently granted approval to resume shipping.
According to a Bloomberg report, authorities have told companies to avoid using the Nvidia chips, or those from AMD, for government and national security use cases.
Nvidia and similar companies were previously banned from exporting chips to China, but the Trump administration had recently granted approval for selling the chips in exchange for a stipulated percentage of the revenues.
Even though China is now refraining from using the chips for government and national security use cases, Trump has recently called out Nvidia’s H20 chip as being “obsolete.” He also noted that he wouldn’t allow the higher-end Blackwell shipments there without a 30% to 50% decrease in performance.
Over the weekend, a social media account connected to Chinese state media stated that the H20 chips are not “safe.”
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 Q1 2025.
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10. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 18
SoundHound AI, Inc. (NASDAQ:SOUN) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, Ladenburg Thalmann analyst Glenn Mattson upgraded the stock from Neutral to Buy with a price target of $16.00 (from $9.00). The rating upgrade comes after Soundhound posted second-quarter revenue well above expectations driven by its large contract wins.
According to the firm, momentum in core verticals is helping offset previous concerns about low-margin contracts from the Amelia acquisition. These are anticipated to be phased out over the next 18 months.
It believes that SoundHound is building a broader platform that may link automotive, restaurant and enterprise customers into a voice-enabled ecosystem. This will in turn create lead-generation revenue streams.
“We upgrade shares to Buy and raise our PT to $16 (from $9). We continue to view Voice as one of the key early applications for AI systems. The company is a leader in this space and is adding significant utility for enterprises looking to adopt AI functionality. The Amelia acquisition still needs further integration but is providing solid benefits in terms of scale, new lead generation, and an entry into the enterprise. While valuation remains elevated, the growth and scale justify that premium, in our view. We now use a 22x multiple on our new 2027 estimate to achieve our $16 PT. This is justified by the rule of 40 peer set found in the body of the report.”
SoundHound AI, Inc. (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses.
9. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 24
C3.ai, Inc. (NYSE:AI) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, Wolfe Research analyst Gal Munda reiterated an Underperform rating on the stock with a $15.00 price target. The rating affirmation follows the company’s first quarter fiscal 2026 results.
On Friday, the company reported that it sees preliminary revenue of $70.2 million-$70.4 million, an estimated 33% below the midpoint of its previous Q1 guidance for $100 million-$109 million.
The adjusted operating loss will be $57.7 million-$59.9 million, almost twice as bad as the $23.5 million-$33.5 million loss that the company had expected.
Company CEO Thomas Siebel said that sales results during the quarter were “completely unacceptable” but driven by “disruptive effect” of the reorganization and his ongoing health issues.
Wolfe Research noted that it believes F1Q26 results have been a “negative surprise that will likely drive shares materially lower despite the restructuring of the sales organization.”
“In July, the company announced a search for a successor to the CEO, and in the 8-K filing (link to filing here), it did not reiterate guidance, which we viewed as a risk to expectations. We believe F1Q26 results were a negative surprise that will likely drive shares materially lower despite the restructuring of the sales organization. Given the disappointing F1Q26 results, we believe FY26 revenue guidance could be revised significantly lower or potentially pulled entirely. Reiterate UP and $15 PT. “
C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company involved in building and operating enterprise-scale AI applications and accelerating digital transformation.
8. Atlassian Corporation (NASDAQ:TEAM)
Number of Hedge Fund Holders: 44
Atlassian Corporation (NASDAQ:TEAM) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, Stephens analyst Brett Huff lowered the price target on the stock to $202.00 (from $221.00) while maintaining a Equal Weight rating.
The price target cut follows Atlassian’s mixed 4Q, guided FY1Q light, and guided mixed FY26.
Despite the PT cut, Stephens pointed out to several factors supporting the stock:
“(1) data refuting worry that developer AI coding tools will slow growth
(2) getting FY26 guide done w/o too much pain/deceleration (+18% YOY)
(3) a reiteration of FY27’s >20% total rev CAGR growth guide,
(4) commentary/data giving confidence in multiple growth drivers to keep TEAM in high teens growth range LT
(5) some worry got built when stock traded down ~8% in trading session before reporting AMC yesterday. “
The firm believes that AI-related demand fears are overblown and stock price is reasonable. Nevertheless, it isn’t going against market sentiment considering much of the growth is being pushed to later years.
“While we think AI-driven seat headwind fears are overblown and despite more reasonable valuation (trading 6.3x EV/FY2E rev), we don’t want to fight sentiment driven by AI and back-half loaded/FY27-loaded growth needed to meet guidance, so remaining EW. Updating target from $221 to $202 (based on 7.6x EV/FY2 rev vs. post-COVID 10.6x average).”
Atlassian Corporation (NASDAQ:TEAM) is a global software company that designs, develops, licenses, and maintains various software products worldwide.
7. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 62
Fortinet, Inc. (NASDAQ:FTNT) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, Susquehanna lowered the firm’s price target on the stock to $80 from $110 and kept a Neutral rating on the shares.
According to the firm, Fortinet delivered a fine 2Q and raised its guidance across most metrics. The firm likes the company, its market opportunity, and large firewall refresh cycle, the risk/reward appears balanced at current levels.
Fortinet, Inc. (NASDAQ:FTNT), a cybersecurity company, provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products.
6. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 63
Dell Technologies Inc. (NYSE:DELL) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, the company announced updates to its Dell AI Data Platform, helping customers better support the full lifecycle of AI workloads.
The AI Data Platform aims to enhance unstructured data ingestion, transformation, retrieval and compute performance to streamline AI development and deployment so that massive datasets can transform into reliable and high quality real-time intelligence for generative AI.
Dell has also introduced an unstructured data engine developed in collaboration with Search AI leader Elastic to improve data processing capabilities for enterprise artificial intelligence applications. The unstructured data engine aims to offer real-time, secure access to large-scale unstructured datasets for inferencing, analytics, and intelligent search.
Developed in collaboration with open-source Search AI leader Elastic, the data engine will provide customers advanced vector search, semantic retrieval and hybrid keyword search capabilities for powering AI applications.
The company also announced that its PowerEdge R7725 server with NVIDIA RTX PRO 6000 Blackwell Server Edition GPUs will be the first 2U server platform to deliver the NVIDIA AI Data Platform reference architecture. Together, Dell and the NVIDIA AI Data Platform reference design will provide a GPU-accelerated reference architecture for AI.
“The key to unlocking AI’s full potential lies in breaking down silos and simplifying access to enterprise data. Collaborating with industry leaders like NVIDIA and Elastic to advance the Dell AI Data Platform will help organizations accelerate innovation and scale AI with confidence.”
-Arthur Lewis, president, Infrastructure Solutions Group, Dell Technologies.
Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
5. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 83
Constellation Energy Corporation (NASDAQ:CEG) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, Raymond James analyst J.R. Weston raised the price target on the stock to $393.00 (from $391.00) while maintaining an Outperform rating.
Raymond James rating affirmation is a reflection of Constellation’s market leadership as the nation’s largest clean energy producer, largest nuclear fleet operator, and largest commercial-industrial retail book holder.
The company is also involved in two of the three nuclear data center deals announced to date, exemplifying its robust base business even without new deals. Two factors will be fueling Constellation’s double-digit EPS growth through 2030.
“The company expects double-digit EPS growth through 2030, fueled by its nuclear fleet and surging clean energy demand. Closure and integration of private merchant generator Calpine (recently approved by both FERC and Texas regulators) will provide a catalyst stream, enhancing this low-capex story with major financial optionality through buybacks. In a high-flying subsector, CEG’s +45% YTD performance and +177% gains since January 2024 reflect its premium valuation as an established nuclear leader. We maintain our Outperform rating.”
Constellation Energy Corporation (NASDAQ:CEG) is an energy provider specializing in clean, carbon-free energy solutions.
4. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 96
Micron Technology, Inc. (NASDAQ:MU) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, Wolfe Research analyst Chris Caso reiterated an Outperform rating on the stock with a $160.00 price target. The rating reiteration follows Micron pre-announcing its fiscal Q4 results ahead of a competitor conference.
Micron revealed that revenue would be approximately $500 million higher than previously expected, with gross margins about 250 basis points better than previous guidance. Better pricing, particularly in DRAM products, has driven the noted improvements.
EPS guidance has been raised from $2.50 to $2.85, with continued demand for data center and AI products. While HBM traction is strong, some investors remain cautious about the second half of the year due to the effect of potential pull-ins on the 2H CY25 outlook and the likelihood that Samsung qualifies on HBM4/Rubin at NVDA.
“The positive preannouncement and pricing commentary however indicate – so far, so good. More following the company’s presentation. Details. MU updated its previous guidance for its F4Q25, indicating that the midpoint of its revenue guidance is expected to be ~$500mn above its prior expectations, driving an additional ~250bps GM at the midpoint. In addition, MU anticipates OpEx to be a touch above its prior guidance, now $1.22bn (vs prior $1.20bn), driving implied OpM ~280bps higher than previous guidance to ~33.6%. EPS guidance was increased to $2.85 from $2.50. MU noted the revised guidance reflects improved pricing, particularly in DRAM, and strong execution.”
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.
3. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 102
Vistra Corp. (NYSE:VST) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, CFRA analyst Daniel Rich raised the price target on the stock to $230.00 (from $215.00) while maintaining a Buy rating. The firm maintains a positive outlook toward nuclear operators and particularly assigns a premium valuation for Vistra to reflect its strong growth expectations compared to regulated utilities.
The firm noted that the Lotus Infrastructure gas generation acquisition announced in May 2025 will likely close in Q4 2025 of early Q1 2026. While broad-based tariff concerns did result in a major draw down of the shares, they have since recovered.
“We anticipate that the Lotus Infrastructure gas generation acquisition will close in Q4 2025 or early Q1 2026, helping VST capture upside from rapidly rising electricity demand trends. Shares have recovered to near all-time highs after a significant drawdown in Q2 based on broad-based tariff concerns, and we look favorably on the company recently raising 2026 EBITDA guidance, which we note is not inclusive of potential upward adjustments due to the Lotus Infrastructure deal.”
The firm also emphasized that nuclear power is one of the relative “winners” under the OBBB legislation.
“We also see nuclear power as one of the relative “winners” under the OBBB legislation, with tax credits maintaining their long-term status under the original IRA provisions. We expect roughly 11% EPS CAGR (on a GAAP basis) and 8% dividend CAGR from 2024-2027.”
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 104
Tesla, Inc. (NASDAQ:TSLA) is one the 10 AI Stocks Analysts Are Watching Closely. On August 12, Guggenheim analyst Ronald Jewsikow reiterated a Sell rating on the stock with a $175.00 price target. The firm said that it is sticking with its sell rating and that it is cautious on the company’s full self-driving.
CEO Elon Musk unveiled some important updates around both the Robotaxi operations in Austin and the upcoming FSD model. The updates were made in a series of posts on X over the weekend.
While Tesla shares “somewhat paradoxically” rallied on the news, names like Uber and Lyft who were previously sensitive to Tesla autonomy, did too. The firm considers this as “mixed signals from the market.”
“On the Robotaxi operations in Austin, CEO Musk indicated it would be open to the public next month, which we believe is earlier than investor expectations and a sign of confidence in the service and feedback from the invite-only riders to date. We believe the expanded FSD model has positive implications for bulls focused on the potential for TSLAs fleet eventually becoming Robotaxis (positive read on inference compute), and the opening of the Austin Robotaxi experience to the public is a key step on the growth path of inviting a potentially more critical set of consumers. While safety drivers will remain, and no timeline has been provided for their removal, bulls have been willing to overlook the optics of safety drivers in TSLA vehicles, and we see no reason why that would change now.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advance.d artificial intelligence in its autonomous driving technology and robotics initiatives.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the 10 AI Stocks Analysts Are Watching Closely. On August 11, Freedom Broker analyst Egor Tolmachev raised the price target on the stock to $255.00 (from $240.00) while maintaining a Hold rating.
The investment bank noted how Amazon has delivered strong financial results for the second quarter, surpassing both market expectations and its own guidance across all segments. Retail efficiency gains were particularly noted.
The firm did note that AWS performance was mixed and Q3 profit forecast was cautious. Nevertheless, it revised its financial forecast based on its confidence in the company’s ability to mitigate geopolitical risk and monetize continued logistics improvements.
“Q3 guidance came in well above revenue expectations but below profit forecasts, marking a second area of perceived weakness in the release. We view this as prudent management positioning in light of heightened geopolitical uncertainty. We have revised our financial forecasts upward, reflecting confidence in Amazon’s ability to mitigate geopolitical risk and monetize continued logistics improvements. Despite the negative share price reaction, we see upside potential and reiterate our Buy rating, raising our target price from $240 to $255.”
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions.
While we acknowledge the potential of AMZN 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 AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 10 AI Stocks in the Spotlight Today and 10 AI Stocks Analysts Are Tracking Closely.
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