According to Bank of America’s October Global Fund Manager Survey, fund managers are positive about stocks but fear that the market may be slipping into an AI-driven bubble.
The increasing expectations for a soft landing have risen to 54%, and optimism related to growth has also been strong.
However, concerns about valuations are growing at the same time, with 60% surveyed investors believing that global equities are overvalued, and about 54% stating that AI-related assets are in bubble territory.
AI has overtaken inflation and geopolitics as the top perceived tail risk, with long gold being the most crowded trade.
“A 2nd wave of inflation (27%), ‘Fed loses independence & US dollar debasement’ (14%), complete the podium of the biggest tail risks this month.”
-BofA strategist Michael Hartnett.
Hartnett also highlighted how the trade war risk (5%) has “eased significantly since peaking in April.” This is when a record 80% surveyed investors recognised it as the single biggest tail risk.
Despite the risks involved, investors believe possible profits are worth it even as positioning stretches. Therefore, they remain confident for now.
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).
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10. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 44
Bloom Energy Corporation (NYSE:BE) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Mizuho reiterated its Neutral rating on the stock with a $79.00 price target. The rating affirmation follows Bloom Energy’s announcement of a significant partnership with Brookfield, a leading global investment firm, to build AI factories that can meet compute and power demands of artificial intelligence.
According to the deal, Brookfield will invest up to $5 billion to deploy Bloom’s advanced fuel cell technology, reaffirming Bloom’s role in data center projects. Mizuho estimates reveal that Bloom will supply an estimated one-sixth of Brookfield’s data center power needs over the next five years.
This translates to roughly 200 MW per year of orders. The first order for Europe is anticipated later this year and will likely be approximately 100 MW.
Mizuho now tracks over 850 MW per year of order visibility for Bloom Energy over the next 3-5 years. However, it noted how Bloom still faces manufacturing limits. While current visibility doesn’t support more than 2 GW per year of manufacturing capacity, the firm continues to estimate Bloom will reach 5 GW per year of capacity by 2029.
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers.
9. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 77
Palo Alto Networks, Inc. (NASDAQ:PANW) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, BTIG upgraded the stock to “Buy” from Neutral with a $248 price target. The rating upgrade follows a series of channel checks.
The firm engaged in discussions with seven contacts, which were “surprisingly positive.” Based on checks, the firm is now increasingly optimistic that the company holds the potential to achieve growth targets of 14% total revenue growth and 26% growth in NGS ARR in FY26.
“We spoke with seven contacts on PANW. The partners in our discussions combine for ~$1.2B in annual PANW sales. Feedback was surprisingly positive and improved meaningfully from our work in prior quarters.”
The brokerage also noted how Palo Alto’s pending acquisition of CyberArk may help the company expand into new arenas and sustain growth of more than 20% in identity protection.
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity.
8. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 81
Applied Materials, Inc. (NASDAQ:AMAT) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Bank of America upgraded the stock to “Buy” from Neutral with a $250 price target. The firm believes that the semiconductor stock’s valuation is attractive.
The rating upgrade reflects prospects of wafer fab equipment, or WFE, growth in 2026. This would be the first time in four years, driven by robust Dynamic Random Access Memory, or DRAM, investments and an attractive valuation gap to large peers.
The firm has raised its calendar 2025 and 2026 WFE growth estimates by 6% and 9%, respectively.
“We upgrade AMAT to a Buy (from a Neutral) and raise our PO to $250 on prospects of WFE [wafer fab equipment] outgrowth in CY26, the first time in four years, due to robust DRAM investments and an attractive valuation gap to large peers.”
Applied Materials, Inc. (NASDAQ:AMAT) is a leader in materials engineering solutions engaged in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries.
7. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 82
Intel Corporation (NASDAQ:INTC) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Bank of America downgraded the stock to “Underperform” from Neutral. It believes that the stock has run too far, too fast.
“We downgrade INTC to Underperform from Neutral while maintaining ests. and $34 PO.”
According to the firm, the $80B rise in Intel’s market cap already fully reflects its improved balance sheet and potential growth from (external) foundry.
However, Intel is yet to face several challenges, considering it doesn’t have a discernible AI portfolio/strategy and has an uncompetitive server CPU. Moreover, it is less flexible now compared to when it was in divesting loss-making manufacturing.
The company has struggled to regain market share from competitors and lost leadership in both the personal-computer and server central processing unit markets. This is mainly due to subpar chips compared to those from AMD and ARM.
Speaking of its discernible artificial-intelligence strategy, the firm believes that Intel doesn’t have a so-called AI accelerator product, which is a piece of specialized hardware designed to speed up AI workloads.
While Intel has been trying to develop or acquire new AI accelerator assets, “but at this point the project seems to be either in a halt or no longer a focus area given the struggles in the existing CPU business as well.”
Overall, the firm expects INTC to be unprofitable by the end of calendar 2027.
Intel Corporation (NASDAQ:INTC) designs, manufactures, and sells computer products and technologies, delivering data storage, computer, networking, and communications platforms.
6. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 115
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Melius initiated coverage of the stock with a “Buy” rating and a $520 price target. The firm calls Tesla a “must own” as it is poised to capitalize on AI disruption impacting multiple industries, starting with automotive.
“Tesla is unique in its ability to deliver on this potential. Access to compute and ability to manage it have become a new differentiator in a world where rising computing power accelerates the pace of change.”
Melius highlighted how Tesla’s computing power management, along with the combination of technology expertise and manufacturing capabilities, is currently unmatched by competitors.
Moreover, the company’s connection to the “Musk ecosystem,” including xAI, offers benefits that allow for the delivery of new data centers at a very fast pace. Meanwhile, its manufacturing strategy allows rapid iteration and vertical integration.
Melius believes that the company’s ability to “rapidly improve and scale autonomy in driving” is the “first major manifestation of AI in the physical world” and that major changes are going to follow.
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
5. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 124
Oracle Corporation (NYSE:ORCL) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Barclays reiterated the stock as “Overweight” and raised its price target on the stock to $367 per share from $347. The firm is optimistic about the stock as we head into Financial Analyst Day, taking place on October 16th.
“Bullish Sentiment around Shares Heading into Financial Analyst Day (FAD) on 10/16.”
Investment bank Mizuho also reiterated the stock as “Outperform” on October 6th with a price target of $350. Similar to Barclays, it believes shares of Oracle have more room to run ahead of its financial analyst day on October 16th.
“We remain bullish on ORCL heading into the Financial Analyst Day, viewing it as a key catalyst to refocus attention on Oracle’s long-term AI growth story.”
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
4. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Mizuho raised its price target on the stock to $430.00 from $410.00 while maintaining an Outperform rating. The raised price target follows OpenAI’s announcement of a custom ASIC partnership with the chipmaker.
The companies announced a collaboration on Monday for 10 gigawatts of custom AI accelerators starting in 2026. OpenAI will engage in the design of the accelerators and systems, which will be developed and deployed in partnership with Broadcom.
The collaboration marks OpenAI’s third gigawatt-scale deal in the past few weeks. The company is planning to deploy 10 gigawatts of its custom ASIC, code-named Titan. According to Mizuho, this could potentially be worth an estimated $150-200 billion for Broadcom over multiple years.
Based on the firm’s research note, the initial production ramps for the custom chips will likely begin in the second half of 2026. In this regard, it has conservatively raised its Broadcom AI revenue estimates, which are $40.4 billion for fiscal 2026, $64.5 billion for fiscal 2027, and $78 billion for fiscal 2028.
Mizuho anticipates additional tailwinds from Broadcom’s networking business with SUE/Tomahawk products.
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 156
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Jefferies reiterated the stock as “Underperform” and lowered its price target on the stock to $203.07 per share from $205.16. Analyst Edison Lee noted “more downside than upside” ahead for Apple.
“As flagged before, tariffs could come back to haunt AAPL.”
The firm highlighted how Trump’s proposed 100% tariff on Chinese goods, which starts Nov. ,1 would hit Apple. This is considering the company relies heavily on China for assembly.
“Not only could the current tariff-exempt status of smartphones change, the uncertainties around the U.S.-India and U.S.-China tariff framework are underestimated risks. As Trump has just slapped an additional 100% (now 30%) tariff on Chinese imports, whether smartphone import from China would continue to be exempted remains uncertain.”
The firm anticipates a 5% EPS hit in FY2026 if the company pays a 130% tariff on an estimated 9 million units. Since Indian production is unable to fully cover U.S. demand, Apple will be vulnerable if tariffs are imposed.
Lee pointed out that China is unlikely to meet 100% of its U.S. demand for iPhone 17s with production from India. The company may also face additional pressure from the administration to make more iPhones in the U.S. This especially holds in the event of an escalating U.S.-China conflict.
Margins for the company’s latest lineup may be further thinned by an unfavorable product mix and a higher bill of materials cost.
“iPhone 17’s sales momentum has shown further slowdown.”
Apple is a technology company known for its consumer electronics, software, and services.
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Mizuho reiterated Nvidia as Outperform and raised its price target $225 per share from $205.
Mizuho analyst Vijay Rakesh continues to view Nvidia as a leader in the artificial intelligence market, with the firm forecasting more than $300 billion in AI data center revenue by 2028.
According to Rakesh, “Neocloud budgets” are “increasingly strained by Rubin/Instinct pricing as customers sharpen focus on ROI,” which signifies competitive pricing pressures in the market.
“We also see Neocloud budgets increasingly strained by Rubin/Instinct pricing as customers sharpen focus on ROI. We continue to see AVGO, NVDA best-positioned while AMD’s OAI deal suggest upside potential. Raising AMD Estimates, PT to $275; Raising NVDA PT to $225. We continue to see NVDA the AI leader with ~$300B+ 2028 AI DC revenue.”
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 260
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 AI Stocks in Focus on Wall Street. On October 13, Citi opened an “upside 90-day catalyst watch” on the stock while reiterating a Buy rating and a $915 price target. The firm said it is bullish heading into earnings.
According to the firm, Meta’s engagement is improving, and its recent advertising products are leading to a greater return on spend. The company is poised to report upside to revenue and earnings estimates, analysts noted.
It particularly mentioned the role of Business AI, its newest AI tool for businesses that helps answer questions, recommend products, and also handle sales transactions, in capturing a larger share of return on spend.
“On 3Q25 earnings—expected 10/29 AMC—our industry checks suggest Meta is gaining share of ad budgets as newer products (like Business AI) launch and we are initiating a 90-day Catalyst Watch as a result. Meta remains our Top Pick as we reiterate our Buy rating & $915 TP.”
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.
READ NEXT: 10 AI Stocks in the Spotlight Today and 10 AI Stocks Analysts Are Tracking Closely.
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