According to Jay Jacobs, BlackRock’s U.S. head of equity ETFs, Big Tech investors are increasingly pivoting toward targeted themes like artificial intelligence.
“One of the biggest trades we’re seeing this year is simply people leaving the traditional tech sector and getting more granular into AI-specific ETFs, like BAI [the iShares A.I. Innovation and Tech Active ETF] from BlackRock.”
-Jacobs told CNBC’s “ETF Edge”.
BlackRock expanded investor access to technology and AI equities by launching iShares A.I. Innovation and Tech Active ETF and the iShares Technology Opportunities Active ETF back in October 2024.
Tony Kim, Head of the Fundamental Equities Technology Group at BlackRock, said at the launch that these ETFs will “help investors seize outsized and overlooked investment opportunities across the full stack of AI and advanced technologies”.
Besides AI, Jacobs highlighted blockchain-related stocks and cryptocurrency as other themes investors are interested in.
“Ethereum is really a bet on blockchain technology and other ways to use it through things like stablecoins and tokenization,” said Jacobs. “People want to play this potentially very disruptive theme.”
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 41
Arm Holdings plc (NASDAQ:ARM) is one of the 10 AI Stocks Every Investor Should Watch. On October 9, Morgan Stanley lowered the firm’s price target on the stock to $171 from $180 and kept an Overweight rating on the shares.
Although the overall outlook on the stock is positive, the firm adjusted its estimates for Arm’s fiscal year 2027, leading to the price target reduction.
Morgan Stanley highlighted that even though operating expenses have expanded, income from royalties and licensing income will support Q2 earnings.
Therefore, it sees “an attractive entry point” based on its long-term prospects for custom chip development and core business growth.
Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and manufactures semiconductor technology and other related products.
9. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 54
Dell Technologies Inc. (NYSE:DELL) is one of the 10 AI Stocks Every Investor Should Watch. On October 8, Melius analyst Ben Reitzes raised the price target on the stock to $200.00 (from $172.00) while maintaining a “Buy” rating.
Reitzes noted that while Dell is seen mostly as a personal computer and server vendor, it’s “ability to grow faster in AI servers, attach services and see increased enterprise adoption” is the reason why its ambitious targets look feasible.
“Bottom Line: Dell made a solid case for it to grow EPS much faster long-term than it thought only a few years ago. We see enterprise AI picking up steam as enterprises seek increased productivity and insights from data. We are slightly raising our FY28 (CY27) EPS estimate and increasing our target multiple to 15x from 13x, which could turn out to be too low if Dell can regain share in storage, which will help gross margins. Reiterate Buy – PT moves to $200 from $172.”
Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
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