A severe global shortage of memory chips is forcing artificial intelligence and electronic companies into a quiet competition for diminishing supplies. In a report, Reuters has revealed how tech giants including Microsoft, Google, and ByteDance are rushing to secure supplies from companies such as Micron, Samsung Electronics, and SK Hynix.
The findings indicate how the supply crunch is impacting almost every type of memory, from flash chips used in USB drives to advanced high-bandwidth memory (HBM) used in AI data centers.
Prices for certain segments have more than doubled since February, with economists and executives warning of a potential macroeconomic threat rather than a mere tech sector imbalance.
“The memory shortage has now graduated from a component-level concern to a macroeconomic risk.” The AI build-out “is colliding with a supply chain that cannot meet its physical requirements.”
– Sanchit Vir Gogia, CEO of Greyhound Research, a technology advisory firm.
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.
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. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 72
Hewlett-Packard Enterprise Company (NYSE:HPE) is one of the 10 AI Stocks in Focus This Week. On December 1, Evercore ISI analyst Amit Daryanani reiterated an Outperform rating on the stock with a $28.00 price target.
The firm is positive on the stock following the sale of its remaining 9% stake in H3C, seeing the divesture as strategically aligned with HPE’s financial goals and integration roadmap.
Analysts discussed that the sale will be split amongst three buyers, including majority owner Unisplendour (UNIS). HPE will fully exit its stake through two sales totaling $1.3B, strengthening its balance sheet.
“In a filing this morning, HPE announced the sale of its remaining ~9% stake in H3C for ~$643M. The sale will be split among three buyers, including majority owner Unisplendour (UNIS), and is expected to close within the next 180 days pending regulatory and UNIS shareholder approval. The current transaction follows the announced sale of HPE’s ~10% stake of H3C two weeks ago and in aggregate, the two transactions will fully divest HPE from H3C and result in net proceeds of ~$1.3B to HPE’s balance sheet.”
Evercore ISI believes that the divesture is strategically positive, supporting its Juniper integration.
“Cash received from this transaction reflects the same valuation as the prior 10% sale and HPE’s original put agreement. This aligns with HPE’s broader strategy of deleveraging the business post Juniper close and allows management to further focus on integrating the two businesses.”
Hewlett Packard Enterprise Company (NYSE:HPE), an American multinational technology company, provides high-performance computing systems, AI software, and data storage solutions for running complex AI workloads.
9. Reddit, Inc. (NYSE:RDDT)
Number of Hedge Fund Holders: 80
Reddit, Inc. (NYSE:RDDT) is one of the 10 AI Stocks in Focus This Week. On December 1, Piper Sandler reiterated an “Overweight” rating on the stock with a price target of $290.00. The firm views Reddit as a strategic AI asset supported by licensing potential and ad revenue momentum.
Reddit has two primary Data Licensing (DL) agreements in place with Google and OpenAI. These DL agreements drive a significant portion of segment revenue, and are on track to reach an estimated $400million in revenue by 2027, surpassing both consensus & PSC expectations.
The firm likes the setup for Reddit heading into 2026, noting how the growing demand for training data in the AI landscape positions the company as a strategic asset.
The company’s advertising business, which the firm expects to grow an estimated 70% year-over-year in 2025 and mid-40% in 2026, also possesses “differentiated growth” compared to peers.
“Reiterate OW. We like the set-up for RDDT stock into ’26. The growth in AI continues to fuel the need for training surfaces, and we see RDDT as a strategic asset in this context. Similarly, we see RDDT’s ads businesses possessing differentiated growth (we project ~70% y/y growth for ads in ’25, mid-40% percent growth in ’26). Last, RDDT is coming out of difficult y/y user growth compares, and we expect stabilization in 4Q with potential upside to our 2026 forecasts.”
Reddit, Inc. (NYSE:RDDT) is a social media platform that leverages AI to strengthen search functionality and improve user engagement.
