According to Federal Reserve Chair Jerome Powell, the artificial intelligence boom isn’t the same as the dotcom bubble of the late 1990s.
“This is different in the sense that these companies, the companies that are so highly valued, actually have earnings and stuff like that.”
He noted how unlike past tech booms, the current AI spending is driven by real companies and real profits.
“I won’t go into particular names,” he noted, “but they actually have earnings.
“These companies … actually have business models and profits and that kind of thing. So it’s really a different thing.”
Powell’s comments highlight how billions of dollars of investment in artificial intelligence has become a real driver of economic growth.
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. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 44
Bloom Energy Corporation (NYSE:BE) is one of the 10 AI Stocks in the Spotlight This Week. On October 30, BTIG raised the firm’s price target on the stock to $145 from $80 and kept a “Buy” rating on the shares. The price target raise follows BE’s third quarter 2025 financial results.
BE stock was up 19% following the earnings print where it reported a revenue for $519M, beating consensus estimates by 21%. Its fuel cell technology has become more attractive toward investors driven by the rising demand from AI data centres.
BTIG noted how BE received a Wyoming data center project in Q3 for ~900MW of fuel cells, with construction starting as early as 2026. It has also entered in a Brookfield partnership in October for “up to $5B of fuel cell capacity to support data center buildout.”
The firm is constructive on the stock in the “wake of recent agreements,” growing pipeline visibility, and expectations that “Fremont’s spare manufacturing capacity will support higher utilization.”
“We are more constructive on BE’s ability to secure a larger than expected share of manufacturing capacity in the wake of recent agreements (consensus points to <50% utilization in 2027). And with a growing number of projects looking to break ground while competing gas-fired generation faces multiyear delays, we look for BE to begin converting this capacity into firm backlog in the near-term. Bottom line: BE continues to sign agreements powering hyperscale data center projects. We increase our PT on growing pipeline visibility and expectations that Fremont’s spare manufacturing capacity will support higher utilization.”
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers.
9. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 78
ASML Holding N.V. (NASDAQ:ASML) is one of the 10 AI Stocks in the Spotlight This Week. On October 29, Bernstein SocGen Group reiterated its Market Perform rating on the stock with a $935.00 price target.
The firm remains neutral on the stock following reports of a Silicon Valley startup that claims to have developed a cheaper semiconductor manufacturing method.
According to analyst David Dai, X-ray lithography is not a new concept, and that EUV (Extreme Ultraviolet) technology has emerged from its development efforts.
“Can a start-up challenge ASML and TSMC with radical lithography tool? According to news reports, a Silicon Valley start-up claims to have developed a radically cheaper semiconductor manufacturing method by using a proprietary particle accelerator and compact lithography machine, and it has demonstrated 12nm features with a custom X-ray light source. We provide our views below. X-ray lithography? While this might be a new idea to many investors today, people who have been in the field long enough would remember that’s the concept dated before EUV—in fact, X-ray lithography was first proposed in 1972, but finally was given up in around 2000, and EUV (originally called “Soft X-ray”) was born in its ashes.”
Bernstein highlighted several challenges with the X-ray technology and also expressed scepticism regarding the start up’s claims. As such, it views limited disruption risk from the claims and views ASML’s dominance as intact.
“In theory X-ray (with wavelength of 1-10nm) has shorter wavelength than EUV (13.5nm), and would have offered better lithography resolution, but too many problems around it proved insurmountable. No optics could be used for X-ray to bend it to focus, hence X-ray lithography has to be proximity lithography, meaning the mask needs to be very close (sub-microns) to the wafer, which causes huge alignment and diffraction issues. The mask needs to be tiny, any bigger mask would lead to lack of uniformity, hence restricting the size of chip patterned area. The mask needs to be made with exactly the same feature size as the printed pattern; in contrast, EUV lithography with 4x reduction ratio, meaning the features on masks can be 4x bigger than the actual pattern to be written. While the start-up claims to have solved the light source issue (which is a big question mark in itself), it’s unlikely to solve these intrinsic issues with X-ray lithography. Even if they can bring down the cost of particle accelerator (which costs billions or at least hundreds of millions), there is… a lack of ecosystem support.”
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
8. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 82
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the 10 AI Stocks in the Spotlight This Week. On October 28, Citi raised the firm’s price target on the stock to $175 from $170 and kept a Neutral rating on the shares. The rating follows QCOM’s announcement of two products for artificial intelligence, along with a deal with Saudi Arabia’s startup Humain.
The company unveiled two artificial intelligence chips for data centers, on October 27, which will be available next year. The two new chips, known as AI200 and AI250, are designed for improved memory capacity and running AI applications, or inference.
Meanwhile, the deal with Humain will allow QCOM to supply Humain with up to 200 megawatts of capacity. This deal, the firm believes, represents a $1.0B in sales and 25c earnings per share opportunity for the company.
Discussing the two developments, the firm stated how QCOM’s recent rally has been due to a short squeeze but is doubtful whether the company will be successful in AI considering how it is “several years behind” AMD (AMD) and Nvidia (NVDA).
QUALCOMM Incorporated (NASDAQ:QCOM) develops wireless technologies, supplies chips for mobile, automotive, and IoT, licenses patents, and invests in emerging tech.
7. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 104
Adobe Inc. (NASDAQ:ADBE) is one of the 10 AI Stocks in the Spotlight This Week. On October 30, Barclays analyst Saket Kalia reiterated an Overweight rating on the stock with a $465.00 price target. The firm sees AI momentum and ARR growth as key value drivers for the company despite accounting shift concerns.
Barclays highlighted three key takeaways from Adobe’s MAX user conference and analyst Q&A. One of these takeaways is how the company is striving to be a “one stop shop” for creative design by bringing in outside models.
Despite broader concerns about the impacts of generative AI, the company is experiencing growth in seats/content creation.
Adobe is also transitioning toward a Total ARR reporting/guidance framework, which is a concern that may be met with scepticism. However, analysts believe that continued double digit growth will serve as a real value driver for the company.
Finally, Adobe’s conversational experiences may increase costs initially, the analysts noted. However, they will likely decrease opex spend used for training over time.
“Three key takeaways from Adobe’s MAX user conference and analyst Q&A: (1) ADBE’s strategy for AI is to aggregate third party models for the customer to use Adobe as the ‘one-stop-shop’ for creative design, and it sounds like the company is seeing ‘unambiguous’ growth in seats/content creation despite the fear of headwinds from Gen AI; (2) Adobe will be moving to a Total ARR reporting/guidance framework, which marks the second change in as many years for financial disclosure and will likely be met with skepticism, but we think that it is more important that the customer groupings should continue to grow double digits, which is the real driver of value for the company; and (3) we discuss the conversational experiences Adobe announced at the opening keynote and that while third-party inferencing may drive costs higher, this should alleviate some opex spend used for training.”
Adobe Inc. (NASDAQ:ADBE) is a software company that provides digital marketing and media solutions.
6. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is one of the 10 AI Stocks in the Spotlight This Week. On October 30, Wells Fargo analyst Michael Turrin raised the price target on the stock to $1,275.00 from $1,225.00 while maintaining an Overweight rating driven by the company’s higher FY25-26 outlook.
The firm believes that ServiceNow is one of the best growth assets in large-cap software.
“Model Updates: We’re revising our estimates higher to account for the raised 2025 guide and flow-through to 2026 and beyond. FY25 revs to/from $13.2B/$13.2B, FCF $4.5B/$4.2B, EPS $17.43/$17.09. FY26 revs $15.6B/$15.5B, FCF $5.4B/$5.1B, EPS $20.64/$20.19. Valuation: NOW shares are trading at 12.5x NTM EV/S and 35x NTM EV/FCF. Our $1,275 PT (raised from $1,225 on higher estimates) is derived from 42.5x EV/FCF on our Fwd NTM est (implies 15x EV/S), an admitted premium, but one we believe is warranted given NOW’s profile as one the best growth assets in large-cap software.”
ServiceNow, Inc. (NYSE:NOW) is a technology company that offers a cloud-based software platform for automating business workflows within an enterprise.
5. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 115
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks in the Spotlight This Week. On October 29, Bank of America raised its price objective on the stock to $471 from $341 but maintained a Neutral rating. The firm believes that Tesla remains a clear leader in “physical AI” but warned that its valuation remains stretched.
According to firm analysts, the new price target is based a sum-of-the-parts (SOTP) valuation, assigning an estimated 45% of Tesla’s total value to its robotaxi business, 17% to Full Self Driving, 12% to core automotive, and 6% to energy generation and storage, and 19% to Optimus.
“We raise our PO to $471 from $341, still based on our sum-of-the-parts (SOTP) analysis. Recall that our valuation approach is based on a discounted cash flow (DCF) analysis built out until 2040. Overall, we find that TSLA’s core automotive business represents around 12% of the total value while robotaxi is 45%, FSD is 17%, Energy Generation & Storage is around 6% and Optimus is 19%. Our PO revision is driven by a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks in the Spotlight This Week. On October 30, TD Cowen raised its price target on the stock to $335.00 from $280.00 while maintaining a Buy rating. The rating affirmation follows Alphabet’s quarterly earnings report.
The tech giant’s third-quarter earnings beat analyst expectations, with total revenue beating consensus estimates by 2.4%. Search, Cloud, and YouTube all beat expectations by 3%, the firm noted.
Meanwhile, operating income was 2.5% above the firm’s estimate, with margins improving 350 basis points year-over-year, excluding an EC fine.
According to Alphabet’s management, artificial intelligence has significantly driven growth in both Search and Cloud segments.
Moreover, their Gemini AI platform reached 650 million monthly active users, with queries increasing threefold quarter-over-quarter.
The firm also highlighted how the tech giant has raised its 2025 capital expenditure guidance to approximately $92 billion at the midpoint. This is up from the previous guidance of $85 billion, which reflects continued investment in AI infrastructure.
“Beat Across the Board Led by AI Tailwinds; GOOG total rev was +2.4% vs cons. on ~3% beats at Search, Cloud, & YouTube. Op Inc was +2.5% vs our est (and margins were +350bps y/y x-EC fine) as mgmt. credited AI for driving growth at Search & Cloud. Mgmt. raised ’25 capex guide (again) to ~$92BN (midpoint) vs $85BN prior. Gemini reached 650MM MAUs, and queries were +3x q/q. We raised LT ests, incl capex; PT to $335, maintain Buy. GOOG +7% AH.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks in the Spotlight This Week. On October 30, JPMorgan reiterated the stock as “Overweight,” stating that Nvidia is a beneficiary of “strong AI server spending.”
“We expect AI-related demand to drive a multi-year runway of growth for NVDA’s datacenter GPU business…”
On the same day, Mizuho raised the firm’s price target on the stock to $235 from $225 and kept an Outperform rating on the shares. The firm believes that Nvidia remains well positioned to “continue leading the AI race.”
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 260
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 AI Stocks in the Spotlight This Week. On October 30, TD Cowen lowered its price target on the stock to $810 from $875 while maintaining a Buy rating.
The price target adjustment follows Meta’s Q3 results, where the tech giant reported revenue and operating income exceeding consensus estimates by 4% and 5% respectively.
Despite this robust Q3 beat and upbeat Q4 outlook, the company’s rising AI capex/opex has tempered near-term margin view. TD Cowen noted how Meta has raised both its 2025 capital expenditure and operating expense guidance.
“Strong 3Q Results Overshadowed By Ramping AI Infrastructure Spend; META 3Q rev & Op Inc. were +4% & +5% vs cons ests on strong pricing & volume growth. 4Q rev guide was 3% above cons est (high end) amid AI-driven gains to engagement & monetization engines. Mgmt. raised ’25 capex & opex guides, and now expects accel’ing ’26 opex growth & higher y/y dollar capex growth amid ramping compute. We raised opex & capex outlook; PT to $810, maintain Buy, shares (6%) AH.”
Meta Platforms has been expanding its advertising capabilities and also invests heavily in artificial intelligence and the metaverse.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 AI Stocks in the Spotlight This Week. On October 30, Morgan Stanley reiterated the stock as “Overweight” and raised its price target on the stock to $650 per share from $625 following earnings.
“Microsoft exceeded consensus across all three business segments, yielding a ~3% total revenue beat, as the company executes well to ramping AI demand.”
In an investor note, the analysts shared how Microsoft is benefiting from all major technology trends driving demand in software. At the same time, CIOs are choosing to buy more of their software from fewer vendors.
This has placed Microsoft “in the all the right places at the right time.”
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
While we acknowledge the potential of MSFT 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 MSFT 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 11 Must-Watch AI Stocks on Wall Street
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