According to Bloomberg sources, Nvidia AI chip challenger and startup Groq is all set to raise fresh funds, potentially pushing its valuation higher.
The startup is said to be in talks to raise a fresh $600 million at a near $6 billion valuation. However, the deal hasn’t been finalized yet and the terms may change.
Back in August 2024, Groq had raised $640 million at a $2.8 billion valuation in about a year. It had previously raised $1 billion. As per Bloomberg, the new round is being led by an Austin-based firm known as Disruptive.
This funding round follows Groq’s May announcement of an exclusive partnership with Bell Canada for powering its large AI infrastructure project.
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).
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10. CoreWeave, Inc. (NASDAQ:CRWV)
Number of Hedge Fund Holders: 36
CoreWeave, Inc. (NASDAQ:CRWV) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 30, Goldman Sachs reiterated the stock as “Neutral” and said that it is standing by its neutral rating ahead of earnings on Aug. 12.
“Since we launched coverage last April, CoreWeave’s financial profile has largely played out (see our initiation report for more details), quieting some of the most draconian bear cases.”
Goldman Sachs analyst Kash Rangan is both optimistic and cautious on CoreWeave. This is because while it has demonstrated impressive revenue growth, expanding its customer base and capacity, it is also not free from risks.
Some of these risks are significant customer concentration, especially after a substantial deal with OpenAI, depreciation, and high debt levels.
CoreWeave, Inc. (NASDAQ:CRWV) is a cloud platform provider that provides equipment for AI and other computing purposes.
9. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 56
Baidu, Inc. (NASDAQ:BIDU) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 30, Tiger Securities maintained Buy on the stock and cut the price target to $100.00 (from $110.00). The price target cut follows the firm’s downward revision of Baidu’s revenue and profit estimates driven by AI-driven drags from search monetization.
According to the firm, there have been challenges with monetizing AI-generated search results. These now account for an estimated 50% of total queries.
“We are maintaining our BUY rating but lowering PT to $100 (from $110) as we revise down our revenue and profit estimates to reflect the ongoing drag from AI-driven changes in search monetization. AI-generated search results now account for approximately 50% of total queries, up from 35% in April, while the monetization model remains in the testing phase. Additionally, the consolidation of YY is expected to weigh on BIDU’s advertising revenue, as YY was previously one of BIDU’s top advertising clients. As a result, we are lowering our 2025 ad revenue forecasts. Given that advertising is BIDU’s primary profit driver, we are also revising down our profit estimates. Specifically, we now expect core advertising revenue to decline 18% y/y in 2Q and 3Q, with core non-GAAP operating income down 45% and 44% y/y, respectively. On a more positive note, we are maintain our forecast of +25% year-over-year growth in 2Q cloud revenue, and we are raising our estimate for other revenue to reflect the consolidation of YY”.
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.
8. CyberArk Software Ltd. (NASDAQ:CYBR)
Number of Hedge Fund Holders: 64
CyberArk Software Ltd. (NASDAQ:CYBR) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 30, William Blair analyst Jonathan Ho downgraded the stock from Outperform to “Market Perform” following news that the company has agreed to be acquired by Palo Alto Networks.
“Palo Alto Networks’ acquisition of CyberArk significantly advances its platform strategy, in our view, by adding identity security as a core fourth pillar of the company alongside network, cloud, and security operations. CyberArk’s leadership position in PAM and identity security allows Palo Alto to instantly enter a $29 billion market with a mature and sticky platform while enhancing its AI security vision with the need to secure AI agents looming. Integrating CyberArk’s identity intelligence with Palo Alto’s XSIAM creates an end-to-end solution that protects human, machine, and AI agent identities with real-time and least privileged controls. We believe the combined company is well positioned to address the growing identity threat surface (especially as AI workloads proliferate) with a unified platform that also helps reduce vendor complexity.”
CyberArk Software Ltd. (NASDAQ:CYBR) develops, markets, and sells software-based identity security solutions and services.
7. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 77
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 30, Loop Capital reiterated the stock as “Buy” and raised the price target to $178 (from $155). The firm said it is sticking with the stock ahead of earnings on Aug. 4.
“Based on our checks, we expect PLTR to deliver another beat and raise, with revenue outperformance in line with or exceeding the 5-quarter average upside of 4.3% above the midpoint of guidance.”
Additionally, we anticipate guidance to increase beyond the past four-quarter average of 2.3%. The hard part is to guess whether that will be enough to satisfy investors who have pushed the stock straight up and to the right — rising 106% ytd and 26% since the 1Q earnings release — which is the kind of chart that gives us pause buying ahead of the print.
The company’s eye-popping valuation is supported by the combination of demonstrated AI leadership, scarcity value as one of the few pure-play AI software stocks, and category-leading margins. Market sentiment around AI names remains highly favorable, and Palantir benefits from its unique position at the intersection of artificial intelligence and enterprise software. The company continues to secure significant commercial contracts as pilot programs scale into full production, with AI use cases expanding exponentially across industries.
Additionally, Palantir’s established government footprint and strong ties with senior members of the Trump administration are expected to bolster growth in its federal business, especially as efforts to modernize U.S. government operations and implement strategic policies such as tax reform and defense initiatives advance.
Together, these factors have driven best-in-class revenue growth and margins — exemplified by a rule of 81 score in 1Q25 and a 68 score in 2024 — solidifying its position as an AI leader with significant growth potential.
Our checks and earlier meeting with management suggest Palantir’s momentum continues, and we expect the stock to move higher over the long term, if only because the firm delivers best-in-class revenue growth plus margins, and faces a decade-plus cycle similar to previous watershed shifts like the PC revolution or cloud computing.”
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems.
6. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 82
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 31, Qualcomm reported fiscal third-quarter earnings, beating Wall Street expectations. The company reported adjusted earnings per share of $2.77, surpassing the LSEG consensus estimate of $2.71. Revenue for the quarter came in at $10.37 billion, ahead of the expected $10.35 billion.
Looking ahead, the company’s revenue guidance for Q3 CY2025 is $10.7 billion at the midpoint, above analyst estimates of $10.61 billion. Adjusted EPS guidance is $2.85 at the midpoint, above analyst estimates of $2.82.
However, the reliance on high-end smartphone chip sales and the likelihood of losing Apple as a customer for its modem business in the coming years drove down the optimistic quarterly forecast for the modem chips supplier. The company has warned that when Apple goes away, it will impact its chip segment revenue.
Qualcomm reported that its chip segment revenue from non-Apple customers has climbed more than 15% so far. According to William McGonigle, analyst at Third Bridge, the chip segment sales increase, excluding Apple, “is largely driven by ASP (average selling price) uplift from flagship Android launches rather than broad-based volume recovery.”
QUALCOMM Incorporated (NASDAQ:QCOM) develops wireless technologies, supplies chips for mobile, automotive, and IoT, licenses patents, and invests in emerging tech.
5. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 90
Vertiv Holdings Co (NYSE:VRT) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 31, Barclays analyst Julian Mitchell raised its price target for the stock from $110 to $128 while maintaining an “Equal Weight” rating.
The rating affirmation follows Vertiv’s earnings report that has boosted confidence in its sales targets for 2026. The analysts also talked about how Vertiv’s operating leverage is rebounding.
In other news, Oppenheimer analyst Noah Kaye raised the price target on Vertiv to $151 from $140, while maintaining an “Outperform” rating.
Vertiv Holdings Co (NYSE:VRT) is a global provider of digital infrastructure technology and services for data centers, communication networks, and commercial and industrial facilities.
4. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 158
Broadcom Inc. (NASDAQ:AVGO) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 30, Morgan Stanley reiterated the stock as “Overweight” and raised its price target to $338 per share from $270.
According to the firm, the rising enthusiasm for AI semis is “justified by long term strength in the business.” Based on this enthusiasm, it raised targets across the board among its AI-linked semiconductors coverage.
“We think that the increase in enthusiasm for AI semis is justified by long term strength in the business, and raise targets across the board — though some near term constraints remain. PTs higher across the board, stay OW NVDA AVGO ALAB.”
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 30, Morgan Stanley reiterated the stock as “Overweight” and raised its price to $200 per share from $170.
The analyst noted robust demand for Blackwell chips, which is outpacing supply. Even though supply constraints still persist, the bottleneck will likely ease in the second half of the year. This will, in turn, likely boost earnings. NVIDIA remains Morgan Stanley’s top semiconductor pick.
“We think that the increase in enthusiasm for AI semis is justified by long term strength in the business, and raise targets across the board — though some near term constraints remain. PTs higher across the board, stay OW NVDA AVGO ALAB.”
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.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 AI Stocks Investors Should Keep an Eye On. On July 31, TD Cowen analyst Derrick Wood reiterated their bullish stance on the stock, giving a “Buy” rating today. The firm’s optimism follows Microsoft’s earnings report on July 31st, highlighting strong performance and growth potential.
The tech giant reported impressive revenue growth in the fourth quarter, beating market expectations. Azure has been a major driver behind this revenue growth, having a notable increase in growth driven by both AI and non-AI workloads.
User engagement has also been increasing positively, as evident from the rising adoption of Microsoft’s Copilot. Wood also pointed out Microsoft’s data center capacity expansion and robust capital expenditures, together which have been driving Azure’s continued growth.
Management at Microsoft has also been optimistic about maintaining demand signals, resulting in an increased capital expenditure forecast. According to Woods, the company’s strong positioning in AI monetization and cloud infrastructure will help keep growth on track, reinforcing his confidence in the company.
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 Should Keep an Eye On. On July 30, Stifel analyst Mark Kelly raised the price target on the stock to $262.00 (from $245.00) while maintaining a “Buy” rating.
“Third-party data suggests a better 2Q than expected, as the Trump administration has either struck more favorable deals, or pushed out tariff implementation while waiting for deals to be struck. The e-commerce group, in particular, has been volatile throughout these announcements/implementation delays, and we largely believe a lot of the upside to numbers is baked into most of our coverage. We were too conservative in our models following liberation day, and raise some estimates. Despite our view that a lot of the good news is priced in, we favor AMZN in e-comm, and believe LIF estimates will continue to work higher from here.”
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.
While we acknowledge the potential of AMZN 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 AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
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