Global stock markets have been riding high, particularly with all the excitement around artificial intelligence. However, many investors are now warning that inflation can come back and hurt markets.
2025 saw US stocks posting double-digit gains, with a handful of companies generating most of total market earnings. Falling inflation helped bonds as well, but inflation remains above the Federal Reserve’s average 2% target.
Looking ahead, government stimulus, combined with heavy AI spending, is anticipated to bolster growth. However, a Reuters’ report how money managers now fear if this could reignite inflation, forcing central banks to stop cutting rates, or even raise them again.
“The costs are going up not down in our forecast, because there’s inflation in chip costs and inflation in power costs,” said Morgan Stanley strategist Andrew Sheets said.
“What keeps us awake at night is that inflation risk has resurfaced,” said Julius Bendikas European head of economics and dynamic asset allocation at Mercer
“Inflation is what could start to scare investors and cause markets to show some cracks,” said Asset manager Carmignac investment committee member and portfolio manager Kevin Thozet.
While artificial intelligence is still powering the global growth, rising costs and inflation pose major risks to the rally.
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 Q3 2025.
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10. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 56
Baidu, Inc. (NASDAQ:BIDU) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 7, Freedom Capital Markets analyst Roman Lukianchikov raised the price target on the stock to $160.00 (from $120.00) while maintaining a “Buy” rating. Firm analysts see positive signs from Baidu’s transformation efforts despite near-term margin pressure.
Analyst Roman Lukianchikov discussed how Baidu delivered quarterly results that generally surpassed expectations. The company’s ongoing transformation, which has had required higher capital expenditures, has begun yielding positive results despite intensifying competition in the company’s core business.
Even though elevated spending continues to pressure margins, the firm is confident that scaling Baidu’s less profitable venture may drive a recovery in profitability over the medium term.
“While margins may face further pressure in the coming quarters, successful scaling of some of the company’s less profitable initiatives could drive a recovery in profitability over the medium term. We issue a ‘Buy’ recommendation and raise our target price from $120 to $160.”
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. CoreWeave, Inc. (NASDAQ:CRWV)
Number of Hedge Fund Holders: 62
CoreWeave, Inc. (NASDAQ:CRWV) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 6, Truist Securities analyst Arvind Ramnani initiated coverage on the stock with a Hold rating and an $84 price target. Despite the cloud service provider’s revenue gains and high-end clients, the firm believes that CRWV suffers from lofty leverage and high capital expenditure requirements.
CoreWeave, a leading provider of cloud services purpose-built for AI, has a strategic partnership with Nvidia. It also counts several notable names among its customer base, including OpenAI, Microsoft, Meta, and Google.
“The NVIDIA partnership is vital as it ensures access to GPUs – NVDA is a ~7% owner of CRWV and committed to buy up to $6.3B of any unsold capacity by CRWV through April 2032, providing a long-term revenue backstop.”
-Truist analysts, led by Arvind Ramnani.
However, the firm also flagged how only a few revenue sources, tied to one or two customers, creates risks for the company.
“Last year, the company generated 77% of its revenue from its two largest customers, with Microsoft as its largest customer at 62% of revenue,” Ramnani said. “This year, Microsoft has made up ~70% of revenue through 3Q25, though it is expected to fall under 50% of revenue next year after the OpenAI contract begins. While there are significant supply constraints today, we see risks if a comparable alternative to NVIDIA’s GPUs emerges or supply constraints ease.”
Ramnani added that despite these risks, CRWV shares have a potential backstop to protect from share declines. The firm sees potential for NVIDIA or other partners to acquire CRWV if business conditions worsen – “as GPU and compute capacity will likely remain vital to AI models.”
CoreWeave, Inc. (NASDAQ:CRWV) is a cloud platform provider that provides equipment for AI and other computing purposes.
8. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 66
Accenture plc (NYSE:ACN) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 6, Truist Securities analyst Arvind Ramnani initiated coverage on the stock with a “Buy” rating and a $317 price target. The firm deems ACN as a as a compelling (but not riskless) investment opportunity to benefit from enterprise modernization trends, particularly GenAI.
Analysts believe that ACN’s business mix should support mid-single-digit growth and stable margins over a multi-year time horizon. This is despite current stock valuation pricing in concerns about existing business being cannibalized by GenAI.
“The stock trades at a material discount to its historical average largely due to GenAI cannibalization of existing business. We think patient investors will be rewarded given ACN’s strategic partnerships with the leading frontier labs, broader GenAI ecosystem, and track-record in cannibalizing legacy revenue.”
-Ramnani and his team.
Neverthless, strategic partnerships with leading frontier labs and the broader GenAI ecosystem serve as positive factors for the company. Accenture also holds a track record for successfully cannibalizing legacy revenue streams, which is an indication that patient investors would likely be rewarded over time.
Accenture plc (NYSE:ACN) offers strategy and consulting services.
7. 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 Gaining Attention on Wall Street. On January 6, Freedom Capital downgraded the stock to “Hold” from Buy with a price target of $180, up from $140. The downgrade follows BABA’s quarterly results, with analysts highlighting rising capex and cost pressures offsetting cloud momentum.
The firm noted how Alibaba reported quarterly results that were above expectations. While its cloud segment continues to demonstrate massive growth and acts as a key driver for the stock, it comes at the cost of rapidly rising capital expenditures. The very expenditures whose payback prospects remain uncertain.
The company’s retail business, on the other hand, showed moderate growth compared to ecommerce peers. As such, the main factor that is going to make or break BABA’s performance in the coming quarters is its ability to expand both retail and cloud operations without a steep increase in related costs, analysts noted.
“We lower our rating to a ‘Hold’ recommendation and raise our price target for BABA from $140 to $180.”
Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally.
6. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 104
ServiceNow, Inc. (NYSE:NOW) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 5, Cantor Fitzgerald analyst Thomas Blakey reiterated an Overweight rating on the stock with a $240.00 price target.
The firm is optimistic on the stock, driven by driven factors including seat growth, better-than-expected results in the Federal sector, artificial intelligence initiatives, and uptick in mergers and acquisitions activity.
Cantor is optimistic on ServiceNow, noting that the stock is trading near its three-year valuation low at 8.5x projected 2027 revenue. Analysts believe that calendar 2027 could exceed current consensus estimates of 18% growth, supported by rising seat adoption, robust federal business, AI momentum, and increased M&A activity.
The firm further noted that it does not view ServiceNow’s recent M&A activity as buying growth. Instead, it believes that it is expanding the company’s total addressable market, which aligns with observations from Knowledge 2025.
Cantor also discussed how ServiceNow is strengthening its AI data stack with a focus on governance and security to meet customer needs.
ServiceNow, Inc. (NYSE:NOW) provides a platform that integrates workflows, data, and AI to coordinate how work flows across large organizations.
5. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
Micron Technology, Inc. (NASDAQ:MU) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 7, Piper Sandler maintained its Overweight rating on the stock and increased its price target to $400 from $275. Analysts are strongly positive on Micron as they see strong pricing power ahead, driven by tight supply and high-value HBM4 product positioning.
In an investor note, analysts highlighted how Micron is set to benefit from tight memory supply and higher pricing at least through the end of 2026. It believes all signals are pointing towards a robust year ahead.
“Supply Tightness to Support Pricing Throughout 2026: As previously stated, supply for calendar 2026 is effectively sold out, with limited ability to add capacity. Management noted pricing for high value products, such as HBM4, will be value derived. We continue to view the company as extremely well positioned as demand should continue to outstrip supply. Overall, Micron appears to be extremely well-positioned throughout 2026 and, to some degree, beyond. All incremental signals point to a strong 2026. We reiterate our Overweight rating.”
Analyst Harsh Kumar also noted that incremental supply requires “new clean room space to accommodate finer line widths, while also shrink is hard to achieve. This is why the industry is witnessing accelerating multiyear agreements as memory has become considerably more important due to the difficulty of engineering current memory generations.
“As such, customers are seeking multiyear supply assurances. MU is expected to bring on roughly 20% more supply in 2026 versus 2025, driven by node transitions as well as tremendous efforts to increase supply.”
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.
4. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 112
Vistra Corp. (NYSE:VST) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 6, KeyBanc analyst Sophie Karp reiterated an Overweight rating on the stock with a $217.00 price target.
The rating affirmation follows Vistra’s recent announcement that it will buy Cogentrix Energy from Quantum Capital Group in a deal valued at estimated $4 billion.
The company has entered a definitive agreement to acquire Cogentrix’s portfolio of 10 natural gas plants totaling 5,496 MW across PJM, ISO-New England, and ERCOT markets. The deal values the portfolio at an estimated $730/kW and about 7.25x 2027E adjusted EBITDA.
Keybanc describes this as attractive compared to Vistra’s pre-deal generation portfolio valued at an estimated $1,700/kW. As per the firm’s report, Vistra forecasts the deal to deliver mid-single-digit accretion in 2027 and high-single-digit accretion on average over 2027-2029.
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 120
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 7, GLJ Research analyst Gordon Johnson raised the price target on the stock to $25.28 (from $19.05) while maintaining a “Sell” rating. The firm has cited concerns about Tesla’s core automotive business, describing it as “fledgling.”
The automotive business, as per the firm’s estimates, represents 72.2% of sales. These numbers have been deemed “fledgling” even though they it projects a decent 12.1% year-over-year growth in the Energy Generation & Storage segment at 31.2% margins.
GLJ noted that Tesla experienced it’s first-ever year-over-year global delivery decline in 2024, falling 1.1%. It anticipates steeper declines of 7.7% in 2025 and 15.0% in 2026, driven by U.S. EV tax credit benefits fully rolling off, intensifying Chinese competition, and sustained brand erosion in Europe.
When viewing Tesla’s deliveries through actual deliveries and rising discounts, the firm noted how its sum-of-the-parts analysis show Tesla’s earnings outlook deteriorates quickly.
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 7, Canaccord Genuity analyst Maria Ripps raised the price target on the stock to $390.00 (from $330.00) while maintaining a Buy rating.
The firm is bullish on the tech giant, believing Google’s scale and data position will help extend its data-lead post regulatory clarity. It discussed how during most of 2025, the market perception about Google centered on competitive pressures, regulatory challenges, and lagging AI innovation. However, the narrative quickly changed after Google achieved favorable ruling in the search antitrust case.
“Following a favorable ruling in the search antitrust case, the narrative rapidly shifted to search stability, an accelerating pace of AI innovation, and robust cloud growth underpinned by structural hardware advantages (i.e., TPUs)”
The perception shift has enabled the company to deploy new AI products and leverage its scale, resources, and data advantages to “extend its competitive lead”. On this note, the firm anticipates Google to sustain this momentum throughout 2026, doubling its efforts to further “entrench AI into its ecosystem.”
“While we do see the potential for some volatility in 1H26, when the first Blackwell-trained models are expected to launch and as the TPU supply chain is reportedly strained, we remain constructive on the stock for several reasons…”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks Gaining Attention on Wall Street. On January 6, UBS analyst Timothy Arcuri reiterated a Buy rating on the stock with a $235.00 price target. The rating affirmation follows Nvidia’s recent Consumer Electronics Show (CES) at Las Vegas.
Analyst Timothy Arcuri anticipates Nvidia’s stock price to be driven by upward EPS revisions for calendar years 2026 and 2027. The AI chipmaker has demonstrated robust demand at the event, highlighting how agentic AI and physical AI are beginning to contribute this year.
Nvidia also discussed its Vera Rubin Platform at the event, which is now in full production and is anticipated to ramp in the second half of 2026. Meanwhile, for the Groq acquisition, the firm noted how the AI chipmaker has highlighted the on-chip memory opening new markets where low-latency is critically important. However, the company still expects Rubin to represent an estimated 90% of compute deployed.
The firm has kept its current estimates unchanged, but noted that there is an upside risk to 2026-2027 forecast because of faster product cycle times, the rollout of Rubin, and the likelihood that China shipments resume. The firm had previously anticipated this could add an estimated $8-10 billion per quarter in additional total revenue potential.
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.
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