10 AI Stocks Investors Are Watching Closely

US stocks edged higher on Monday, extending last week’s gains as AI-related deal making and a softer labor market boosted expectations for an interest-rate cut, according to a Reuters report.

Optimism grew that a wave of significant mergers could follow after Fifth Third Bancorp’s deal to buy Comerica in a $10.9 billion all-stock transaction, while AMD shares also surged on news of a partnership with OpenAI.

These stocks have been resilient despite the federal government shutdown entering its sixth straight day, reflecting upon the steady investor demand for tech shares and increasing focus on the upcoming earnings season.

“The current AI infrastructure buildout is structurally more durable than prior large cycles. It’s funded by strong cash flows and AI adoption can happen without costly consumer device upgrades.”

-BofA Securities senior analyst Vivek Arya.

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 Q2 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. Bloom Energy Corporation (NYSE:BE)

Number of Hedge Fund Holders: 44

Bloom Energy Corporation (NYSE:BE) is one of the 10 AI Stocks Investors Are Watching Closely. On October 2^nd, JPMorgan maintained its “Overweight” rating and more than doubled the price target to $90 per share.

The firm said its standing by BE even as its stock trades at a significant premium on data center demand for its onsite power generation systems.

According to analyst Mark Strouse, investors are struggling with a lack of visibility into Bloom’s backlog considering data center customers don’t allow the company to disclose order details.

However, the firm believes that “positive catalysts remain on the horizon.” The company should log more bookings with existing customers such as AEP and Oracle and capture new opportunities.

Strouse said that Bloom’s factory utiliziation has stood at an estimated 35% to 40% of its one gigawatt capacity over the past year. However, it has been pricing in higher utilization levels.

“In short, we believe risks remain skewed to the upside if BE can secure further order activity,” he said.

Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers.

9. Lam Research Corporation (NASDAQ:LRCX)

Number of Hedge Fund Holders: 58

Lam Research Corporation (NASDAQ:LRCX) is one of the 10 AI Stocks Investors Are Watching Closely. On September 29, Deutsche Bank upgraded the stock to “Buy” from Hold with a price target increase to $150 from $100.

The firm stated that the semis company is best positioned amid a booming semiconductor-equipment market.

In particular, the firm believes that LRCX’s exposure to memory and leading-edge logic chips positions it for growth.

“Despite the impressive move in shares YTD (+77%) and even in the last 3 months (+31%), we believe LRCX is well positioned to outperform peers over the next twelve months given these cyclical and secular tailwinds.”

Lam Research Corporation (NASDAQ:LRCX) is a semiconductor stock that offers semiconductor equipment and services used in the making of integrated circuits.