According to Barclays, the U.S. is in the middle of its biggest capex cycle in many decades. This cycle, they noted, has been fueling stock market performance over the past three years.
Artificial intelligence stocks have contributed between 75% and 80% of the S&P 500′s earnings and total performance, with the rally anticipated to continue the year ahead. Easing financial conditions and a more favorable regulatory environment in 2026, noted the firm, will also likely push equity valuations higher.
“When thinking about the critical drivers of risk assets and the economy at large heading into 2026, AI stands head and shoulders above the rest. With AI capex numbers projected to be in the trillions, it’s hard to discount the impact it has already had and the impact it is going to have in the future for companies and investors around the globe,” analyst Andrew Ferremi wrote in a Thursday note to clients.
Ferremi acknowledged that “with the strong wealth gains helped by AI, it leaves the US in particular vulnerable if the AI narrative runs out of steam.”
Overall, the firm believes that AI will remain the dominant force shaping market performance next year.
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. NICE Ltd. (NASDAQ:NICE)
Number of Hedge Fund Holdings: 22
NICE Ltd. (NASDAQ:NICE) is one of the 10 AI Stocks Investors Are Watching. On December 23, Piper Sandler reiterated its Neutral rating on the stock with a $122.00 price target. Firm analysts remain cautious on Cloud ramp feasibility amid pressure on mid-term outlook.
In an investor note, analysts at the firm questioned how NICE can achieve its aggressive Cloud targets for 2028 without major drivers such as new customers, and mergers and acquisitions.
“Is the Cloud ’28 Target Aggressive? Following NICE’s recent analyst day, many have wondered how NICE can achieve the Cloud targets. We took the time to back into what’s implied across the three drivers of new-only, expansion, and M&A. Given this company’s history, we expect a combination of the drivers would be required, including further M&A like the acquisition of Cognigy earlier this year.”
The recent acquisition of Cognigy does give NICE a foothold in conversational AI, the firm noted. However, private competitors such as Sierra.AI and Decagon have stronger momentum. This is why investors remain cautious for now.
“All of these scenarios also embed that the expansion rate comes in better than PSC and current levels, which should be interpreted to being ‘aggressive’. NICE has many options to create shareholder value (see ‘Play is Under Review’), including divesting / selling the FCC business, and we expect the stock to remain pressured given the view around the mid-term targets.”
NICE Ltd. is a technology company that provides AI-powered cloud platforms.
9. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 66
Accenture plc (NYSE:ACN) is one of the 10 AI Stocks Investors Are Watching. On December 22. Mizuho reiterated an “Outperform” rating on the stock with a $309.00 price target. The rating affirmation follows the company’s fiscal first-quarter 2026 results.
The company beat Wall Street expectations for revenue, supported by robust demand for its artificial intelligence-driven IT services.
Besides robust quarterly revenue, the company maintained its fiscal year 2026 revenue guidance of 2% to 5% growth in constant currency. This includes an estimated 150 basis points from mergers and acquisitions and a roughly 100 basis point headwind from Accenture Federal Services.
According to the firm, the robust quarter and slightly reduced Accenture Federal Services headwind may have had investors anticipating an upward revision to guidance. However, the maintained outlook is most likely a reflection of management conservatism instead of weakening business conditions.
The firm also highlighted ACN’s second consecutive quarter of robust bookings acceleration, a factor investors were concerned about for fiscal 2026. Overall, with the company investing in the accelerating generative AI services market, Mizuho anticipates Accenture to capture an increasing market share.
Accenture plc (NYSE:ACN) offers strategy and consulting services.
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