According to a recent Reuters report, the Trump administration is reportedly initiating executive actions to boost energy supply to power the U.S. expansion of artificial intelligence. With the US and China locked in an AI arms race, speeding ahead requires a major boost in power infrastructure — something Trump is actively pushing to expand.
According to sources, some of the moves that the administration is considering include making it easier for power-generating projects to connect to the grid, as well as offering federal land to build data centers to expand AI technology. It will also be releasing an AI action plan and scheduling public events to draw public attention to the efforts.
Meanwhile, Chinese AI startup DeepSeek hasn’t been able to determine when it will release its R2 model. Its CEO, Liang Wenfeng, is not satisfied with its performance. While DeepSeek engineers have been working to refine the model, a report by The Information reveals how rapid adoption of R2 may be difficult due to a shortage of Nvidia server chips in China arising from U.S. export regulations.
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).
10. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 63
Dell Technologies Inc. (NYSE:DELL) is one of the 10 AI Stocks Investors are Watching. On June 26, Morgan Stanley analyst Erik Woodring reiterated the stock as “Overweight” and kept the price target at $135.00. The firm said it is sticking with shares of Dell.
Woodring believes that Dell is poised to perform well in the AI server market, with significant growth in its AI server sales. Firm projections suggest a major increase beyond current estimates, which is likely to contribute positively to Dell’s earnings per share. This is despite potential pressures on operating margins.
Dell has effective strategies in place for cost efficiency and storage outperformance, which is why Woodring is confident that Dell can handle margin pressures well. These strategies will help the company maintain operating margin expansion and also capitalize on the AI server market’s growth.
“With conviction in DELL’ s ability to offset gross margin pressure with cost efficiency in an AI server bull case, we remain OW-rated.”
Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
9. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 77
Palo Alto Networks, Inc. (NASDAQ:PANW) is one of the 10 AI Stocks Investors are Watching. On June 26, Stifel analyst Adam Borg reiterated a “Buy” rating on the stock with a $225.00 price target. The firm has revised its fiscal year 2026 revenue growth estimates to 12% year-over-year, down from the previous forecast of 13% and below the consensus estimate of 14%.
The firm expects Palo Alto’s subscription revenue to grow 13.5% year-over-year in fiscal 2026. Earlier, it had projected the revenue to grow nearly 16%. On the other hand, it has raised its product revenue growth forecast for fiscal 2026 to 5% year-over-year, up from the previous estimate of 1.5%.
Despite the revenue adjustments, Stifel continues to maintain its fiscal 2026 profitability and cash flow margin estimates for the company.
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity.
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