The US government is stepping up its moves to expand the use of artificial intelligence in the country. In the latest news, President Donald Trump joined executives from some of the largest technology and energy companies for a summit in Pittsburgh to discuss the moves.
Several tech executives and officials from top tech and energy firms attended the Energy and Innovation Summit at Carnegie Mellon University, including those from Meta, Microsoft, Alphabet, and Exxon Mobil. The leaders discussed how to position the US as a leader in artificial intelligence, which is currently in an intense AI arms race with rival China.
Trump, along with the summit’s host, U.S. Senator Dave McCormick, a Republican ally from Pennsylvania, underlined an estimated $90 billion in artificial intelligence and energy investments in the state.
“This is a really triumphant day for the people of the Commonwealth and for the United States of America, we’re doing things that nobody ever thought possible.”
-Donald Trump
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. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 57
International Business Machines Corporation (NYSE:IBM) is one of the 10 AI Stocks Investors Are Watching Closely. On July 16, Stifel analyst David Grossman reaffirmed a “Buy” rating for the stock and increased the price target from $290.00 to $310.00. Stifel’s rating reflects continued optimism for IBM’s projected financial performance and potential growth ahead of its second-quarter earnings report due on July 23.
The firm believes that IBM is a “stable/defensive compounder” with mid-single-digit revenue growth potential and annual margin expansion. This should yield mid-to-high-single-digit earnings along with free cash flow growth.
Some factors highlighted by the firm which may act as revenue tailwinds for the stock are its z17 mainframe cycle released in mid-June and IBM’s capability to leverage recent software acquisitions like Hashi and DataStax.
Nevertheless, Grossman noted that even though fundamentals for the stock are stable/positive, it may be difficult to forecast upward earnings revision in the current environment. This can be risky heading into the earnings report, which is why a post-Q2 earnings report may be a better entry point.
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.
9. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 64
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is one of the 10 AI Stocks Investors Are Watching Closely. On July 16, Crowdstrike announced an expanded collaboration with Amazon Web Services (AWS) to fast-track AI adoption in cybersecurity and secure AI use. Under the collaboration, Crowdstrike’s new tools, the falcon-mcp, which is an MCP server for the CrowdStrike Falcon® platform, and CrowdStrike AI Red Team Services, are available under the new AI Agents and Tools category of AWS Marketplace.
These tools will help AWS customers to operationalize agentic AI workflow integrations, as well as safely test and protect AI systems within their existing AWS environment. With AI adoptions accelerating, offering realistic ways to connect models to real-time security operations has become a critical need. Trusted frameworks such as those from Crowdstrike can help companies power their security operations and protect the AI systems those operations depend on.
“Agentic AI is fundamentally changing business of all sizes across every industry – but only secure AI can safely scale to deliver long-term results. With these offerings now available in AWS Marketplace, CrowdStrike is giving customers the power to safely build, test, and run AI-driven security workflows using the same cybersecurity platform trusted to protect the world’s most critical environments.”
-Daniel Bernard, chief business officer, CrowdStrike.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection.
8. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 80
ASML Holding N.V. (NASDAQ:ASML) is one of the 10 AI Stocks Investors Are Watching Closely. On July 16, Bernstein lowered the firm’s price target on the stock to $743 from $806 and kept a “Market Perform” rating on the shares.
The analysts told investors in a research note that ASML has reported pretty strong Q2 results with revenue/margin and order beats. It also reiterated its 2025 guidance with 15% growth from last year.
However, closer inspection by the firm has revealed that orders are also not as strong as they seem. In particular, there has been a EUR1.4B backlog adjustment seen due to “customers’ response to export controls.”
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 97
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the 10 AI Stocks Investors Are Watching Closely On July 15, Mizuho analyst Vijay Rakesh raised the price target on the stock to $175.00 (from $152.00) while maintaining an “Outperform” rating. The rating affirmation follows an announcement from the Trump administration that Nvidia and similar AI accelerator providers will be able to resume AI GPU shipments to China as part of trade negotiations.
According to Mizuho, the announcement means AMD will be able to resume the shipments of its MI308 chips to China. This denotes a significant opportunity as U.S. companies re-enter the Chinese market, which the firm estimates is worth an estimated $50 billion in value.
Alongside AMD, the firm also raised price targets for Nvidia and Broadcom based on the win. It said that Chinese customers are already applying for licenses to receive shipments of certain AI chips following the news.
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
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 Closely. On July 15, Mizuho analyst Vijay Rakesh raised the price target on the stock to $329.00 (from $315.00) while maintaining an “Outperform” rating. The affirmation follows the Trump administration announcing that Nvidia and other AI accelerator providers can begin shipping AI GPUs to China.
“Last night, as part of its trade negotiations with China, the Trump administration announced that NVDA, and other AI Accelerator providers, would be allowed to resume AI GPU shipments into China. Key takeaways include: 1) BIG win for NVDA, as it previously noted it expected a $8B top-line hit in JulQ from shipment restrictions, as well as additional tailwinds from an expected Blackwell project designed to meet the US’s requirements on shipments into China later this year, 2) AVGO ASIC for ByteDance potentially back on the table, driving potential for upside from current estimates, 3) AMD to resume MI308 shipments to China, and 4) NVDA seeing early benefits as key customers ByteDance and Tencent already applying for H20 shipment licenses. Raising ests/PTs for NVDA/AMD/AVGO to $192/$175/$320 with China’s return providing a tailwind as US companies re-enter a ~$50B market.
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks Investors Are Watching Closely. On July 16, Needham analyst Rajvindra Gill raised the price target on the stock to $200 from $160. The firm has a “Buy” rating on the shares. The price target hike follows assurances from the US government that export licenses will be granted for the company to resume sales of its H20 chips.
Analysts noted that the H20 chips were previously subject to export controls. Owing to the restrictions, Nvidia was unable to ship $2.5 billion worth of products to China in the first quarter of fiscal 2026. It also had to pause $8B of H20 orders set to ship in the second quarter of fiscal 2026.
Currently, the company has not specified how much revenue the H20 chips may capture over the coming quarters. However, analysts noted that they conservatively model $3B of H20 shipments per quarter. This starts in the third quarter of fiscal 2026 (October), over the next several quarters.
The analysts also pointed out that Nvidia may be developing Blackwell GPU variants for the China market (B30/B40/RTX 6000D). These are anticipated to begin shipments in the August/September timeframe.
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 Investors Are Watching Closely. On July 16, Cantor Fitzgerald analyst Deepak Mathivanan raised the price target on the stock to $196.00 (from $171.00) while maintaining a “Neutral” rating.
The firm is optimistic about Google’s competitive position in artificial intelligence but remains neutral until it has gained clarity over Antitrust challenges.
“GOOGL’s 2Q25E results should exceed street estimates on top-line and EPS, driven by core search and YT businesses. Cloud revenue growth is likely to come near mid-20% y/y driven by growing contribution from AI inference demand. We believe GOOGL could deliver EBIT margin leverage from operational efficiencies in 2Q25E despite step-up in D&A, infra opex, and compensation costs. On capex, the company appears to be making steady progress on DC build-out plans, but given the accelerated buildout across the industry, we wouldn’t be surprised if GOOGL’s FY26E point guidance of $75B trends higher on this print. Overall, street FY26E EPS estimates should see positive revisions on 2Q25E results. However, we struggle to see shares meaningfully outperform ahead of the key antitrust ruling in August. While we have grown increasingly bullish on GOOGL’s competitive position in AI over the past few months, we remain Neutral rated until we gain clarity on Antitrust challenges. In terms of estimates, we have revised our FY26E EPS estimates higher by 3% and our revised PT of $196 is based on 18x FY26E EPS (vs. $171 and 16x previously).”
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 the 10 AI Stocks Investors Are Watching Closely. On July 16, Cantor Fitzgerald raised its price target on the stock to $828.00 from $807.00, while maintaining an “Overweight” rating. The firm raised its FY26E EPS estimates by 3% and reiterated its Overweight rating / Top pick.
Earnings Preview: “We expect META to report 2Q25E results with a decent upside to consensus on revenues and EPS driven by outperformance in the core ads business as tariff-driven uncertainties moderated in May/June. The company’s 3Q25E revenue guide should indicate stable y/y growth with little deceleration (around $47.5/$48B at the high-end).
On FY outlook, META is likely to reiterate its opex guidance, but recent investments in AI talent (CFe ~$500M–$1B in incremental annual opex) move the target above the low end. Our checks with digital ad agencies and performance marketers in June/early July indicated healthy ad spend and share gains by META in 2Q, including a modest acceleration from April trends (adjusted for Easter).
Additionally, META continues to expand its advertising offerings with new capabilities for A+, a potential tailwind for 2H25E. Overall, we expect a strong quarter from META and see upside revisions to street (Visible Alpha) FY26E EPS of ~$28 per share on the 2Q print.
Investor expectations, admittedly, are elevated with shares trading at 25x FY26E EPS, near the high-end of the midterm valuation range (17–27x). That said, 3Q25E guide with little deceleration in revenue growth should be viewed favorably.
We have raised our FY26E EPS estimates by 3% and reiterate our Overweight rating / Top pick. Our revised PT of $828 is based on 28x FY26E EPS (vs. $807 previously).”
-Analyst Deepak Mathivanan
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 Closely. On July 16, Mizuho analyst Gregg Moskowitz raised the price target for the stock from $500 to $540, while maintaining an “Outperform” rating. The affirmation comes as part of a Q2 earnings preview for the software group.
According to Mizuho, Q2 checks by the firm have been good overall, characterized by “generally healthy” cybersecurity demand and “very strong” artificial intelligence adoption. However, several contacts have noted that there were a few more delays in deal completions. This may limit fundamental upside in this quarter.
Two of Mizuho’s favourite stocks to own this quarter are Microsoft and Cyberark. This is especially true ahead of the earnings release for the former.
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 Closely. On July 16, Cantor Fitzgerald analyst Deepak Mathivanan raised the price target on the stock to $260.00 (from $240.00) while maintaining an “Overweight” rating.
The firm increased its FY26E EBIT estimates by 9% and reiterated its Overweight / Top pick rating.
Earnings Preview: “Amazon is likely to report 2Q25E results with revenues near the midpoint, but EBIT should come in ahead of prior guidance. US non-store retail sales were up +7% y/y in 2Q, a slight acceleration vs. 1Q – indicating favorable trends for AMZN’s NA retail growth. Meanwhile, AWS growth should come near +17% y/y in 2Q25E. The key focus will be on 3Q25E outlook. We expect revenue guide to bracket $175B and EBIT (at high-end) near $19B.
While there are lingering uncertainties on trade, AMZN CEO recently noted that prices on the platform have remained relatively stable – which bodes well for 3Q25E EBIT guide. Additionally, we think AMZN has plenty of room to improve efficiency across various layers of its logistics network. AMZN shares have lagged the broader Mag-7 (ex-TSLA) group YTD, and sentiment appears mixed into the print. We like the risk/reward at current levels.
We have increased our FY26E EBIT estimates by 9% and reiterate our Overweight / Top pick rating. Our revised PT of $260 is based on 30x FY26E EBIT (vs. $240 previously).”
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.
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