Speaking on CNBC’s “Halftime Report”, CEO of Ritholtz Wealth Management and CNBC PRO contributor Josh Brown said that he believes the most important theme for the stock market right now is artificial intelligence, not tariffs.
“The most important thing to come out of this past earnings report is that AI is more important than tariffs to the stock market.”
Brown cited JPMorgan research, noting that the term “AI” was mentioned 2.6 times more often than the word “tariff” in the last round of S & P 500 earnings reports.
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He even said that those Big Tech companies that affirmed or raised guidance have been saviors, protecting the stock market from the massive turmoil in April.
“This is an AI driven tape. This is still the most important theme in the entire market. Yes, there are other themes. Yes, there are other sectors doing well, but absent AI, there’s just no chance that we would have pulled this this spring out of the hole the way that we have, and that’s because of the affirmed guidance.”
That said, a report from Silicon Valley Bank has revealed how venture capital firms focused on artificial intelligence are behind much of the growth in the startup market. Meanwhile, companies in other areas are struggling to raise cash.
“Exclude AI investment and the story changes. There is no meaningful uptick for companies not leveraging AI, with investment from this group essentially flat for the last 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 Q4 2024.
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. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 27
SAP SE (NYSE:SAP) is a leader in ERP software that leverages artificial intelligence to enhance its enterprise resource planning (ERP) solutions. On Tuesday, May 20, Wells Fargo initiated coverage on the stock, assigning an “Overweight” rating and setting a price target of EUR345.00. According to the firm, SAP “stands out as a defensive horizontal story,” with the company’s cloud migration momentum having the ability to reaccelerate growth for the company and bridge the margin gap it has relative to its mature peers. All in all, SAP holds a favorable profile in the software sector despite operating in an uncertain macroeconomic environment.
In other news, SAP has recently unveiled major AI innovations centered on its Joule AI assistant at SAP Sapphire, one of the most significant annual events in the tech world. The company has introduced an expanded library of Joule Agents, intelligent business applications, and an operating system for AI development to enhance productivity. SAP has also announced partnerships with Perplexity and Palantir to improve its business AI capabilities.
9. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 48
HP Inc. (NYSE:HPQ) is a technology company that specializes in personal computing and printing solutions. The company has recently been a part of a major announcement made at Alphabet Google’s annual I/O conference in Mountain View, California. Sundar Pichai, CEO of Google and Alphabet, showcased Google Beam, a “new AI-first video communications platform” that makes video chats feel like they are taking place in person. Google Beam has been developed in partnership with HP and will be coming to users later this year. According to Pichai, the product transforms 2-D video into realistic 3-D renderings. It has six cameras that can capture users from different angles. The technology merges the six feeds using artificial intelligence and evolves the user into a 3-D-life-like display.
“The result is a much more natural, and deeply immersive conversational experience.”
8. Confluent, Inc. (NASDAQ:CFLT)
Number of Hedge Fund Holders: 49
Confluent, Inc. (NASDAQ:CFLT) is a technology company that provides data streaming platforms. On May 20, the data streaming pioneer announced new Confluent Cloud capabilities to help process and protect data more easily. These include Snapshot Queries, new in Confluent Cloud for Apache Flink®, which integrate real-time and historic data processing to make artificial intelligence (AI) agents and analytics smarter. Confluent Cloud network (CCN) routing streamlines private networking for Apache Flink®, while IP Filtering secures data for agentic AI and analytics. The updates aim to simplify data processing, improve decision making, as well as strengthen security.
“Agentic AI is moving from hype to enterprise adoption as organizations look to gain a competitive edge and win in today’s market. But without high-quality data, even the most advanced systems can’t deliver real value. The new Confluent Cloud for Apache Flink® features make it possible to blend real-time and batch data so that enterprises can trust their agentic AI to drive real change.”
-Shaun Clowes, Chief Product Officer at Confluent.
7. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity. The company announced its fiscal third quarter 2025 financial results on May 20, 2025. The AI-powered cybersecurity vendor reported a 15% year-over-year increase in revenue, reaching $2.3 billion and just beating the analyst estimate of $2.28 billion. The GAAP diluted earnings per share (EPS) were $0.37, exceeding the estimated EPS of $0.35.
According to CFO Dipak Golechha, Palo Alto’s Q2 results were driven by the success of its platformization strategy, a strategy that involves developing a central platform that integrates multiple products and services for a smooth customer experience. Providing guidance for the fiscal fourth quarter 2025, the company anticipates revenue between $2.49 billion and $2.51 billion, as well as a diluted non-GAAP net income per share in the range of $0.87 to $0.89.
On the same day, analyst Shrenik Kothari from Robert W. Baird maintained a “Buy” rating on the stock with a $230.00 price target. The rating update follows Palo Alto’s strong financial performance in fiscal third quarter 2025, demonstrating robust demand and a strong customer base.
Palo Alto delivered a solid increase in its Next-Generation Security Annual Recurring Revenue (NGS ARR), growing 34% year-over-year. Meanwhile, it’s Remaining Performance Obligations (RPO) increased by an estimated 19% year-over-year.
The company’s product revenue also demonstrated inspiring performance, surpassing consensus expectations by about 7 percentage points. Palo Alto also raised the lower end of its fiscal year 2025 revenue guidance, implying optimism in terms of a continued growth trajectory.
While it is true that a softer service line performance has led to a minor stock price decline, the positive developments highlighted have led the firm to maintain its optimistic outlook.
6. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 94
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide. On May 20, the company showcased two groundbreaking SSDs at Computex 2025, a leading global exhibition focused on AIoT and startups happening now in Taipei, Taiwan. The latest high-performance SSDs from Micron — the Crucial T710 PCIe Gen5 NVMe SSD and the Crucial X10 Portable SSD—tend to elevate gaming and offer functional durability and storage. The Crucial T710 offers unparalleled Gen5 performance for pro-level gaming, creative applications, and data-intensive tasks like artificial intelligence. On the other hand, the Crucial X10 portable SSD provides sleek style, functional durability, and storage options up to 8TB.
“Our fastest Gen5 drive yet, the Crucial T710 SSD turbocharges gaming and creative applications. Meanwhile, our X10 portable drive is a powerhouse, effortlessly handling massive backups, games and photo libraries — no matter where life takes you or what it throws your way. These innovations from Crucial underscore our relentless effort to exceed our customers’ storage needs.”
-Dinesh Bahal, corporate vice president and general manager of Micron’s Commercial Products Group.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 96
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications. On May 20, Citi analyst Christopher Danely reiterated a “Neutral” rating on the stock with a $100.00 price target. The reiteration follows AMD’s announcement yesterday that it will divest the ZT Systems manufacturing business to Sanmina for $3 billion, following its $4.6 billion acquisition of ZT back in August.
The analyst told investors in a research note how AMD had already announced at the time of acquisition that it would acquire ZT but sell off the manufacturing piece, retaining engineers to better compete with Nvidia. Citi had expected this acquisition to be around $5 billion. As such, the ZT Systems acquisition should allow the company to better compete with Nvidia in the data center GPU market through additional system experience and faster hyperscaler deployment times. As of now, the firm’s assessment remains unchanged as it watches the company’s next steps in the developing tech landscape.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company known for its consumer electronics like iPhones and MacBooks. On May 20, a Bloomberg News report unveiled that Apple is reportedly preparing to allow third-party developers to write software using its artificial intelligence models. The goal behind the move is to boost the creation of new applications.
Per the report, the company is working on a software development kit and related frameworks. This would allow outsiders to build artificial intelligence features using its large language models that Apple uses for Apple Intelligence. The report further said that it expects to unveil the plan at its Worldwide Developers Conference on June 9.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. Bank of America reiterates Nvidia as buy. The firm said it came away feeling more bullish after the CEO’s keynote address at the Computex conference.
“NVDA’s key differentiators include its ability to: 1) expand its addressable market across multiple vectors of silicon, systems, software and services, 2) drive scale with global supply-chain partners, and 3) solid balance sheet to make strategic investments in the ecosystem.”
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $160 implies a 19% upside, however, the Street-high target of $235 implies an upside of 76%.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. The company kicked off its annual developer conference on Tuesday, May 20, unveiling a series of announcements that highlight its huge investment in artificial intelligence. The I/O conference in Mountain View, California, has just teased a $249.99-a-month subscription for its AI power users, seemingly its latest effort to battle growing competition from startups like OpenAI.
The new subscription service will offer exclusive access to the company’s most “cutting-edge” AI products. Known as the “Google AI Ultra,” this plan includes the highest usage limits and access to its latest AI models and premium features, along with early access features to experimental products and even a YouTube Premium subscription.
“It’s for the trailblazers, the pioneers, those of you who want cutting-edge AI from Google. You can think of this Ultra plan as your VIP pass for Google AI.”
-Josh Woodward, head of product incubator Google Labs and the Gemini app, said at the event.
Some other advancements showcasing AI include personalized replies in Gmail and an update to the Google Meet video conferencing software.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements. On May 20, Raymond James analyst Andrew Marok reiterated an “Outperform” rating on the stock with a $490.00 price target. The rating follows Microsoft’s Build developer conference in Seattle, where analyst Andrew Marok highlighted key conference takeaways and the AI advancements presented during the event.
Marok emphasized how the conference’s keynote speech expanded previous discussions, focusing on evolving AI agents from isolated tools to becoming elements of a more connected network. The “agentic web” concept was central to numerous announcements made at the conference. Microsoft aims to enhance the capabilities of AI agents so that they can manage more complex tasks than individual AI agents.
The firm also noted how enhancements in Microsoft’s AI services are extremely beneficial, enabling power users to achieve more while addressing earlier criticisms regarding the limited scope of AI agents. As such, Marok believes that Microsoft is well-positioned to sustain its AI momentum. The company is pushing hard to integrate AI technologies in its services, allowing it to remain at the forefront of AI innovation.
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