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.
8. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 95
AppLovin Corporation (NASDAQ:APP) is one of the 10 AI Stocks Investors are Watching. On June 26, Piper Sandler analyst James Callahan raised the price target on the stock to $470.00 (from $455.00) while maintaining an “Overweight” rating.
In a research note, the analyst told investors that despite having weakness in AppLovin’s supply-side trends, it remains a buyer of its shares. AppLovin is expanding well above Digital Ad peers and expanding into new verticals.
“Mixed Data, But Explainable…Remain Buyers; Proprietary PSC work points to some weakness in APP supply-side trends, but this has not come up in checks. App-ads.txt data shows mobile gaming declines from April, but mostly from changes at one studio (that also impacts peers). APP’s share of new SDK adds ticked down through 2Q25, but mostly a function of AdMob gains which are majority non-gaming. Sellers.json total supply growth remains strong. We recently caught up with IR, and update estimates to fully remove Apps through 2Q25 as it will be reported as discontinued ops. See last Network Effects (LINK). We remain buyers, PT up to $470 from $455. Reiterate OW.”
AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology.
7. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 96
Micron Technology, Inc. (NASDAQ:MU) is one of the 10 AI Stocks Investors are Watching. On June 26, UBS raised the firm’s price target on the stock to $155 from $120 and kept a “Buy” rating on the shares. In a research note, the analyst told investors how Micron has delivered HBM revenue and gross margin that met or slightly exceeded investor expectations.
“MU delivered against the only real investor expectations we heard into the call – HBM [high bandwidth memory] revenue and gross margin, both of which were in-line to a little better than bogeys.”
The company also boasts a strong financial position as demonstrated by its robust liquidity.
With HBM becoming an important part of the DRAM business, it represents 6-7% of DRAM bits. However, they take up around 19-20% of production space as per UBS estimates, which is why Micron focuses on selling these chips to higher-value markets.
UBS believes that the supply-constraint dynamics will stay until 2026, until Micron and its peers install new manufacturing capacity. The firm thinks this will be done “carefully and strategically” in order to maintain favorable market conditions.
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.
6. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 158
Broadcom Inc. (NASDAQ:AVGO) is one of the 10 AI Stocks Investors are Watching. On June 26, UBS reiterated Nvidia and Broadcom as “Buy,” stating that both stocks are key beneficiaries of artificial intelligence demand.
In a recent note, the firm highlighted three major pillars that will boost AI demand moving forward: model training for providers such as OpenAI, Google, and Meta, consumer-facing products such as ChatGPT and AI overviews, and building and maintenance of enterprise AI products.
“We remain constructive on AI demand trends. We conclude that demand to train new models and consumer inference workload growth on the back of ChatGPT’s popularity and the continued rollout of various products from Meta, Google, and Amazon should sustain GPU demand for years to come. This should, in turn, drive demand for cloud infrastructure, hardware and other technology that gets pulled along with this compute.”
While the firm believes that the enterprise adoption pillar is most at risk due to slower adoption, a more uncertain investment return, and the specific configuration is necessary to adapt AI to individual needs. These risks are nevertheless manageable. The firm then highlighted stocks such as Nvidia and Broadcom to own in the space.
“In terms of stock calls on the back of this demand analysis, we remain bullish on NVDA and would also highlight AVGO as key Tier 1 beneficiaries of compute and networking demand, and would also highlight MU as a peripheral beneficiary of increased memory requirements. Globally, we would also highlight TSMC.”
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks Investors are Watching. On June 26, JPMorgan analyst Samik Chatterjee lowered the price target on the stock to $230.00 (from $240.00) while maintaining an “Overweight” rating. The firm has expressed its concerns regarding iPhone demand in the latter half of the year.
The investment bank anticipates a moderation in iPhone demand, considering the recent pull-forward from consumers. Consumers had purchased devices ahead of the expected tariff-led price increases and to take advantage of the smartphone subsidies in China. The firm anticipates that these shifting buying patterns and the uncertain macroeconomic environment will impact the sales of the upcoming iPhone 17 series.
It also asserted that the iPhone 18 series will lead to a stronger cycle with the anticipated launch of a foldable smartphone along with further progress on AI features that have been “long awaited and delayed relative to initial investor expectations.”
Apple is a technology company known for its consumer electronics, particularly the iPhones and MacBooks.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 227
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks Investors are Watching. On June 26, Bank of America Securities analyst Justin Post maintained a “Buy” rating on the stock with an associated price target of $200.00. Bank of America Securities recently hosted a debate attended by over 200 investors, where overall sentiment on the stock was rather mixed.
Even though Google is facing increasing competition from platforms such as OpenAI’s ChatGPT, as well as battling concerns like monetization challenges and the Department of Justice trial outcome, Post views the company’s proprietary data and deep integration as significant advantages. According to Post, these factors provide a strong foundation for monetization and defensibility as AI models become ubiquitous.
Moreover, non-search segments of the company, such as Cloud, YouTube, and Waymo, are often undervalued. However, Post suggests that they hold significant growth potential. Regulatory clarity can also help Alphabet to accelerate its AI strategies. Together, a large number of bullish investors support this buy rating for the stock.
Alphabet Inc. (NASDAQ:GOOG) 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 the 10 AI Stocks Investors are Watching. On June 26, Meta Platforms and renewable energy developer Invenergy reported having signed four deals to supply 791 megawatts (MW) more of solar and wind power to operate data centers.
The deal marks Meta’s latest move to meet the rising power demand of its data centers required for artificial intelligence technologies through clean energy.
Last year, Meta announced procuring 1,000 MW of total energy from Invenergy. Together, the projects will bring the companies’ partnership to a total of 1,800 MW.
According to Invenergy, the electricity from its solar and wind projects in Ohio, Arkansas, and Texas will be delivered to the local grid. Meanwhile, Meta will receive the clean energy credits related to the new generation capacity coming online.
“We’re laser-focused on advancing our AI ambitions—and to do that, we need clean, reliable energy. We’re grateful for Invenergy’s longtime partnership that helps us support our energy needs and implement our clean energy goals, and look forward to continued collaboration.”
-Urvi Parekh, Meta’s Head of Global Energy.
Meta Platforms, Inc. (NASDAQ:META) is a global technology company.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 AI Stocks Investors are Watching. Morgan Stanley reiterated the stock as “Overweight” and raised its price target to $530 per share from $482. The firm has updated its capex-implied AI revenue analysis and its OpenAI model, which elaborates on the contribution to Azure.
According to the firm, the yield on Microsoft’s investments in Generative AI is becoming “increasingly apparent” despite investors continuing to debate it. It is confident that there is upside to Azure forecasts and that Microsoft’s “prime position for the upcoming GenAI innovation cycle, matched with solid execution,n is driving an acceleration in the Azure business.”
“We update our capex-implied AI revenue analysis and our OpenAI model detailing the contribution to Azure. Core conclusion remains the same: conservatism in our Azure forecasts. With increased confidence in upside to Azure forecasts — our price target moves to $530 and conviction in OW remains.”
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 Investors are Watching. On June 26, Redburn reiterated the stock as “Buy” with a price target of $245. The firm said Amazon is “resilient,” backed by its Amazon Web Services offering. Analysts believe that despite underperformance, AWS’s growth will witness a rebound, which will be a major catalyst for the stock.
“Amazon shares have underperformed year-to-date, held back by weak AWS performance and tariff-related ecommerce concerns. However, our analysis indicates that AWS growth should comfortably exceed lowered expectations, enabling AWS to deliver its own Azure moment — a surprise reacceleration that resets expectations higher.”
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 Getting Wall Street’s Attention and 10 AI Stocks in the Spotlight.
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