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.
8. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 66
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is one of the 10 AI Stocks Every Investor Should Watch. On October 9, Stephens raised the firm’s price target on the stock to $590 from $525 and kept an Overweight rating on the shares. The price target raise follows the firm’s detailed review of its financial model for CrowdStrike.
The firm calls it a model clean-up and keeps its positive fundamental view intact.
“We are making slight adjustments to our CrowdStrike estimates after revisiting the company’s recent ARR-to-subscription revenue modeling commentary and conducting a detailed review of our model. As part of this, we explicitly modeled in the ARR-to-revenue conversion headwinds — something we should have done previously. As a result, we are adjusting our 2HFY26 revenue progression with a slight reduction to F3Q26, a slight increase to F4Q26 with the net result being no change to our FY26 revenue estimate.
We are also taking a more conservative approach with our FY27 ARR-to-revenue conversion assumptions resulting in modest decreases to our FY27 revenue, non-GAAP EPS, and FCF forecasts. We classify this as a model clean-up exercise, and there is no change in our positive fundamental view on CrowdStrike. Reiterate our Overweight rating and increase target to $590 from $525 based on an EV multiple of 23x our FY27 ARR estimate.”
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection.
7. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 73
Autodesk, Inc. (NASDAQ:ADSK) is one of the 10 AI Stocks Every Investor Should Watch. On October 9, BMO Capital has reiterated its Market Perform rating on the stock with a price target of $333.00. The rating affirmation follows discussions with Autodesk’s management which has given it a clearer picture of the company’s strategic direction.
BMO emphasized how ADSK is coming out of a “decade of transformation.” The firm said it is likely that there will be improved visibility on Autodesk’s financial model in fiscal year 2027 and beyond, noting how earlier investments in engineering are “ready to harvest.”
Management discussions were largely focused on drivers of durable growth in construction, infrastructure, and manufacturing sectors. Updates on Autodesk’s artificial intelligence product ambitions were also discussed.
Overall, the firm has deemed Autodesk’s AI monetization strategies to be “intriguing,” but also simultaneously warned that the financial impact of these initiatives “may take time to build.”
Autodesk, Inc. (NASDAQ:ADSK), a multinational software corporation, leverages generative AI technology to drive innovation across the design, construction, manufacturing, and entertainment industries.
6. 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 Every Investor Should Watch. On October 9, Goldman Sachs reiterated its Buy rating on the stock with a price target of EUR935.00. The firm believes ASML is a “clear beneficiary of improved leading-edge Logic/Memory demand from AI.”
Data from the Europe Semicap tracker demonstrates improvement in most key areas. Moreover, a constructive spending outlook for Memory and leading-edge Foundry in the US has led to an increase in growth expectations for Wafer Fab Equipment in 2025/2026.
Despite the stock’s recent rally, the firm sees room for further upside for the stock.
“Further, we view current expectations for 2026 for ASML as achievable, in the context of a more positive spending backdrop and note that an order cadence of only €2bn per quarter is required in coming quarters to reach the current Visible Alpha Consensus Data estimate for systems revenue. While we continue to see limited visibility around a recovery in demand for mature nodes, we note inventories have bottomed out in this area. While the ASML stock price has rallied around c.30% in the last month we see room for further upside, and see further scope for a valuation re-rating given WFE share gains into 2027/28 as EUV layers start to grow again (and given a potentially improving customer backdrop).”
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
5. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 103
Datadog, Inc. (NASDAQ:DDOG) is one of the 10 AI Stocks Every Investor Should Watch. On October 9, UBS analyst Karl Keirstead raised the price target on the stock and raised its price target to $189.00 from $165.00. The rating affirmation follows after analysts at UBS attended the New York-based user conference for emerging competitor ClickHouse.
The firm particularly focused on understanding how OpenAI was using ClickHouse to understand the dynamics of their relationship. This is important considering OpenAI is Datadog’s largest customer and with an upcoming contract renewal on the way, it is important to understand how OpenAI and ClickHouse’s relationship may impact or even displace OpenAI’s use of DDOG.
“We attended the NYC-based user conference for emerging Datadog/Snowflake rival ClickHouse, to better assess ClickHouse as a Datadog rival but specifically to understand how OpenAI – by far Datadog’s largest customer with a contract renewal coming up – was also using ClickHouse and to what extent this could displace OpenAI’s use of Datadog.
Bottom line, we conclude that indeed ClickHouse is taking share in logs from Datadog, but that does not preclude OpenAI from renewing, and Datadog usage could still grow thereafter.
At a CY26 revs/FCF multiple of 13x/50x, we remain Buy-rated.”
Datadog, Inc. (NASDAQ:DDOG) offers a cloud-based SaaS platform for monitoring and analytics, specializing in cloud computing and AI-powered cybersecurity products.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 115
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks Every Investor Should Watch. On October 10, Wells Fargo reiterated the stock as “Underweight,” stating that Tesla shares are overvalued.
“Remain UW; Too Much ‘Hype’ Baked In.”
In other news, US federal regulators opened yet another investigation into Tesla’s self-driving feature on October 9th. The investigation follows dozens of incidents in which Tesla cars ran red lights or drove on the wrong side of the road. Some of these crashed in other vehicles and also caused injuries.
44 separate incidents were reported where Tesla drivers using FSD said the system caused them to run a red light, run into incoming traffic or faced other traffic safety violations that led to collisions.
According to NHTSA, the investigation concerns “all Tesla vehicles that have been equipped with FSD (Supervised) or FSD (Beta).” This is an estimated 2,882,566 of the company’s electric cars.
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. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 124
Oracle Corporation (NYSE:ORCL) is one of the 10 AI Stocks Every Investor Should Watch. On October 10, Citi reiterated the stock as “Buy” and raised its price target to $415 per share from $395. According to the firm, the recent pullback in shares revolve around concerns regarding backlog quality and profitability.
The selloff is a buying opportunity, the firm noted. The company’s customer base is expanding, which is in turn driving its cloud growth.
“After a historic Q1, ORCL shares have traded off 10%+ from recent highs on concerns around quality of backlog, profitability concerns following a slew of press reports and broader AI bubble/circularity concerns.”
Its earnings per share growth is forecast above 30% annually between fiscal 2026 and 2030. This is backed by efficiency gains and rising GPU margins, likely to reach 35%40% by decade’s end.
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
2. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 125
Alibaba Group Holding Limited (NYSE:BABA) is one of the 10 AI Stocks Every Investor Should Watch. On October 10, Bernstein raised its price target on the stock to $200 from $167, maintaining an Outperform rating.
Key factors behind the rating affirmation were post-Q1 momentum, upbeat Apsara conference guidance, and accelerating confidence in Alibaba’s AI strategy. The firm noted that Alicloud revenue should keep accelerating.
This, the firm believes, will keep Alibaba shares well-supported beyond the near term. The supports stands even though current valuation is entering a territory that they describe as “art more than science.”
The company’s GMV share in China has also stabilized at around 15-20%. Moreover, Bernstein anticipates stronger user engagement and time spent to support moderate growth, but warns about competition and heavy food delivery spending.
Competition is an important aspect to watch out for, according to the firm, which remains “somewhat doubtful that peaceful co-existence can be the stable equilibrium in domestic e-commerce.”
Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks Every Investor Should Watch. On October 10, Morgan Stanley reiterated the stock as “Overweight.” The firm said it’s sticking with Nvidia.
“Our thoughts on the stock: We remain positive on the short- and long-term outlook here, and while the market is more optimistic now vs. 3-6 months ago, we still see the stock climbing a wall of worry from here.”
Analyst Joseph Moore from Morgan Stanley has expressed confidence in future demand and Nvidia’s growing share of cloud spending. While most of the current growth is coming from companies transitioning to GPUs, Moore believes the real boom comes from avenues such as healthcare, law, and robotics.
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
While we acknowledge the potential of NVDA 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 NVDA 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.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
