Ark Invest’s Brett Winton directs research and helps set strategy for the Ark Innovation ETF (ARKK) and Ark Space Exploration & Innovation ETF (ARKX). Recently, he has been focused on Big Tech and aerospace.
“We are in the earliest stages of a massive technological transformation here. There’s going to be bumps along the road, but we think the right thing to do is to lean into innovation over the long term.”
– Winton told CNBC’s “ETF Edge.”
Winton is particularly bullish on artificial intelligence infrastructure, stating how he believes that data center investment is soon going to explode.
“I think we’re in the first pitch… We’re still in warmups. We’re still singing the national anthem here. The investment in AI data centers is going to explode. They’re going to build data centers that are 10x the size of the current largest data centers, and that’s going to yield a performance advance in AI that’s mind-blowing even relative to what’s available today.”
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 overhead view of a bustling stock exchange, with brokers and traders exchanging stocks.
10. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 91
Intel Corporation (NASDAQ:INTC) is one of the 10 AI Stocks in the Spotlight Right Now. On July 22, Loop Capital initiated coverage of the stock with a “Hold” rating and $25 price target. According to the firm, TSMC’s advanced node manufacturing is better than Intel’s.
Moreover, the firm believes that TSMC is the “obvious manufacturing partner” for Intel to make its products more competitive with AMD, Nvidia, and Arm. The firm has, at the same time, warned that if Intel Foundry can’t get enough volume from Intel products, then the company may struggle to cover its fixed costs.
This is why it is likely to be more constructive for Intel shares if it shifts away from the foundry.
Intel Corporation (NASDAQ:INTC) designs and sells computing hardware, semiconductor products, and AI-driven solutions for various industries.
9. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 94
Snowflake Inc. (NYSE:SNOW) is one of the 10 AI Stocks in the Spotlight Right Now. On July 22, Bloomreach, the agentic platform for personalization, announced that it has entered into a new partnership with the Snowflake AI Data Cloud.
The partnership will connect customer data stored in Snowflake with Bloomreach’s AI-powered marketing solutions so that businesses can leverage customer engagement with maximum personalization. Together, the two companies will help bridge the gap between data infrastructure and marketing innovation.
“It’s not enough for marketers to just understand their customers — they need to put that understanding into action, too. This partnership ensures they can activate their Snowflake data instantly and intelligently through Bloomreach, fueling personalized experiences that drive measurable business growth.”
-Meera Murthy, General Manager and Vice President of Product, Bloomreach Engagement.
Snowflake Inc. (NYSE:SNOW) is a cloud-based data storage company providing a data analysis, storage, and sharing platform.
8. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 96
AppLovin Corporation (NASDAQ:APP) is one of the 10 AI Stocks in the Spotlight Right Now. On July 22, Benchmark analyst Miike Hickey reiterated a “Buy” rating on the stock with a $525.00 price target. The rating affirmation comes ahead of the company’s second-quarter earnings report.
Hickey anticipates AppLovin to exceed expectations in its Q2 2025 report, which is due for release on August 6, followed by a conference call. The positive optimism toward the stock is largely due to AppLovin’s high-margin Advertising segment, which continues to grow strongly.
Its emerging web category is also doing very well. At the same time, Benchmark acknowledges that there may be scrutiny regarding the company’s third-quarter guidance. This is largely because Unity has recently launched its AI-powered ad platform, Vector, which is sparking questions regarding competitor dynamics.
Regardless of these challenges, the firm is confident in AppLovin’s competitive advantages, anticipating significant growth in the second half and beyond.
AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology.
7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 104
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks in the Spotlight Right Now. On July 22, Wedbush analyst Daniel Ives reiterated an “Outperform” rating on the stock with a $500.00 price target. Investor sentiment has drastically shifted from what it was three months ago, with investors now viewing Elon as a “wartime CEO” with a focus on AI and autonomous driving. Updated model Y is thankfully leading to a recovery in China sales. Near-term challenges persist, but the firm is bullish on the stock backed by Tesla’s long-term AI ambitions.
“The set-up into Tesla earnings tomorrow after the bell is a dramatically different one than 3 months ago. While on the April earnings call the big focus was Musk officially leaving the Trump Administration and pressure to refocus on being CEO on Tesla….now investors are seeing more of a “wartime CEO” as Elon is laser focused on the Robotaxi expansion in Austin with more cities soon on the docket for this key autonomous initiative. Front and center for investors are the AI initiatives happening under the hood of Tesla with the Street listening carefully for any more direction around a Tesla investment into xAI which will require a shareholder vote later this year. There are a number of other key endeavors at Tesla including Optimus and the future of robotics with Tesla one of the clear future leaders in AI in our view. It starts with autonomous then robotics is the view of Tesla….bulls as we believe the autonomous valuation is worth $1 trillion alone to the Tesla story over the next few years.
While the company has seen significant weakness in China in previous quarters given the rising competitive landscape across EVs, Tesla saw a rebound in June with sales increasing for the first time in eight months reflecting higher demand for its updated Model Y as deliveries in the region are starting to slowly turn a corner with China representing the heart and lungs of the TSLA growth story. Despite seeing more low-cost models enter the market from Chinese OEMs like BYD, Nio, Xpeng, and others, the company’s recent updates to the Model Y spurred increased demand while the accelerated production ramp-up in Shanghai for this refresh cycle reflected TSLA’s ability to meet rising demand in the marquee region. If Musk continues to lead and remain in the driver’s seat at this pace, we believe Tesla is on a path to an accelerated growth path over the coming years with deliveries expected to ramp in the back-half of 2025 following the Model Y refresh cycle.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks in the Spotlight Right Now. On July 22, UBS analyst David Vogt reiterated a “Neutral” rating on the stock with a $210.00 price target. The firm cited a major drop in iPhone demand during June after two months of strong sales behind the neutral rating affirmation.
“Following two strong well above seasonal months driven by fears of a potential iPhone price increase related to broad based tariffs, we estimate iPhone sell-through in the month of June declined 18% YoY as demand fizzled. Therefore, for the June quarter, we estimate iPhone units came in around 45M or up 3.4% YoY, roughly 1.5M above our prior estimate. Moreover, continued weakness in the US dollar during the quarter should flip FX to a slight tailwind from prior expectations of a ‘slight headwind’ to revenue in the June quarter. As such, we slightly raise our June quarter estimates but lower Sept given likely iPhone softness, below seasonal, given the prior pull-in.”
Apple is a technology company known for its consumer electronics, software, and services.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks in the Spotlight Right Now. Morgan Stanley reiterated the stock as “Overweight,” stating that Nvidia is a top idea heading into earnings in August.
“Expecting the pace of revenue and EPS upside to accelerate on the earnings report, driving compelling risk reward into the quarter.”
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $185 implies a 10.8% upside, however, the Street-high target of $250 implies an upside of 49%.
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, providing high-performance GPUs and platforms that power data centers, autonomous vehicles, robotics, and cloud services.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 227
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks in the Spotlight Right Now. On July 22, Stifel analyst Mark Kelley raised the price target on the stock to $218.00 (from $200.00) while maintaining a “Buy” rating. The rating affirmation follows positive Search trends, particularly AI Overviews, which continue to monetize at a healthy rate despite weaker clicks.
The firm highlighted that better conversion rates for AI-driven search results are resulting in higher cost-per-click (CPC) metrics for the company’s core search business. It also believes that Alphabet is likely to report positive upside to estimates in its second-quarter results. However, positive market reaction may fade after the earnings.
This is because some ongoing challenges have been making the stock “controversial,” such as scepticism over the AI landscape and several Department of Justice lawsuits that the company is facing.
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
Meta Platforms, Inc. (NASDAQ:META) is one of 10 AI Stocks in the Spotlight Right Now. On July 22, Stifel analyst Mark Kelley raised the price target on the stock to $845.00 from $655 while maintaining a Buy rating. The rating comes as part of the firm’s digital ads group Q2 earnings preview.
According to the firm, April was slow initially but improved, with June likely being the best month within the quarter. The firm prefers long positions in Meta and Trade Desk among the group.
Particularly for Meta, the firm stated that it anticipates upside to second-quarter figures and slightly better guidance. Early feedback on WhatsApp monetization efforts has been noted to be positive.
Moreover, this new revenue stream is likely to be incremental to Meta budgets rather than taking it away from Facebook and Instagram advertising. The research note also highlighted how some market participants are expecting a fourth-quarter ramp in WhatsApp monetization.
A potential wildcard for the company is its capital expenditure. This is especially true in light of the company’s intra-quarter commentary about artificial intelligence hiring initiatives.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 AI Stocks in the Spotlight Right Now. On July 22, Citi raised its price target on the stock to $613.00 from $605.00 while maintaining a “Buy” rating. According to the firm, Microsoft is poised for “another strong quarter of positive revisions and upside to Q4+Q1 Azure numbers” for its fiscal fourth quarter.
The firm’s reseller survey has demonstrated one of the strongest growth and quota attainment performances in the course of four years. The research note further highlighted how partner checks have shown that Microsoft’s CoPilot and Dynamics offerings are performing well.
Owing to its artificial intelligence exposure, business model quality, and long-term pricing and margin power, Microsoft remains Citi’s top pick in the sector. The firm views the stock as “nearly unmatched in enterprise software.”
“We reiterate our bullish view into MSFT’s F4Q results, anticipating another strong quarter of positive revisions and upside to Q4+Q1 Azure numbers. Our reseller survey yielded one of the strongest growth/ quota attainment performances in 4+ years, while partner checks highlighted CoPilot + Dynamics strength. After raising Azure estimates in mid-June, where Citi FY26E Azure growth is still ~3pts above the Street, we nudge estimates up again. This takes our TP to $613 (based on 30x FY28 EPS discounted back) and suggests continued upside ahead. Microsoft remains our top pick given the exposure to AI, quality of business model and long-term pricing/margin power that we view as nearly unmatched in enterprise software.”
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the 10 AI Stocks in the Spotlight Right Now. On July 22, Scotiabank analyst Nat Schindler raised the price target on the stock to $275.00 from $250.00, while maintaining a “Sector Outperform” rating.
The firm believes that even though investor sentiment remains mixed as we head into second-quarter results due on July 31st, Amazon is probably subject to the weakest sentiment amongst all three hyperscalers in its coverage.
While there were some concerns that Amazon Prime Day failed to achieve modest performance, later reports confirmed that the shopping event did achieve record sales. Sales surpassed any previous four-day event that included a Prime Day event.
Scotiabank has also noted potential margin pressure for Amazon Web Services (AWS), implying how capacity constraints may lead to a decline from the record margins achieved in the first quarter.
Meanwhile, investor concerns pertaining to artificial intelligence have also been acknowledged, stating how there are “murmurs that AWS’ struggle to develop a strong AI model has fueled a perception that it is trailing behind Google within AI development.”
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions.
While we acknowledge the potential of AMZN 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 AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 10 AI Stocks on Wall Street’s Radar and 10 AI Stocks Analysts Are Tracking Closely
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
