The Bank of England has warned that global financial markets may tumble if investors lose confidence in the prospects of artificial intelligence, or even the independence of the US Federal Reserve, Reuters reported on Wednesday.
BoE has cautioned how the share price valuations on U.S. stock markets are now almost as high as seen near the peak of the dotcom bubble on some measures. It further noted that US government bonds may fall in the case of weakened Fed credibility.
“The risk of a sharp market correction has increased.”
-BoE’s Financial Policy Committee said in a quarterly update, its sharpest warning yet about the dangers of an AI-triggered market slump.
With 30% of the U.S. S&P 500’s valuation made up by a mere five large companies who have heavily bet in AI, AI has now become a prime driver of US stock prices.
“This, when combined with increasing concentration within market indices, leaves markets particularly exposed should expectations around the impact of AI become less optimistic,” the BoE said.
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. Penguin Solutions, Inc. (NASDAQ:PENG)
Number of Hedge Fund Holders: 25
Penguin Solutions, Inc. (NASDAQ:PENG) is one of the 10 AI Stocks In The Spotlight For Investors. On October 8, Rosenblatt lowered its price target on the stock to $30.00 from $36.00 while maintaining a “Buy” rating. The firm noted how Penguin’s fourth quarter fiscal 2025 revenue was slightly below consensus, despite its Non-GAAP EPS exceeding forecasts.
The company’s management guided for 6% year-over-year revenue growth for fiscal 2026, which is less than the 10% growth analysts had predicted.
Rosenblatt stated how the lower guidance includes only software and services revenue from Meta. This is because the company doesn’t yet have clear visibility into new Meta hardware deployments, which is mostly a timing issue related to Meta’s ongoing RSC buildout and Penguin’s own fiscal calendar.
With the addition of a tier-1 financial institution and a major consumer products company, Penguin has increasingly been diversifying its customer base beyond hyperscalers. Its advanced Computing segment reported 75% year-over-year revenue growth for fiscal 2025. Meanwhile, its Integrated Memory business is anticipated to grow 10-20% year-over-year in fiscal 2026.
The firm believes that Penguin’s HPC/AI software and services have strong potential, particularly as enterprise AI adoption scales. This is why it recommends investors to buy PENG shares on the current weakness tied to Meta’s hardware order timing.
Penguin Solutions, Inc. (NASDAQ:PENG) is a leading AI and HPC computing company engaged in the design and development of enterprise solutions worldwide.
9. CoreWeave, Inc. (NASDAQ:CRWV)
Number of Hedge Fund Holders: 29
CoreWeave, Inc. (NASDAQ:CRWV) is one of the 10 AI Stocks In The Spotlight For Investors. On October 6, the company announced an agreement to acquire Monolith AI Limited, a software company known for its expertise in applying AI and machine learning to complex physics and engineering problems.
The agreement leverages both Monolith’s simulation and test-driven machine learning capabilities and CoreWeave’s purpose-built AI cloud to create a full-stack platform for industrial and manufacturing enterprises.
The move will allow enterprises to significant shorten their R&D cycles, accelerate product development and design, and help leverage competitive advantage through AI-driven innovation.
“Every leader we meet across the industrial and manufacturing sectors knows AI can transform their business. What they need are the right tools to use the technology to solve intractable physics and engineering problems. Those challenges have historically slowed industrial innovation, and Monolith has closed that gap. Together we will help these enterprises better harness AI to accelerate breakthroughs and bring better products to market faster.”
-Brian Venturo, Co-founder and Chief Strategy Officer at CoreWeave.
CoreWeave, Inc. (NASDAQ:CRWV) is a cloud platform provider that provides equipment for AI and other computing purposes.
