According to Morgan Stanley, artificial intelligence has the potential to generate annual net benefits of roughly $920 billion for S&P 500 companies.
In a Monday note, the investment bank noted how its analysis reveals a “$13-16 trillion in long-term market value creation potential for the S&P 500” backed by AI adoption.
Based on the report, “90% of occupations will to some degree be impacted by AI automation and augmentation,” with anticipated benefits from cost reductions and productivity gains.
The firm further anticipates that agentic AI, particularly software-based applications, will likely have “a broader impact on jobs relative to embodied AI,” with more room for augmentation rather than replacement.
It also said that the value creation potential is “fundamentally bullish for AI enablers and adopters.” Moreover, the roughly $3 trillion expected to be spent worldwide through 2028 in areas such as data centers and chips “is attractive.”
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 Q1 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An investors hand counting the 80% component securities of the public company’s assets.
10. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 24
C3.ai, Inc. (NYSE:AI) is one of the 10 AI Stocks In The Spotlight For Investors. On August 18, C3 AI and Brazilian power company Eletrobras announced a partnership that leverages artificial intelligence to modernize Eletrobras’s electric power transmission network.
The C3 AI Grid Intelligence tool will enable real-time fault monitoring and resolution across all of the company’s operations centers.
In 2024, the C3 AI Grid Intelligence tool was successfully implemented across 10 substations. Building on this success, the power company is now expanding the solution across all its transmission assets as part of the Eletro.ia program.
The Intelligence tool has been built on the C3 Agentic AI Platform, offering operators various benefits such as real-time context, accelerated fault response, and improved grid stability and compliance.
According to the companies, the use of artificial intelligence will allow improving network’s resilience and reliability at a large scale.
“Global energy expansion and resilience remains a primary company focus for C3 AI. Our work with Eletrobras reinforces C3 AI’s position as the trusted Enterprise AI provider for critical infrastructure and highlights the power of our platform in delivering operational transformation across the global energy sector.”
-Thomas M. Siebel, Chairman and CEO, C3 AI.
C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company involved in building and operating enterprise-scale AI applications and accelerating digital transformation.
9. Applied Digital Corporation (NASDAQ:APLD)
Number of Hedge Fund Holders: 26
Applied Digital Corporation (NASDAQ:APLD) is one of the 10 AI Stocks In The Spotlight For Investors. On August 18, the company announced that it plans to start building its next AI data center —the Polaris Forge 2—near Harwood, North Dakota, in September 2025. The $3 billion, 280-megawatt (MW) AI Factory is expected to begin operations in 2026 and reach full capacity in 2027.
Following the success of Applied Digital’s Polaris Forge 1 Ellendale campus, the facility will begin with 280MW initial capacity with the ability to scale beyond.
The said project has emerged due to the increasing demand for AI computing capacity, particularly fueled by the growing interest from hyperscalers, enterprises, and research organizations.
“We believe Polaris Forge 2 represents the next stage in Applied Digital’s rapid growth and our position as a leader in delivering high-performance AI infrastructure. The demand for AI capacity continues to accelerate, and North Dakota continues to be one of the most strategic locations in the country to meet that need. We have strong interest from multiple parties and are in advanced negotiations with a U.S. based investment-grade hyperscaler for this campus, making it both timely and prudent to proceed with groundbreaking and site development. We believe this new campus will strengthen our operations, increase our ability to scale, and create lasting value for both our customers and the communities we serve.”
-Wes Cummins, CEO of Applied Digital.
Applied Digital Corporation (NASDAQ:APLD) is a technology company engaged in designing, developing, and operating digital infrastructure solutions and cloud services in high-performance computing (HPC) and artificial intelligence.
8. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 41
Rivian Automotive, Inc. (NASDAQ:RIVN) is one of the 10 AI Stocks In The Spotlight For Investors. On August 14, Benchmark analyst Mickey Legg reiterated a Buy rating on the stock with a $18.00 price target. The affirmation follows an investor call with the company’s VP of Finance, Derek Mulvey.
The firm came away optimistic about Rivian’s growth trajectory, operational execution, and ability to scale production as it prepares for the R2 launch.
“We hosted an investor call with Rivian’s VP of Finance, Derek Mulvey, yesterday and came away confident in the company’s growth trajectory, operational execution, and ability to scale production into the R2 launch. Commentary reinforced our view that Rivian is positioned to leverage its technology, brand, and partnerships to capture meaningful share in the premium EV market while expanding into more affordable segments.”
The firm believes Rivian has the potential to scale profitably and that it deserves a premium valuation multiple compared to its peers in the electric vehicle market.
“We believe our thesis behind RIVN’s multi-year product roadmap, software-driven differentiation, and strategic partnerships remains intact and further underpins our conviction in its ability to scale profitably and command a premium valuation multiple relative to peers. In our view near-term volatility from policy shifts is outweighed by the medium-term production and margin expansion opportunity. Maintain Buy & $18.00 price target.”
Rivian Automotive, Inc. (NASDAQ:RIVN) is an automaker that creates and manufactures electric vehicles, as well as software and services.
7. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 47
HP Inc. (NYSE:HPQ) is one of the 10 AI Stocks In The Spotlight For Investors. On August 14, the company announced the launch of new gaming desktops, headsets and microphones at its Level Reforge event in Los Angeles.
The company introduced its OMEN MAX 45L Gaming Desktop, designed for gamers that desire elite performance, complete control, and effortless upgradability. The desktop has been designed to stay cool under-pressure, maximize air flow, power, and control.
HP also introduced the OMEN 35L Gaming Desktops for gamers, including a Stealth Edition model that serves as the official PC for League of Legends Esports and the VALORANT Champions Tour.
Meanwhile, the OMEN AI, its intelligence gaming optimization feature, has expanded its capabilities and now supports top titles like Valorant, League of Legends, Apex Legends, and Fortnite.
The HyperX gaming peripheral lineup includes the Cloud Alpha 2 Wireless headset offers 2x longer battery life than competitors’ gaming headsets and simultaneous wireless connections.
Finally, the HyperX FlipCast is a microphone with both USB and XLR connectivity options.
“Gamers expect more than just raw power. They want gear that aligns with how they play. From AI-enhanced performance to our most powerful OMEN desktops and personalized HyperX gear, this lineup is designed to deliver at every level, including the highest tiers of competitive play.”
– Josephine Tan, Senior Vice President and Division President of Personal Systems Gaming Solutions, HP Inc.
6. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 70
Equinix, Inc. (NASDAQ:EQIX) is one of the 10 AI Stocks In The Spotlight For Investors. On August 14, the company announced that it is working with leading energy companies to support the needs of Equinix data centers worldwide amid increasing global electricity demands.
The move reflects Equinix’s diversified portfolio power strategy to help alleviate potential power constraints in the future, leveraging advanced power technologies and working directly with utilities to strengthen the grid.
Not only has the company announced funding and supporting advanced transmission system upgrades with utility partners, but also investments in power solutions such as fuel cells and natural gas in order to enhance its operations while adding capacity resources to the grids.
In the future, the company also intends on supporting the development of advanced nuclear technologies to produce reliable, clean power.
Currently, Equinix’s partnerships include those with next-generation nuclear technology providers, including Oklo (500MW), Radiant (20 microreactors), ULC-Energy (250 MWe), and Stellaria (500 MWe).
Its investments in power solutions include an agreement with Bloom Energy to expand the deployment of solid-oxide fuel cells to more than 100MW at over 19 data centers in six states for power generation.
The company has achieved 96% renewable energy coverage globally, with 250 sites operating on 100% renewable energy in 2024. It plans on reaching 100% clean and renewable energy across its global portfolio by 2030.
“Access to round-the-clock electricity is critical to support the infrastructure that powers everything from AI-driven drug discovery to cloud-based video streaming. As energy demand increases, we believe we have an opportunity and responsibility to support the development of reliable, sustainable, scalable energy infrastructure that can support our collective future. By working with our energy partners, we believe we can support the energy needs of our customers and communities around the world by helping to strengthen the grid and investing in new energy sources.”
-Raouf Abdel, Executive Vice President of Global Operations at Equinix.
Equinix, Inc. (NASDAQ:EQIX) is a pure-play data center provider.
5. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 82
Autodesk, Inc. (NASDAQ:ADSK) is one of the 10 AI Stocks In The Spotlight For Investors. On August 12, the company announced the launch of new, more affordable pricing for Autodesk Flow Studio (formerly Wonder Studio) including its first free tier and a 50% price drop for the Lite plan.
The removal of upfront costs will enable artists to use premium artificial intelligence (AI) powered 3D tools, enabling them to create Hollywood-like animation and VFX. The move comes only a year after Autodesk acquired Wonder Dynamics, the company that created the technology.
Autodesk Flow Studio leverages AI to automate complex VFX tasks like motion capture, camera tracking, and character animation, allowing creators to focus on storytelling instead of technical setup. With only a video clip and few clicks, users are able to insert CG characters into live-action scenes and render them.
The AI-generated assets (e.g. clean plates, 3D scenes, alpha masks, camera-tracks) can also be exported to tools like Maya, Blender, or Unreal Engine for editing and fine tuning, accelerating complex animation and VFX workflows.
“Making Autodesk Flow Studio more accessible to everyone reflects our belief in a creator-first future – where AI empowers more artistic expression, not replaces it. By lowering the cost barrier, more storytellers are now able to explore the ways new AI-powered tools can help them bring their ideas to life, regardless of where they are along their creative journey.”
-Diana Colella, executive vice president of Media & Entertainment at Autodesk.
Autodesk, Inc. (NASDAQ:ADSK), a multinational software corporation, leverages generative AI technology to drive innovation across the design, construction, manufacturing, and entertainment industries.
4. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 85
Workday, Inc. (NASDAQ:WDAY) is one of the 10 AI Stocks In The Spotlight For Investors. On August 14, the company announced that it has acquired Flowise, a low-code platform that makes it easy to build AI agents—be it simple chatbots or complex automated workflows.
Through the acquisition, Workday is now equipped with an industry-leading agent builder that will boost innovation and enable customers and partners to safely design, launch, and manage AI agents.
Flowise makes the AI development journey easy through its intuitive visual builder and seamless integration across the AI ecosystem, allowing AI agents to be developed smoothly from idea to production.
Key benefits that the customers will stand to benefit from include accelerated AI innovation, customization, controllability, and transparency, and responsible AI development.
“Making AI agent development reliable and accessible is a major technical challenge. By bringing Flowise into Workday and investing in its open-source foundation, we are empowering our customers and partners to build and deploy their own AI agents on Workday. Flowise’s powerful platform makes this process simple, intuitive, and transparent.”
-Peter Bailis, Chief Technology Officer, Workday.
Workday, Inc. (NASDAQ:WDAY) provides enterprise cloud applications.
3. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 97
Oracle Corporation (NYSE:ORCL) is one of the 10 AI Stocks In The Spotlight For Investors. On August 14, the company announced an expanded partnership with Google Cloud to offer customers access to Google’s most advanced AI models, starting with Gemini 2.5, via Oracle Cloud Infrastructure (OCI) Generative AI service.
Oracle customers can now utilize the latest Gemini models to build AI agents for a wide range of use cases. These include multimodal understanding, advanced coding and software development tasks, productivity and workflow automation, and even research and knowledge retrieval.
Oracle intends on making Google’s entire range of Gemini models available via OCI Generative AI service through new integrations with Vertex AI. Looking ahead, the company will collaborate with Google Cloud to make Gemini models via Vertex AI available as an option within Oracle Fusion Cloud Applications. This will allow customers to have a broader choice to enhance workflows in finance, HR, supply chain, sales, service, and marketing.
“Oracle has been intentional in offering model choice curated for the enterprise, spanning open and proprietary models. The availability of Gemini on OCI Generative AI service highlights our focus on delivering powerful, secure, and cost-effective AI solutions that help customers drive innovation and achieve their business goals.”
– Clay Magouyrk, president, Oracle Cloud Infrastructure.
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 227
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks In The Spotlight For Investors. On August 14, Alphabet’s Google pledged that it will spend an additional $9 billion in Oklahoma over the next two years to expand cloud and artificial intelligence infrastructure.
It announced that it will build a new data center campus in Stillwater and expand its Pryor facility to boost U.S. AI and cloud capacity, along with education and workforce programs.
According to the company, a portion of the spending is included in the capex plan for 2025 that was previously announced, while the rest is appropriated for the future.
Last month, Alphabet raised its annual capital spending plans to an estimated $85 billion from $75 billion previously.
Google has also recentlyh committed $1 billion to AI education and training for U.S. higher education institutions and nonprofits in response to similar pushes from rivals OpenAI, Anthropic and Amazon.
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 AI Stocks In The Spotlight For Investors. On August 15, The Information reported that Meta is planning its fourth overhaul of artificial intelligence efforts in six months. According to the report, the company is expected to divide its new AI unit, Superintelligence Labs, into four groups.
These groups are a new “TBD Lab,” short for to be determined; a products team including the Meta AI assistant; an infrastructure team; and the Fundamental AI Research (FAIR) lab focused on long-term research. The TDB Lab, developing the newest version of Meta’s flagship large language model Llama, is expected to have multiple leaders.
With the AI arms race intensifying, CEO Mark Zuckerberg is accelerating his efforts to achieve artificial general intelligence — helping create new revenue streams.
The restructuring plans have not yet been announced internally and could still change, sources told The Information.
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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