In recent news, it has come to light that Nvidia’s RTX6000D, its newest artificial intelligence chip custom-made for the Chinese market, has seen only tepid demand. In fact, some major tech firms have opted not to place orders for the chips.
According to people with knowledge of the matter, RTX6000D is being considered expensive for what it does. The tailor made AI chips is intended mainly for AI inference tasks. Sample testing have shown that its performance lags the RTX5090 – a chip banned by the U.S. for use in China.
A Reuters report has revealed that the RTX5090 is available through grey market channels at less than half the RTX6000D’s price which is around 50,000 yuan ($7,000).
Nvidia begun shipping the RTX6000D this week, with a spokesperson saying how the “market is competitive” and that “we offer the best products we can.”
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.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Freshworks Inc. (NASDAQ:FRSH)
Number of Hedge Fund Holders: 35
Freshworks Inc. (NASDAQ:FRSH) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On September 12, Needham analyst Scott Berg reiterated a Buy rating and $25.00 price target on the stock following the company’s Analyst Day.
According to the firm, Freshworks outlined building blocks to support its FY28 financial model, aiming for faster organic revenue growth and incremental FCF leverage to reach a “Rule of 45” framework.
The firm said that even though margin leverage seems highly achievable, there is risk sustaining 20% growth in the EX segment and scaling ITAM ARR beyond $100M.
Increasing deal sizes, more competitive products (i.e with Device42) and new partner motions are growth drivers for the stock.
“We attended Freshworks Analyst Day yesterday where the company detailed individual product building blocks to support its new FY28 financial model highlighted by modestly accelerating organic revenue growth and incremental FCF leverage driving towards a “Rule of 45″ framework. While we find the margin leverage to be highly achievable, we view the risks to the company’s $1.3B ARR target to be centered in sustaining a 20% growth rate in its EX segment and driving to $100mm+ in ITAM ARR. Mgmt notes increasing deal sizes, more competitive products (i.e with Device42) and new partner motions can support the growth but we do see law of large numbers as a potential headwind. We view targets for the CX, ESM, and AI segments to be relatively achievable versus current CX growth levels and what we believe is high demand for the ESM and AI modules.”
Freshworks Inc. is a software development company that provides software-as-a-service products.
9. GitLab Inc. (NASDAQ:GTLB)
Number of Hedge Fund Holders: 47
GitLab Inc. (NASDAQ:GTLB) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On September 11, Guggenheim analyst Howard Ma initiates coverage on the stock with a Buy rating and a price target of $70.00.
According to the firm, AI tools will enhance, not undermine, demand for software platforms for names such as Atlassian and GitLab. Particularly for GTLB, the firm noted how the company is a “leading enterprise-focused DevSecOps platform with 95% gross retention.
It further said that concerns regarding AI coding assistants replacing developers and threatening GitLab’s seat-based model were “overblown.”
GitLab’s paid user base has accelerated at a double-digit pace over the last year, driven largely by its Duo AI suite and Ultimate tier. The firm believes that this trend is likely to sustain.
“Key Message: We’re initiating coverage of GTLB shares with a Buy rating and $70 price target, representing 43% potential upside. Based on our due diligence, GitLab is the leading enterprise-focused DevSecOps platform. Its strengths in managing the end-to-end software development lifecycle (SDLC) and advanced security features have contributed to >95% gross retention and peer-high growth. Yet GTLB’s valuation, especially on a growth-adjusted basis, has been depressed, due to concerns that AI coding tools will replace software developers, threatening Gitlab’s seat-based model. AI could also disrupt the entire SDLC, putting GitLab’s core value proposition at risk. In our view, these risks are overblown; meanwhile, GitLab has a formidable offensive strategy in play. We estimate GitLab has nearly 2M paid users today, only a fraction of global developer headcount, which continues to rise, even despite AI-driven productivity benefits. On its F2Q26 earnings call, GitLab shared that paid seats have grown double digits y/y and at an accelerating rate over the last four quarters, which we expect to continue. Additionally, GitLab’s Duo AI suite offers more comprehensive features than standalone AI tools today. Together, Ultimate and Duo are driving healthy paid user growth and enterprise expansion, while there is opportunity for price increases, including usage-based pricing for Duo that is in the works. Following 29% revenue growth in F2Q26 marked by significant Total New ARR acceleration, we see GitLab ultimately growing 27% in FY26 (vs. consensus +24%) and 26% in FY27 (8% above consensus, which is at +20%). With peer-high gross margin (90%), we also see room for material FCF margin expansion (vs. 21% in FY26E), making for a sustainable near Rule of 50 status.”
GitLab Inc. (NASDAQ:GTLB) develops software for the software development lifecycle in the US, Europe, and the Asia Pacific.
8. Atlassian Corporation (NASDAQ:TEAM)
Number of Hedge Fund Holders: 64
Atlassian Corporation (NASDAQ:TEAM) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On September 11, Guggenheim analyst Howard Ma initiated coverage on the stock with a Buy rating and a price target of $225.00.
According to the firm, investor sentiment on the shares has been “depressed” due to concerns that AI coding tools is going to impact Atlassian’s seat-based model negatively.
Nevertheless, the analysts told investors in a research note that even though there are indications that AI may impair entry level job growth, it isn’t the “death knell for Atlassian.” The firm further noted that global developer headcount continues to rise and while AI improves productivity, user growth should continue.
“Key Message: We’re initiating coverage of TEAM shares with a Buy rating and $225 price target, representing 30% potential upside. Atlassian has been a paradigm for product-led growth that has led to consistent Rule of 50 status. Underpinning this rarefied air are 300,000+ customers of its collaboration products like Jira and Confluence, while expansion into service management, AI workflows via Rovo, and upmarket investments are bearing fruit for its wall to-wall “System of Work” strategy. Recently, investor sentiment has been depressed, due to concerns that AI coding tools will hurt Atlassian’s seat-based model, which is split evenly between technical and non-technical users. Despite indications that AI may impair entry level job growth, especially roles like software developers, we don’t view this as the death knell for Atlassian. Global developer headcount continues to rise, and while AI improves productivity, user growth should continue. Moreover, AI-driven app development should increase usage of Atlassian’s products, supported by positive web and mobile app traffic trends. Could AI cause seat compression over time? Possibly, but even if so, we calculate Atlassian has penetrated at most 20% of its global addressable opportunity today and max one-third by 2029, leaving ample room to achieve its LT target of $10B by FY29. We see Cloud revenue ultimately growing 25% in FY26 and total revenue re-accelerating to 22% (vs. consensus/guide of 21% and 18%, respectively) with 30%+ FCF margin (vs. consensus at 28%). Migration benefit should be less vs. prior years, more than offset by higher pricing and expansions/cross-sell, while Data Center EOL could provide further top and bottom line upside.”
Atlassian Corporation (NASDAQ:TEAM) is a global software company that designs, develops, licenses, and maintains various software products worldwide.
7. Arista Networks Inc (NYSE:ANET)
Number of Hedge Fund Holders: 81
Arista Networks Inc (NYSE:ANET) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On September 12, Rosenblatt analyst Mike Genovese raised the price target on the stock to $140.00 while maintaining a Neutral rating.
The price target raise follows Arista’s Analyst Day, where the company made a compelling case for maintaining leadership in the 100G and above Ethernet Networking market.
With AI data centers emerging, analysts at the firm believe that Arista’s basis of differentiation is transitioning from “operating system and programability to Cloud integration, telemetry, automation, network diagnostics capabilities, and power savings strategies.”
“We recognize Arista’s long track record of guiding conservatively, but were still slightly disappointed by the 2026 and beyond operating margin guidance of 43% to 45%, vs. 2024A and 2025E above 47%, and the 2026-2029 revenue CAGR in the mid-teens, compared to guidance to grow sales 25% in 2025 and 20% in 2026. To get to 20% revenue growth in 2026, management sees ~25% of its business, which is AI Data Center and Campus, expanding ~70%, while the other 75% of sales are roughly flat. In terms of margins, Arista is guiding for GMs to drop from 63% to 64% in 2025 to 62% to 64% in 2026, and to 60% to 64% after 2026 since AI Data Center is the fastest growing part of the business and the Cloud Titans get the most favorable pricing. The company is implying that Opex will grow significantly faster than sales in 2026, and nearly as fast as sales in 2027. We are increasing 2025 revenues to $10.5bn from $10.1bn, but our 2025 EPS forecast remains ~$3.10. We are also introducing 2027 revenues/EPS at $12.2bn/$3.50, and increasing our price target to $140 based on 40x 2027 EPS.”
Arista Networks Inc (NYSE:ANET) develops, markets, and sells cloud networking solutions.
6. Talen Energy Corporation (NASDAQ:TLN)
Number of Hedge Fund Investors: 83
Talen Energy Corporation (NASDAQ:TLN) is one of the 10 AI Stocks Analysts Say You Should Watch Closely.
On September 11, Barclays analyst Nicholas Campanella raised the firm’s price target on the stock to $440 from $418 and kept an “Overweight” rating on the shares following the analyst day.
In an investor note, the analyst told investors how the company’s guidance through 2028 is “clearly conservative.”
Talen Energy Corporation (NASDAQ:TLN) is a leading independent power producer and energy infrastructure company.
5. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 104
Adobe Inc. (NASDAQ:ADBE) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On September 12, Stifel analyst Parker Lane reiterated a Buy rating on the stock with a $480.00 price target after the company posted better-than-expected quarterly results.
The firm cited several factors behind Adobe’s strong performance, particularly its artificial intelligence initiatives, pricing strategies, and encouraging metrics around net user additions.
It believes that Adobe has established a compelling case to serve as the “operating system for creative work” in the future.
AI proliferation and pricing benefits reflect continued subscription growth, while the MAX event in October is another opportunity to “improve what remains a negatively skewed sentiment.”
“Adobe beat Street estimates across the board and raised guidance, most notably the Digital Media ARR growth outlook, in line with our preview. Strength was attributed to a few factors, such as AI, where the company exceeded its year-end AI-first ARR target a quarter ahead of schedule (>$250mn), pricing, and encouraging metrics around net user additions despite L-T seat count fears. We believe management made a clear case why Adobe will serve as the operating system for creative work in the future, highlighting utilization of first and third-party models within Adobe apps. On top of stabilization/growth in the core business apparent through various metrics we highlight below, AI proliferation and pricing benefits set the company up for continued subscription growth in the near double-digits exiting the year and into 2026. MAX in October is another opportunity to improve what remains a negatively skewed sentiment. Maintain Buy and $480 TP.”
Adobe Inc. (NASDAQ:ADBE) is a software company that provides digital marketing and media solutions.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 115
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On September 15, Barclays maintained its Equal Weight rating on the stock with a price target of $275.00, raising its third-quarter delivery forecast.
According to the investment bank, Tesla will deliver an estimated 465,000 vehicles in the third quarter, which is significantly higher than the consensus estimate of around 430,000 units.
It further stated that Tesla’s inventory will decline by 20,000 units’ quarter-over-quarter. This will bring the company’s total inventory down to an estimated 110,000-120,000 vehicles.
The firm has credited these better-than-expected deliveries to solid data points throughout the quarter and accelerated US sales ahead of forthcoming expiration of the federal electric vehicle tax credit.
However, it has cautioned that despite of near-term delivery strength, investors may be focused on weaker expected volume outlook in Q4 and beyond, especially in the U.S. market where EV demand may witness a major decline after the tax credit expires.
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 156
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On September 11, Phillip Securities analyst Helena Wang downgraded the stock from Neutral to Reduce with a price target of $200.00.
The rating downgrade comes amid a stretched valuation and near-term headwinds which overshadow the impact of the company’s latest product launches. The firm said that it maintains a cautious outlook in the stock due to near-term tariff headwinds, elevated CAPEX, and lack of significant AI innovation.
“Our valuations remain unchanged. Our DCF target price remains unchanged at US$200, with a WACC of 6.5% and a terminal growth rate of 3%. We downgrade our recommendation from NEUTRAL to REDUCE due to the recent share price rally. We maintain a cautious outlook on Apple, due to near-term headwinds from tariffs, elevated CAPEX, and no significant AI innovation to help with persistent weakness in products and the China market.”
Apple is a technology company known for its consumer electronics, software, and services.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On September 5, Tigress Financial Partners analyst Ivan Feinseth raised the price target on the stock to $280.00 while maintaining a Strong Buy rating.
According to the firm, Alphabet’s continues to benefit from its “AI-driven leading position across every major secular technology trend” which is in turn driving strong revenue, cash flow, and profitability.
Meanwhile, a recent favorable Chrome decision has removed a major regulatory concern for the company.
Discussing Q2 2025 results, the firm noted how the print featured double-digit revenue growth with significant AI-driven momentum across core segments. Cloud and Search were key growth drivers during the quarter.
“Alphabet’s Q2 2025 results were highlighted by robust double-digit revenue growth, significant AI-driven momentum across core segments, and strong profitability, with Cloud and Search standing out as key growth drivers. Alphabet’s ongoing ability to integrate advanced AI functionality across core product lines, including Search, YouTube, Cloud, and subscriptions, continues to drive robust growth in digital advertising and market share gains, accelerating Business Performance trends. Alphabet’s favorable court outcome, which allows it to retain control of its Chrome browser, has strengthened its strategic position in generative AI and limited the immediate regulatory threat to its core business. Alphabet’s strong balance sheet and cash flow enable the ongoing funding of key growth initiatives, strategic acquisitions, and the further enhancement of shareholder returns through ongoing share repurchases and dividend increases. Alphabet is on our Research Focus List and in our Focus Opportunity Portfolio.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 260
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 AI Stocks Analysts Say You Should Watch Closely. On Septemer 15, Citizens JMP analyst Andrew Boone reiterated a Market Outperform rating and $900.00 price target on the stock.
According to the firm, Meta is opening Reels trending ads to all advertisers through the holiday season. Early tests are showing these ads increase unaided awareness by 20%.
Overall, the firm believes that Meta is poised for continued growth in its advertising business.
“Meta opens Reels trending ads to all advertisers through the holiday season while we note early tests show Reels trending ads increase unaided awareness by 20% which compares to Youtube Select of 20% and TikTok Pulse of 14%. This as Meta (META, MO, $900) will begin testing Advantage+ catalog ads and app ads campaigns along with single image and video ads on Threads. Meta continues to have multiple levers to drive performance for advertisers while Threads has 400M+ MAUs and is an under monetized asset, in our view.”
While we acknowledge the potential of META 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 META and that has 100x upside potential, check out our report about this cheapest AI stock.
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