While AI bubbles seem to be getting all the attention, Hugging Face CEO Clem Delangue believes that Large Language Models (LLMs) are the real bubbles that could burst.
Wall Street initially rose after AI chipmaker Nvidia delivered record revenue, beating estimates and increasing current-quarter guidance. However, the rally was short-lived as fears of a growing AI bubble resurfaced last week.
Thankfully, stock futures climbed Monday morning as the Thanksgiving holiday week historically brings a more constructive tone.
Delangue believes that LLM, which is a subset of AI, may be the actual thing that may burst instead of AI.
“I think the LLM bubble might be bursting next year,” Delangue told Axios’ Dan Primack in New York City.
Delangue’s concerns stem from the widening mismatch between LLM investments and returns. While billions are being poured into these models, industry commentary warns that many companies have been unable to turn this into meaningful profit and that revenue figures still remain a small fraction of their large investment sums.
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.
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10. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 41
Arm Holdings plc (NASDAQ:ARM) is one of the 10 AI Stocks in Focus on Wall Street. On November 20, Raymond James reinstated coverage on the semiconductor sector, citing significantly more upside for a number of semiconductor stocks including ARM.
“The AI secular theme has taken the wheel, and the strategy of trading the cycle in semis has moved to the back seat. Each of these companies is impressive in its own way.”
Particularly for ARM, the firm noted long-term potential in artificial intelligence but views strategic uncertainty and valuation headwinds ahead. It has a Market Perform rating on the stock with no price target.
“The company is transitioning as it gains ground in data centers, with opportunities catalyzed by AI. Arm licenses its semiconductor intellectual property to a broad base of fabless semi customers and also realizes ongoing revenue through the collection of royalties on the devices sold.”
The firm discussed how ARM is considering becoming a fabless semi supplier, enabling it to capture more of the value chain for ARM processors. While this could bring in bigger profits, the firm believes it also comes with risks and may lead to a reduced stock multiple.
Since SoftBank holds a 90% ownership, any shift that ARM decides upon will need to align with its strategy and philosophy.
The firm also noted how the company’s exposure to data center is growing, reaching an estimated 20% of sales including customers such as Amazon, Google, and Microsoft. Meanwhile, there is declining exposure to Arm China, Apple, and Samsung.
Moroever, Arm’s revenue streams is evolving and each segment now contributing to an estimated 50-50 split. However, management is now focusing on higher royalties from Neoverse and CSS.
“Royalties for CSS sales can be almost 2× higher than commoditized legacy chips, and adoption is accelerating as hyperscalers continue to invest in expanding AI capacity and building new clusters.”
Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and manufactures semiconductor technology and other related products.
9. Astera Labs, Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holders: 56
Astera Labs, Inc. (NASDAQ:ALAB) is one of the 10 AI Stocks in Focus on Wall Street. On November 20, Raymond James assumed coverage on the stock with a Market Perform rating and no price target. The firm sees opportunity on ALAB driven by GenAI demand and PCIe leadership. However, shares seem fairly valued and long-term competitive pressures remain.
The firm has acknowledged that Astera Labs is a leading supplier of high-speed connectivity solutions “benefitting from the GenAI megatrend.” Even though substantial opportunities are ahead, it considers risk-reward as balanced.
“Compute intensity and collective operations (required to sync and update LLMs) fuels the traffic among chips, boards, and racks, which necessitates high-speed interconnects in which Astera specializes.”
The firm highlighted how Astera has been the first to market PCIe 5 and 6, with solid share at Amazon and Google. However, competitors like Broadcom, Marvell, and Credo are deemed to be “fast followers.”
Astera’s new Scorpio PCIe fabric switches also boost its market opportunity, and it is also progressing in the Active Electrical Cable (AEC) markets where Credo remains the leader.
The firm has also acknowledged diminished content in NVIDIA’s Blackwell NVL systems, largely offset by custom ASIC growth. However, potential disruptions also exist which are having an impact on the bull thesis.
“Astera’s diminished content in NVIDIA’s Blackwell NVL systems is largely offset by custom ASIC growth with significant content expansion opportunities due to open standards-based, back-end networks, but Ethernet for Scale-Up Networking (ESUN) and co-packaged optics are two potential major disruptive factors to the bull thesis.”
Astera Labs, Inc. (NASDAQ:ALAB) is engaged in the design, manufacture, and selling of semiconductor-based connectivity solutions for cloud and AI infrastructure.
8. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 57
International Business Machines Corporation (NYSE:IBM) is one of the 10 AI Stocks in Focus on Wall Street. On November 19, Evercore ISI has reiterated an Outperform rating on the stock with a price target of $315.00. The rating affirmation follows a meeting with IBM CEO Arvind Krishna and Global Head of IR Olympia McNerney.
The firm’s discussions centered around the company’s strategy, management’s thoughts on the broader macro backdrop, enterprise AI vision, mergers-and-acquisitions philosophy, and similar trending topics.
Analysts believe that IBM is a “macro-resistant hybrid IT/AI leader that is well positioned to benefit from several tailwinds, including enterprise AI adoption, focus on productivity initiatives, prioritization of data sovereignty, and Quantum differentiation….”
They noted how enterprise IT spending should track ahead of mid-single-digit GDP growth given a constructive macro environment backdrop. This should potentially lead to high-single-digit growth for technology spending overall.
Overall, the firm believes that IBM’s business transformation has enabled it to become “a consistently growing company with strong FCF generation, PTI margin expansion, and enviable revenue visibility.”
“Net/net: We see multiple vectors for growth over the medium term. Maintain $315 price target.”
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.
7. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 76
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the 10 AI Stocks in Focus on Wall Street. On November 20, Raymond James assumed coverage on the stock with a Strong Buy rating and a price target of $121.00. The firm is bullish on the stock as it sees Marvell well-positioned for AI-driven demand and advanced packaging trends.
While analysts acknowledge how Marvell faces skepticism being a secondary custom silicon supplier, it believes it has the right ingredients due to its application specific integrated circuit business and optics segment.
“Marvell’s shares have traded 25–30× next-twelve-month (NTM) P/E after re-rating lower earlier this year (the 3-year and 5-year average is ~30×), and applying today’s 26× multiple to our $4.67 FY28/CY27 EPS estimate yields a price target of $121.”
The firm’s model reflects content share declines to 10% at Amazon because of more IP/design moves to Alchip and Amazon’s Annapurna internal design team. Moreover, it models Trainium/Inferencia chips totaling 1.5 million in CY25, increasing to 2 million in CY26 and 2.8 million in CY27.
It also assumes a similar 10% content ratio for Microsoft’s Maia as it “ramps to meaningful production from ~75K in CY25 to 382K in CY26 and 620K chips in CY27.”
The expected growth in shipments will likely drive custom compute sales to $1.4B (-6% y/y) in CY26 and $2.2B (+50% y/y) in CY27; added the analysts. Meanwhile, optics is expected to climb $4.4B and $5.6B in CY26 and CY27, growing 40% and 26%.
“Marvell is well positioned to thrive when advanced packaging becomes the market model with chiplets and massive amounts of interconnect.”
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
6. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 100
Snowflake Inc. (NYSE:SNOW) is one of the 10 AI Stocks in Focus on Wall Street. On November 21, Oppenheimer maintained its “Outperform” rating on the stock with a $295.00 price target. The firm is optimistic about the stock, citing encouraging third-quarter checks, resilient AI/ML momentum, and healthy product adoption that signal another strong quarter for the company.
Despite increasing competitive headwinds from Databricks, Snowflake’s checks have been encouraging and signal another strong quarter based on broad based consumption across regions/verticals.
Moreover, while a tough 2QFY26 comparison (+31.8%) may not allow for total revenue YoY growth acceleration, the firm believes that growth could approach 29-30%, potentially beating the consensus estimate of 25.6%.
The firms’ checks have been positive, with Snowflake seeing strong demand for its products and continued momentum for new tools such as Snowpark and Cortex. These factors will enable Snowflake to sustain NRR at 125% and support healthy consumption trends.
“With 3QFY26 Street expectations for product growth (+25.6% YoY) and OM (9.3%) modeled in-line with guidance of +25–26% and 9%, we see beatable targets that keep investors engaged. Reiterate Snowflake as a top pick.”
Snowflake Inc. (NYSE:SNOW) is a cloud-based data storage company providing a data analysis, storage, and sharing platform.
5. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 104
Adobe Inc. (NASDAQ:ADBE) is one of the 10 AI Stocks in Focus on Wall Street. On November 20, Piper Sandler reiterated an Overweight rating on the stock with a $470.00 price target. The rating affirmation follows Adobe’s announcement of its Semrush acquisition, which is a leading brand visibility platform, in order to boost its tools for marketers in the AI era.
The company announced that it will be acquiring Semrush in an all-cash transaction for $12.00 per share, representing a total equity value of an estimated $1.9 billion. The deal is anticipated to close during the first half of 2026.
According to the firm, the acquisition will enable Adobe to strengthen its existing Adobe Experience Manager, Agentic Web, and Analytics solutions for marketing professionals. This will be done by integrating Semrush’s generative engine optimization (GEO) and search engine optimization (SEO) capabilities.
“Brand visibility is being reshaped by generative AI, and brands that don’t embrace this new opportunity risk losing relevance and revenue. With Semrush, we’re unlocking GEO for marketers as a new growth channel alongside their SEO, driving more visibility, customer engagement and conversions across the ecosystem.”
– Anil Chakravarthy, president of Adobe’s Digital Experience Business.
Adobe Inc. (NASDAQ:ADBE) is a software company that provides digital marketing and media solutions.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 113
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the 10 AI Stocks in Focus on Wall Street. On November 20, Raymond James assumed coverage on the stock with an “Outperform” rating and a price target of $337.00.
The firm believes AMD is a clear AI beneficiary supported by a potential $15B AI pipeline by 2026 and OpenAI deployments boosting GPU adoption and market share gains.
AMD is seen to be the best positioned to compete with Nvidia in the GPU market, with expectations for “continued momentum” in accelerators and AI rack systems.
“AMD is a leading vendor of CPUs, APUs, and GPUs in the consumer and data center markets and is actively developing new elements including platforms and software. Investor skepticism lingers, but shares have attracted a broader audience than in the past”
According to the analysts, fundamentals need to catch up, and they believe they will.
The recent wins from OpenAI and Humain for ~1GWcould be worth an estimated $15 billion by 2026, growing to over 2 gigawatts in 2027. AMD is also poised for sustained server and PC share gains, added the analysts.
Meanwhile, OpenAI deployments may act as an important endorsement, likely encouraging other model builders and hyperscalers to adopt AMD GPUs.
The firm models just 190K MI350 chips and 915K MI450 chips in FY27, with the company poised for continued server and PC share gains.
“The AI TAM is large enough to support multiple chip suppliers, and AMD will be among the participants. We establish a $337 price target.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
3. 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 November 20, Raymond James assumed coverage on the stock with an “Outperform” rating and a price target of $420.00.
Raymond James believes there is upside for several semiconductor stocks, including Nvidia (NVDA), AMD (AMD), and more.
“The AI secular theme has taken the wheel, and the strategy of trading the cycle in semis has moved to the back seat. Each of these companies is impressive in its own way. We are AI bulls yet acknowledge the rich valuations and risk, but these are high-quality compounders with long-term growth rates above their cost of capital. We are in the midst of an unprecedented structural shift in the technology landscape, and semiconductors are foundational elements.”
Particularly for Broadcom, the firm believes AI share gains, margin strength, and underappreciated software cash flows will support long-term upside.
“We resume coverage of Broadcom Inc. (AVGO) with an Outperform rating. The company is a share gainer in the AI complex, providing operators customized alternatives to general-purpose processors.”
Broadcom is seen gaining share in the AI world since hyperscalers may want customized alternatives to general purpose processors.
Even though non-AI semis and software are restricting overall growth, it expects improvement from the non-AI semis and believes that margin and cash generation from software is not fully appreciated.
“Broadcom’s strength in chiplet and systems solutions, coupled with strong networking IP (processing, PHY/Serdes, Optics, CPO) and steady march of advanced packaging/CPO, is a competitive moat to protect shareholder profitability and market share in a rapidly evolving world. Our $420 price target is based on 30x our FY27E EPS.”
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
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 November 20, Baird raised its price target on the stock to $275.00 from $225, maintaining an “Outperform” rating. The price target raise follows Nvidia’s fiscal Q3 results, with the firm expressing confidence in Nvidia’s architecture leadership and unrivaled momentum.
The AI chipmaker beat Wall Street expectations for sales and earnings and also guided stronger-than-expected for fourth-quarter sales. According to CEO Jensen Huang, sales for Nvidia’s current-generation GPU, called Blackwell, have been “off the charts.”
Following the results, Baird discussed how Blackwell demand is well above supply, a situation similar to early 2024. While TSMC’s capacity and Nvidia’s execution are going to be focal points for next year, it is expected that the company will maintain “a stratospheric performance and platform advantage versus the competition throughout 2026 and likely 2027.”
Analysts see room for multiple expansion ahead based on robust AI demand and Nvidia’s architecture performance leadership.
“The combination of insatiable AI demand and ongoing architecture performance leadership (nothing new for Nvidia since 1999) warrants multiple expansion ahead, in our view. Outperform-rated.”
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 AI Stocks in Focus on Wall Street. On November 29, JPMorgan reiterated the stock as “Overweight,” stating that Microsoft has a “compelling vision” after attending the company’s Ignite Conference. The firm has a $575 price target on the stock.
“We attended Microsoft’s Ignite conference held in San Francisco, CA. Throughout the presentations and announcements, Microsoft brings to the forefront the concept of ‘frontier firms’ that are reimagining how business is done by placing AI at the operational core to enable employees and catalyze productivity.”
The firm noted how Microsoft has laid out a strong vision for enterprise AI, partiucalry as organziations are now shifting to AI deployment. The company announced Agent 365, a software that can help organizations deploy, organize, and govern agents securely.
Citing an IDC study, the company noted how as many as 1.3B AI agents will be deployed by 2028, reinforcing the need for Agent 365, as well as an Intelligence layer that can help unify structured and unstructured data for utilization by said agents.
Microsoft announced an App Builder for M365 Copilot.
“With App Builder, users can create an app within a matter of minutes through the combination of natural language and the intelligence layer within Microsoft’s platform that provides business-specific context to AI apps. This complements Microsoft’s GitHub Copilot family of products, helping provide development tools to users from the technical to the non-technical.”
JP Morgan also highlighted the new partnership between Microsoft, Nvidia (NVDA) and Anthropic (ANTHRO). Microsoft will invest up to $5 billion into Anthropic, while Nvidia will invest up to $10 billion. Anthropic has also committed to spend $30B on Microsoft’s Azure compute capacity as well as to contract additional compute capacity up to one gigawatt.
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
While we acknowledge the potential of MSFT 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 MSFT and that has 100x upside potential, check out our report about this cheapest AI stock.
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