10 AI Stocks Investors Are Watching Closely

The United States is stepping up its efforts to prevent the illegal diversion if its advanced artificial intelligence chips to China. In latest news, sources have revealed that the country has placed location tracking devices in targeted shipments of its chips. These chips, they believe, are at high risk of illegal diversions.

The move aims to proactively detect AI chips being diverted to locations which are under US export restrictions. The sources reveal that these tracking devices apply only to select shipments under investigation.

Through the trackers, the government will be able to build cases against parties who profit from violating U.S. export controls. It is said that the trackers are typically hidden in the packaging of the server shipments. However, it is not known which parties have been involved in installing them and where they were put in along the shipping route.

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 AI Stocks Investors Are Watching Closely

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10. Pony AI Inc. (NASDAQ:PONY)

Number of Hedge Fund Holders: 13

Pony AI Inc. (NASDAQ:PONY) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, the company announced its unaudited financial results for the second quarter ended June 30, 2025. It announced producing over 200 Gen-7 robotaxi vehicles as of August 11, which positions it well on track to reach its target of 1,000 vehicles by year-end.

The company’s second-quarter revenues increased 76% year-over-year to $21.5 million, attributed largely to its robotaxi services and licensing revenues. Robotaxi services revenues grew 158% to $1.5 million, whereas fare-charging revenues increased over 300%.

PONY AI reports beginning mass production of its Gen-7 robotaxi models in June and July via partnerships with Guangzhou Automobile Group and Beijing Automotive Industry Corporation. Its fully-driverless commercial robotaxi services are operated across China’s four tier-one cities; whereas it has also expanded operations to Dubai, South Korea, and Luxembourg.

“This quarter marked a significant milestone in our journey toward large-scale production and deployment, further solidifying our leadership in the Robotaxi industry. Since mass production started two months ago, over 2001 Gen-7 Robotaxi vehicles have rolled off the production line, putting us firmly on track to hit the year-end 1,000-vehicle target. Our robust Robotaxi revenues more than doubled, with fare-charging revenues surging by over 300% year-over-year. The path toward positive unit economics is also clear, as we made substantial improvements in key cost items such as remote assistance and vehicle insurance. These achievements are underpinned by our rapid scaling and operational breakthroughs in all four tier-one cities in China, coupled with expanded presence in Dubai, South Korea and Luxembourg. As we enter the second half of this pivotal year of mass production, we are driving strongly toward positive unit economics and accelerating our multi-year growth trajectory.”

– Dr. James Peng, Chairman and Chief Executive Officer of Pony.ai.

Pony AI Inc. (NASDAQ:PONY) specializes in autonomous mobility, offering AI-driven robotruck and robotaxi services, intelligent driving software, and vehicle integration solutions.

9. BigBear.ai Holdings, Inc. (NYSE:BBAI)

Number of Hedge Fund Holders: 17

BigBear.ai Holdings, Inc. (NYSE:BBAI) ) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, H.C. Wainwright analyst Scott Buck lowered the price target on the stock to $8.00 (from $9.00) while maintaining a Buy rating. The price target cut follows BigBear.ai’s second quarter results which it posted after the markets closed on August 11th.

The firm discussed how the artificial intelligence company’s revenue of $32.5 million was significantly below its $41 million estimate. BigBear.ai also lowered its full-year revenue guidance to $125.0M to $140.0M, down from $160.0M and $180.0M. The firm considers this low guidance to be because of lower 2Q25 revenue coupled with disruptions in federal contracts, particularly in programs supporting the U.S. Army.

The firm acknowledged that these results are disappointing, but also pointed out that they shouldn’t come as a surprise.

“While disappointing, these results should not come as a surprise given what we have heard from other reporting peers in the defense space, which have also experienced program delays. We believe revenue visibility could begin to improve as the business moves towards 2026.”

The firm also considers BigBear.ai to be a beneficiary of the One Big Beautiful Bill.

“Longer term, we believe BigBear.ai is well positioned to be a beneficiary of the One Big Beautiful Bill, which substantially increases investment in areas aligned with the company’s core competencies. This includes $170.0B of incremental funding to the Department of Homeland Security. In addition, the company solidified its balance sheet during 2Q25, ending the quarter with more than $390.0M of available cash. We expect this capital to be deployed in coming quarters, through reinvestment in the business as well as complementary M&A. While we expect shares to respond negatively to 2Q25 results and change in guidance, we see an improved balance sheet and favorable industry and legislative trends as catalysts for long term growth. As a result, we suspect operating results and outlook should look materially stronger a year from now. We recommend investors take advantage of any near term weakness in BBAI shares to accumulate a position ahead of more favorable operating results. We remain Buy-rated but ave lowered our price target to $8 from $9, reflecting our lower 2026 revenue forecast.”

BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions for national security, digital identity, supply chain and logistics, enterprise operations, and manned-unmanned teaming in autonomous systems.

8. C3.ai, Inc. (NYSE:AI)

Number of Hedge Fund Holders: 24

C3.ai, Inc. (NYSE:AI) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, Enterprise AI application software company C3 AI launched the C3 AI Strategic Integrator Program. Through the program, partners can license the C3 Agentic AI Platform to build complex Enterprise AI applications up to 100 times faster than traditional methods and then license those applications to their customers.

The program allows partners to retain all intellectual property rights to product extensions, application capabilities, machine learning models, and other customizations they independently develop on C3 AI applications or with the C3 Agentic AI Platform.

They will also be provided access partner resources including the C3 AI developer community, C3 AI Academy training, agentic coding assistance, expert support, and go-to-market collaboration.

“As we expand in 2025, C3 AI is licensing its most valuable asset — the C3 Agentic AI Platform — to trusted partners through the OEM program. Participating in this program will be a force multiplier for organizations looking to lead AI-driven digital transformation of their industries. We are enabling these partners to design, develop, and bring to market derivative works in the form of Enterprise AI applications, expanding the C3 AI ecosystem and footprint. This represents a significant growth opportunity for C3 AI.”

-Thomas M. Siebel, Chairman and CEO, C3 AI.

C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company involved in building and operating enterprise-scale AI applications and accelerating digital transformation.

7. Rivian Automotive, Inc. (NASDAQ:RIVN)

Number of Hedge Fund Holders: 41

Rivian Automotive, Inc. (NASDAQ:RIVN) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, Morgan Stanley analyst Adam Jonas lowered the price target on the stock to $12.00 (from $13.00) while maintaining an Equal Weight rating.

The price target cut comes amid concerns about the upcoming R2 vehicle launch amidst challenging demand conditions for electric vehicles. Significant capital is also required to compete in autonomous robotization.

“We believe Rivian can play a role in AI-enabled autonomy, but remain cautious on the ‘steering-wheel-having’ R2 into a tough demand backdrop for EVs and capital requirements to participate in the robotization of autos. The VW relationship reduces stock volatility but potentially the opportunity.”

Rivian Automotive, Inc. (NASDAQ:RIVN) is an automaker that creates and manufactures electric vehicles, as well as software and services.

6. monday.com Ltd. (NASDAQ:MNDY)

Number of Hedge Fund Holders: 64

monday.com Ltd. (NASDAQ:MNDY) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, DA Davidson analyst Lucky Schreiner lowered the price target on the stock to $275.00 (from $325.00) while maintaining a “Buy” rating.

The price target adjustment stems from weakness in net new demand from small and medium-sized businesses (SMBs) as a result of changes to Google’s Search algorithm that affected customer acquisition.

“Monday.com reported a solid quarter with a slightly lower than typical beat driven primarily by weakness around net new demand from SMBs as a result of changes to Google’s Search algorithm. Guidance was raised less than the size of the beat though management remains optimistic about its multi-product opportunity and move upmarket. We view the reaction to results as excessive, maintain our BUY rating but lower our price target to $275.”

monday.com Ltd. (NASDAQ:MNDY) develops software applications globally, offering a cloud-based Work OS for creating work management tools.

5. Constellation Energy Corporation (NASDAQ:CEG)

Number of Hedge Fund Holders: 83

Constellation Energy Corporation (NASDAQ:CEG) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, Mizuho analyst Paul Fremont raised the price target on the stock to $335.00 (from $325.00) while maintaining a Neutral rating.

The price target raise follows Constellation’s second-quarter earnings, where it reported adjusted earnings per share of $1.91, exceeding the consensus estimate of $1.85. The company also reaffirmed its full-year guidance range of $8.90-$9.60.

Mizuho noted how Constellation has accelerated the timeline for restarting the Crane Energy Center, and that hyperscaler contracts have become a part of normal business that is helping the company repurchase shares in the market as it works on new deals.

Constellation’s next hyperscaler deal announcement also appears to be “imminent”.

“CEG executed a $400m accelerated share repurchase, buying back $2.4B so far under its current authorization. The next hyperscaler deal announcement appears imminent, as management noted significant progress has been made with a counterparty. Separately, CEG continues to see strong interest from a growing number of entities, and is in the early- to mid-innings with other opportunities. We remain Neutral-rated on CEG and raise our PT to $335 (from $325) on current multiples.”

Constellation Energy Corporation (NASDAQ:CEG) is an energy provider specializing in clean, carbon-free energy solutions.

4. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 96

Micron Technology, Inc. (NASDAQ:MU) is one of the10 AI Stocks Investors Are Watching Closely. On August 12, TD Cowen analyst Krish Sankar reiterated a Buy rating on the stock with a $150.00 price target. Sankar’s optimism for Micron stems from several factors.

The company’s recent preannouncement for the August quarter was a good starting point, driven by higher DRAM pricing, and reflecting strong revenue and earnings potential.

Micron also highlighted the possibility of selling out its HBM3E 12H supply by CY26, which would further boost its revenue potential. Moreover, process node transitions by competitors may lead to a temporary supply tightness, which is good news for Micron.

There is also increased trade activity from Chinese customers and stable demand from hyperscalers, further boosting the optimism.

“Positively, we think shares will continue to do well as part of the AI trade with possible higher re-rating of the stock (MU trades at 9-10x C26 Street EPS today). We think this will happen once investors can better frame the HBM rev. opportunity in C26, an early 2026 catalyst, in our view. Our $150 PT values MU at 12x C26 EPS.”

Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.

3. Vistra Corp. (NYSE:VST)

Number of Hedge Fund Holders: 102

Vistra Corp. (NYSE:VST) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, BMO Capital analyst James Thalacker raised the price target on the stock to $229.00 (from $191.00) while maintaining an Outperform rating. The rating affirmation follows Vistra’s Q2 adjusted EBITDA beat and raised guidance.

The management has highlighted the ongoing interest in Comanche Peak and the optimism that a deal may close.

“2Q25 EBITDA of $1,349mm was above consensus’s/our own estimates of $1,190mm (+13%)/$1,260mm. The company reaffirmed the FY25 EBITDA guidance of $5,500-6,100mm and FCFbG of $3,000-3,600mm. Management increased its 2026 Adj. EBITDA midpoint to $6,800mm+ given the uplift from the 2026/27 BRA and its hedging activity (2026 financial guidance expected with 3Q25 results). More importantly, management indicated there has been a lot of interest in Comanche Peak, and while not ready to preannounce anything, they feel good about getting a deal done. Remain Outperform. Our SOTP/MTM target price moves to $229/share.”

Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company.

2. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 104

Tesla, Inc. (NASDAQ:TSLA) is one the 10 AI Stocks Investors Are Watching Closely. On August 11, Morgan Stanley maintained the stock as Overweight and also reiterated it as its top pick.

The firm highlighted reports that Tesla is scaling back its in-house custom silicon computing ambitions. Instead, it is focusing more on partnerships with suppliers like Nvidia to enhance its inference capabilities.

Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $329 implies a 3.47% upside; however, the Street-high target of $500 implies an upside of 46.7%.

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.

1.  NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 212

NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks Investors Are Watching Closely. On August 12, Bank of America reiterated the stock as “Buy.” The firm said that it is sticking with the stock after reports of a favorable deal for Nvidia to receive chip export licenses.

“Busy period of interactions between the US Government (USG)/White House (WH) and major US chipmakers. The critical nature of semis is likely to enhance these interactions that will continue to be both positive and a headwind/source of volatility. Recent news involves: 15% potential tax/levy on sales of specific AI chips in return for China approvals: a net positive and we maintain Buys on NVDA, AMD.”

Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $190 implies a 5.10% upside; however, the Street-high target of $250 implies an upside of 38%.

NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.

While we acknowledge the potential of NVDA 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 NVDA 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 10 AI Stocks Analysts Are Tracking Closely.

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