After US President Donald Trump gave the approval for Nvidia’s H200 processors to be exported to China, the AI chipmaker has begun making preparations.
Citing two sources, a Reuters report revealed that Nvidia has told Chinese clients it is evaluating adding production capacity for the AI chips after orders exceeded its current output level.
The sources said that demand for the H200s is so robust that Nvidia intends on adding more production capacity.
While the US administration has permitted export of the H200 AI chips, it is still uncertain whether China will allow the purchase of these chips. The country is already doing its best to wean off American technology and promote local semiconductor development.
“While this move reopens the door for U.S. revenue, the strategic train has already left the station.”
-Neil Shah, partner at Counterpoint Research, told CNBC on Tuesday.
Shah believes that China is catching up fast, and that it is only wise that it becomes self-sufficient to avoid being exposed to ongoing political and export-control uncertainty.
“Capability wise, the Chinese ecosystem is catching up fast from semi to stack with models optimized on the silicon and software for significant local consumption.” He added that China getting “locked in” to Nvidia chips is a “liability with a hanging sword of political uncertainty.”
“This makes domestic self-sufficiency the only viable long-term strategy for Beijing,” Shah 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 Q3 2025.
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10. Synopsys, Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 83
Synopsys, Inc. (NASDAQ:SNPS) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, Bank of America upgraded the stock to “Buy” from neutral and raised its price target to $560.00 from $500.00. The bank said that following latest results, shares of Synopsys are attractive at current levels.
“We believe the relative derisking of China and Intel sales along with strong growth at Ansys clears the decks for Synopsys to provide attractive stock catch-up potential and EPS beats for the next year.”
According to analysts led by Vivek Arya, the company’s non-GAAP EPS guidance for the full fiscal year 2026, at $14.36 midpoint, is well ahead of consensus ($14.11). The team raised its fiscal year 2026/2027 non-GAAP EPS estimates to $ 14.37 and $17, respectively.
“While the stock could consolidate at current-levels after the ~20% recent run, we believe it provides an attractive lower-beta, AI-levered/adjacent candidate with recurring sales tied to more resilient chip design R & D spending.”
Synopsys, Inc. (NASDAQ:SNPS) is a technology company that provides software and services for silicon-to-systems design, including electronic design automation (EDA) tools, silicon IP, and system verification and validation.
9. Arista Networks Inc (NYSE:ANET)
Number of Hedge Fund Holders: 92
Arista Networks Inc (NYSE:ANET) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, Evercore ISI reiterated an “Outperform” rating on the stock with a $175.00 price target. While the firm remains bullish on ANET’s networking demand, it has removed the stock from its Tactical Outperform list.
“We’re removing our Tactical OP on ANET following its Sep-qtr print last month. We believe the negative stock reaction since the report is a reflection of forward estimates not moving up in a material manner, as ANET maintained their expectation of 20% sales growth in CY26 and investors had speculated they would move higher.”
Since the firm added the stock to its TAP list in October, shares of the stock are down an estimated 7.5%; while the S&P climbed 3.3% in the same period. Despite this decline, September quarter saw revenue grow an estimated 27% year-over-year, driven by ramps across AI and strength on the enterprise side. Gross margins in the quarter were 65.2%; above expectations.
The firm believes that the lack of upside for ANET reflects conservative guidance and shipment variability issues. This conservatism, it believes, will set the stage for upside as CY26 progresses.
“Net/Net: We continue to believe that networking as a whole will see further outsized growth from not just scale-out but also scale-up and scale-across, with ANET well positioned to benefit from these accelerated investments.”
Arista Networks Inc (NYSE:ANET) develops, markets, and sells cloud networking solutions.
8. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
Micron Technology, Inc. (NASDAQ:MU) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, UBS analyst Timothy Arcuri raised the price target on the stock to $295.00 (from $275.00) while maintaining a “Buy” rating. Firm analyst sees stronger DRAM/NAND pricing, tightening supply, and pre-purchase orders supporting long-term margin expansion.
Arcuri anticipates fourth-quarter 2025 industry contract pricing for DDR memory to increase an estimated 35% quarter-over-quarter, up from the previous 21%. Meanwhile, NAND pricing is likely to rise about 20% quarter-over-quarter in contrast to the earlier projection of 15%.
In continuation of these strong pricing trends, the firm further forecast first-quarter 2026 contract pricing for DDR memory to boost another 30% quarter-over-quarter and NAND pricing to rise 20%.
Prices in different memory types are also likely to rise due to tight supply. This significant “undersupply” in DRAM and NAND memory is likely to last until the first quarter of 2027 and the fourth quarter of 2026. As a result, customers may secure volumes and contract pricing earlier in the quarter.
“We flag an even stronger pricing environment in both core DRAM and NAND than we had previously assumed,” he wrote. “Against this backdrop of tightening supply, we walk EPS estimates higher yet again and see EPS of ~$38 out in C2027E, justifying a PT of $295 (up from $275).”
Leaving revenue and earnings expectations for Micron’s fiscal first quarter unchanged, the analyst believes that the estimates were “well ahead of the company’s guidance and practically all driven by better pricing.”
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.
7. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 110
AppLovin Corporation (NASDAQ:APP) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, Jefferies raised its price target on the stock to $860.00 from $800.00 while maintaining a “Buy” rating. Analysts at the firm see strong ad growth potential for AppLovin, citing confidence in margin scalability and expansion beyond gaming.
Jefferies has deemed AppLovin as an “emerging leader in the mobile advertising market.” Three key factors support the firm’s bullish outlook. First, analysts see a near and medium-term upside to revenue estimates in the advertising business.
Second, they believe AppLovin may achieve a long-term adjusted EBITDA margin of 80%, highlighting its profitability potential. Finally, the firm believes that the company may expand beyond gaming, powering the “next leg of rev growth in FY26 and beyond.”
“The extension into e-commerce and other beyond gaming verticals gives us confidence that the advertising business can maintain 30%+ growth over the next few years.”
AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology.
6. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 120
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, Barclays reiterated the stock as “Equal Weight” with a $350 price target. According to the bank, Tesla’s delivery numbers “likely won’t matter for the stock.”
“While we expect soft 4Q deliveries, they likely won’t matter for the stock.”
According to analysts surveyed by FactSet, Tesla will deliver an estimated 450,000 vehicles in the fourth quarter of 2025, down 9% from 496,000 from the last period.
In contrast, the previous quarter saw the automaker delivering more vehicles than any other quarter ever. This boost was driven by the last stretch of the federal EV tax credit.
Analysts on Wall Street have a consensus “Buy” rating on the stock. The average price target of $250 implies a 37.05% upside, however, the Street-high target of $432.78 implies an upside of 137.26%.
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
5. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 122
Oracle Corporation (NYSE:ORCL) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, UBS analyst Karl Keirstead lowered the price target on the stock to $325.00 (from $380.00) while maintaining a “Buy” rating. The firm remains constructive on the stock despite mixed earnings results driven by Oracle’s $523B backlog conversion.
According to the firm, Oracle’s earnings released on December 11 fell slightly short of investor estimates. However, it remains optimistic regarding the company’s massive deal backlog deal, anticipating it to drive strong revenue growth.
“Oracle posted 2Q/Nov results (13% c/c revs growth, 66% cloud infra growth) that fell slightly short of investor estimates, as did the messaging around leverage/financing, but in our view the conversion of the massive $523b deal backlog to high revs growth in 2H/FY27 is compelling enough that we’re sticking with our Buy rating.”
Unlike three months ago, the stock is no longer reacting to incremental backlog growth. This is despite a significant $68 billion increase in remaining performance obligations during the quarter, driven by deals with Meta and Nvidia. Investors would rather like to see higher backlog and capital spending translation into revenue.
“Investors need to see higher backlog and capex convert to revs, and total revs growth of 13% was in-line (albeit up from 9% a year ago), cloud infra growth of 66% was a shade light (we were modeling 68%), SaaS growth of 11% fell short of Oracle’s guide for an accel and the 3Q/Feb guide for 37–41% Cloud revs growth was a bit short of our 42% estimate.”
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
4. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 183
Broadcom Inc. (NASDAQ:AVGO) is one of the 10 AI Stocks in the Spotlight for Investors. On December 12, Evercore ISI raised its price target on the stock to $490.00 from $403.00 on Friday, while maintaining an Outperform rating. The firm views Broadcom’s post-earnings dip as an attractive entry point based on its AI trajectory. AVGO’s revenue visibility further supports upside.
Broadcom posted October quarter results on December 11 after markets closed. The company’s revenue came in at $18.02 billion, solidly beating expectations of $17.46 billion. Meanwhile, adjusted earnings per share (EPS) rose 37% to $1.95, beating expectations of $1.87.
More importantly, growth in the artificial intelligence (AI) semiconductor business came in at 74%, beating Broadcom’s guidance of 66% growth. Despite these numbers, Broadcom shares plunged an estimated 4% after the earnings call ended.
The firm believes that this post-earnings plunge offers an attractive entry point for the stock.
“Buyers of Weakness. We reiterate our O/P rating for AVGO after it printed OctQ revenues 3% above and raised JanQ revenues by 4%, with AI revenues accelerating from +74% YoY to +100% YoY and management highlighting visibility for AI revenues to at least 2x in both FY26 and FY27. We believe post-earnings offer an attractive entry point with shares lower by 5% AH considering implied 2027 P/E of 29x and 2026 PEG of 1.1x. We increase our PT to $490 reflecting 40x our 2027 EPS of $13.36 discounted back.”
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, BofA Securities analyst Vivek Arya reiterated a Buy rating on the stock with a $275.00 price target.
The bank believes that Nvidia shares remain compelling at current levels due to its unmatched leadership, long-term visibility, and margin durability.
The firm hosted Nvidia’s Investor Relations representative Toshiya Hari for a virtual investor meeting, during which several key takeaways were highlighted. First, the firm noted how Nvidia’s GPUs are a “full generation ahead of competition.”
Current available GPU-based LLMs were trained on old Hopper architecture instead of Blackwell (LLMs to be available in early 2026), which offers 10x–15x better generation-over-generation performance.
Second, the analyst noted that the next-generation Vera Rubin is on track for 2H26 and there are no changes to roadmap. Pre-fill inference CPX version also remains scheduled for Q4 2026.
Demand for the company remains broad-based, led by significant and growing customers such as Google. Major model builders also continue to rely on Nvidia for training.
The company also enjoys both demand and supply visibility into a $500B sales outlook in CY25-26 “at the minimum” along with incremental OpenAI/Anthropic partnerships.
The firm further highlighted Nvidia’s co-design with customers, with an end-to-end platform of CPUs, GPUs, scale-up, scale-out, scale-across, and software as its key competitive moat, stating that it is something no one else can replicate.
While the impact of recent export approval for the H200s is too early to assess, the firm noted that the mid-70% GM outlook remains unchanged despite rising memory costs.
“Meanwhile, we continue to believe valuation at 25x/19x CY26E/27E PE remains compelling given it represents just ~0.5x earnings growth rate versus broader Mag-7 and growth peers at ~2x.”
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 243
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, Piper Sandler raised its price target on the stock to $365.00 from $330.00 while maintaining an “Overweight” rating. Analysts hold a positive outlook on the stock based on revenue impact from AI ad tools despite valuation stretch.
Piper Sandler revealed findings from its AD buyer survey, noting how Search is taking share of digital budgets for the first time in 3 years. Google’s return on investment remains robust, with Performance Max (Pmax) and Gemini acting potent in driving incremental revenue for the company.
Google Performance Max (PMax) is an AI-powered campaign in Google Ads, whereas Gemini is Google’s family of advanced, multimodal AI models.
“Impressive fundamentals indeed, but everyone agrees: GOOGL’s multiples are up ~50% in the last year. We boost estimates & raise PT to $365, reiterate OW.”
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 December 11, Piper Sandler analyst Thomas Champion reiterated an Overweight rating on the stock with an $840.00 price target. The firm has tagged Meta as its Top Large Cap Pick, driven by ad market tailwinds and undervalued fundamentals.
Meta shares have delivered mid-single-digit gains over the past year, even though multiples have compressed by an estimated 10%, the firm noted. Their Ad buyer survey have further pointed to accelerating market growth heading into 2026.
This setup is particularly favorable for Meta due to its “evergreen” position in Social where it plays a dominant role in social media advertising. As a result, Piper Sandler anticipates META to benefit from an estimated 20% growth year-over-year in 2026.
“We’re buyers here with near-peak Opex/Capex concern, which is overstated in our view.”
Analysts at the firm have also pushed back on concerns that Meta’s operating and capital expenditures are nearing peak levels.
Meta Platforms has been expanding its advertising capabilities and also invests heavily in artificial intelligence and the metaverse.
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.
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