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.
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