Artificial-intelligence bulls have been running the floor this past week, and it’s evident that the optimism is here to stay. However, in the case that it wears down, the market may face a significant headwind.
According to the latest Sevens report, a fading enthusiasm for AI stocks is bad news for the market, even if the economy remains stable. The note pointed to steep declines in two AI bellwethers, C3.ai and CoreWeave, who plunged after soft guidance and disappointing results respectively.
“Those moves put a question in my head… What happens to this market if AI loses momentum?”
-Sevens Report.
Even though investors are focused on economic data, tariffs, and Fed policy, the report has cautioned that “the economy could stay resilient… but AI begins to disappoint and the market drops despite macroeconomic stability.”
Five stocks, notably Nvidia, Microsoft, Meta, Broadcom, and Palantir, have accounted for 56% of the S&P 500’s 10.8% year-to-date gain, it said.
“C3.ai and CoreWeave’s declines are a reminder that the AI revolution is continuing to mature and that execution will be important going forward,” Sevens said, warning that “if AI enthusiasm begins to fade, this market will face a headwind regardless of whether the economy is stable.”
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.
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10. 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 Making Headlines This Week. On August 14, the company announced the successful integration of its Pangiam® Threat Detection solution with Smiths Detection’s HI-SCAN 6040 CTiX computed tomography screening systems.
The integrated system is now available for airports worldwide, aiming to deliver real-time detection of prohibited items in luggage, and also improve overall security operations. BigBear.ai reported that the solution has completed testing and is being trialed at multiple international airports.
Originally developed under the “Project Dartmouth” initiative, the Pangiam® Threat Detection platform is characterized by an open architecture that supports integration with several third-party scanning hardware, detection algorithms, and decision support tools.
“Our ability to interoperate with Smiths Detection equipment brings together best-in-class technologies to accelerate threat detection and streamline screening workflows. By connecting BigBear.ai’s platform with Smiths Detection’s advanced CT scanners, we’re helping airports adopt open architecture solutions that adapt quickly to emerging threats, while also improving throughput and the passenger experience.”
-Kevin McAleenan, CEO of BigBear.ai.
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.
9. Coherent Corp. (NYSE:COHR)
Number of Hedge Fund Holders: 61
Coherent Corp. (NYSE:COHR) is one of the 10 AI Stocks Making Headlines This Week. On August 14, Rosenblatt lowered the firm’s price target on the stock to $135 from $150 and kept a Buy rating on the shares. The rating affirmation follows Coherent’s fiscal Q4 report.
According to Rosenblatt, the company tends to guide conservatively. However, it does not see any fundamental impairment to the positive thesis following the earnings report.
The firm did acknowledge that competitor Lumentum has gained steam with its stronger near-term performance in laser chip, OCS, and CPO sales categories.
“We would note that Coherent management tends to guide conservatively. We do not think there is a fundamental impairment to the positive thesis. Lumentum has grabbed the momentum with stronger relative near-term performance in laser chip, OCS, and CPO sales. Nevertheless, we like the industry thesis and competitive environment, and think both LITE and COHR will do well.”
Even though Coherent is subject to this competitive pressure, Rosenblatt anticipates it to “catch up in these key AI Optical categories over the course of FY26 and into FY27.” Moreover, it believes both Lumentum and Coherent will execute well in the industry.
Coherent Corp. (NYSE:COHR) is an American manufacturer of optical materials and semiconductors.
8. Fortinet, Inc. (NASDAQ:FTNT)
Number of Hedge Fund Holders: 62
Fortinet, Inc. (NASDAQ:FTNT) is one of the 10 AI Stocks Making Headlines This Week. On August 15, Cantor Fitzgerald analyst Jonathan Ruykhaver reiterated a Neutral rating on the stock with a $87.00 price target. The rating affirmation follows Fortinet’s second-quarter results.
According to Cantor, Fortinet has reported solid 2Q25 results. However, the stock is down 25% this month while the S&P is up 3%. This is because investors are worried that its product refresh cycle is already half-way done, reflecting the possibility of weaker hardware sales.
“Fortinet delivered solid 2Q25 results, with product performance and billings growth driven by momentum in the large enterprise segment, despite slower subscription revenue growth and a lowered services guidance. However, the company’s 2026 product refresh cycle is 40–50% complete, suggesting steady upgrade demand but weaker hardware sales outside the refresh period. Fortinet continues to grow its SecOps and SASE businesses, although challenges remain around service revenue conversion and zero-trust network access complexity. The stock is down ~25% this month (versus the S&P up~3%) driven by concerns over the refresh cycle being further along than expected.”
Fortinet, Inc. (NASDAQ:FTNT), a cybersecurity company, provides enterprise-level next-generation firewalls and network security solutions, leveraging artificial intelligence across its cybersecurity products.
7. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 63
Dell Technologies Inc. (NYSE:DELL) is one of the 10 AI Stocks Making Headlines This Week. On August 13, Mizuho analyst Vijay Rakesh raised the price target on the stock to $160.00 (from $150.00) while maintaining an Outperform rating.
The firm increased estimates in the global artificial intelligence server group to reflect substantial ramps from the leading hyperscalers. The firm sees Rubin as a tailwind into the second half of 2026.
It has maintained its July quarter revenue and earnings per share estimates, while raising its fiscal 2026 estimates and fiscal 2027 projections. It also lifted its AI server revenue forecasts for fiscal years 2026 and 2027 driven by benefits from increasing AI server deployments. This includes xAI’s Colossus 2 ramp-up and anticipated capital expenditure increases from CRWV in the second half of 2025.
“No change to our JulQ rev/EPS estimates at $29.0B/$2.25 (cons. $29.2B/$2.29), while we are raising F26E from $105B/$9.40 to $106B/$9.45 (cons. $105B/$9.39), F27E from $115B/$11.00 to $116B/$11.10 (cons. $112B/$10.81), AI Server revenues for F26/27E from $16.0B/$21.5B to $16.6B/$22.0B (cons. $16.0B/$21.0B).”
Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
6. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 77
Palo Alto Networks, Inc. (NASDAQ:PANW) is one of the 10 AI Stocks Making Headlines This Week. On August 14, Rosenblatt lowered the firm’s price target on the stock to $215 from $235 and kept a Buy rating on the shares. According to the firm, channel checks reveal steady fourth-quarter performance for Palo Alto Networks.
“Recent channel checks indicate steady Q4 performance for Palo Alto Networks, with ongoing momentum across software firewalls, firewall refresh, SASE, and continued uptake of XSIAM.”
According to the firm, SASE, specifically Prisma Access, is experiencing customer expansion as organizations look to consolidate security services. The new Prisma Access Browser is gaining traction now that customers are increasingly looking to secure GenAI app usage and browser-based workflows.
“XSIAM adoption is supported by competitive conversions from legacy platforms such as QRadar. Renewal activity is contributing to larger multi-product agreements, reflecting ongoing platform integration trends. We expect revenue growth above our and the Street’s 14% estimate (FY25 guide: +14.5%), with strength flowing through to better‑than‑expected operating margins and a PF EPS beat. This view is supported by PANW’s track record of exceeding Street PF EPS by an average 5.1% over the last four quarters. Maintaining Buy rating, lowering PT to $215 (from $235) on reduced FY26 estimates. Our PT of $225 applies 13.5x EV/CY26e Sales (vs. 14.4x prior), reflecting 12.5% growth.”
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity.
5. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 82
Cisco Systems, Inc. (NASDAQ:CSCO) is one of the 10 AI Stocks Making Headlines This Week. On August 14, KeyBanc analyst Brandon Nispel reiterated an Overweight rating on the stock with a $77.00 price target. The firm cited artificial intelligence growth behind the rating affirmation.
KeyBanc noted how Cisco’s results beat expectations, with the Networking segment’s outperformance offsetting weaker results in the Security division.
It also said that it believes that investors should look past the company’s public sector weakness, focusing instead on growth opportunities in Hyperscaler/Enterprise AI, Neoclouds, and Sovereign cloud initiatives that may make up for the softness.
“Results beat expectations, with strong outperformance in Networking, partially offset by weaker Security. With guidance for FY26 being set in line with consensus at 5% y/y growth, we think there is a degree of conservatism as product order growth remains healthy at 7%. We think investors should look past Public Sector weakness, which likely hurt Security growth, given the opportunity around Hyperscaler/Enterprise AI, Neoclouds, and Sovereign could quickly offset the weakness. We continue to like CSCO for these drivers of growth, and when paired with a mix shift toward software/ subscription over time, healthy FCF growth, and shareholder returns, we believe a premium to historical valuations is warranted.”
4. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 85
Workday, Inc. (NASDAQ:WDAY) is one of the 10 AI Stocks Making Headlines This Week. On August 13, Cantor Fitzgerald initiates coverage on the stock with an Overweight rating and a price target of $265.00. The rating comes as part of a broader research note launching coverage on select Human Capital Management – HCM – names.
The firm admits that there are major concerns revolving around Workday’s slowing growth, uncertain macroeconomic conditions, and potential AI disruption to the company’s seat-based business model. However, the firm is still optimistic about the software enterprise company.
“While we understand the market’s concerns regarding WDAY’s slowing growth, uncertain macro, and potential AI disruption to WDAY’s seat-based model, we think the market has grown too pessimistic. WDAY is a high-quality asset with a strong management team, entrenched competitive position in the enterprise, expanding growth vectors, and latent margin potential. The stock is trading near its all-time low EPS and FCF multiples, which we see as an attractive entry point with a positively skewed risk/reward ratio.”
Workday, Inc. (NASDAQ:WDAY) provides enterprise cloud applications.
3. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 91
Intel Corporation (NASDAQ:INTC) is one of the 10 AI Stocks Making Headlines This Week. On August 15, Bloomberg reported that the Trump administration is engaged in talks with Intel Corp. to have the US government take a stake in the company. The news marks the latest move from the US government to blur the lines between state and industry.
Not only will the agreement boost Intel, but it will also help the chipmaker follow through on its plans to open a new US manufacturing facility in Ohio. These plans have been repeatedly delayed.
Several Wall Street analysts such as DA Davidson and Bernstein weighed in following the news. According to analyst Gil Luria, a government intervention in a struggling Intel is “essential” for the sake of national security.
“We’re all capitalists. We don’t want government to intervene and own private enterprise, but this is national security.”
-Luria, Head of technology research at D.A. Davidson, speaking at CNBC’s Squawk Box.
Luria further noted that such a deal is essential to revive Intel and reduce the country’s dependence on companies like Samsung and Taiwan Semiconductor Manufacturing Co. to manufacture chips.
On the other hand, Bernstein isn’t “hugely tempted to get involved” right now, and believes that investors would have to wait around and see if “Trump can Make Intel Great Again.”
Intel Corporation (NASDAQ:INTC) designs and sells computing hardware, semiconductor products, and AI-driven solutions for various industries.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks Making Headlines This Week. One of the most notable analyst calls on Friday, August 15, was for Apple Inc. Morgan Stanley reiterated the stock as “Overweight” stating that Apple shares appear to be “turning a corner.”
The optimism comes after stronger-than-expected iPhone sales drove an upward revision in September-quarter production plans.
“We are turning more bullish — forward iPhone unit/revenue growth expectations are still relatively muted, many of the same factors that got us bullish last July remain, we’re past peak tariff risk…”
The firm’s Greater China technology hardware team raised their September quarter iPhone build estimate to 54M units, or flat year-over-year, from previous call for 50Million. The raise has been due to better than expected iPhone sell-through in the June quarter that reduced iPhone channel inventory.
Moreover, iPhone 16, calendar 2025 second half iPhone 17 builds remain unchanged at 80M-85M units, the analysts added.
“We think the Apple story could be turning the corner,” stated the bank, pointing to cited “elongated replacement cycles,” “pent-up iPhone demand,” “structural gross margin tailwinds,” and easing tariff and regulatory headwinds.
The firm has an Overweight rating and $240 price target on the stock.
With institutions “more underweight Apple than any other megacap tech stock” and hedge funds “biased neutral to short,” Morgan Stanley said the company is “one potential AI partnership away from breaking out.”
Apple is a technology company known for its consumer electronics, software, and services.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 AI Stocks Making Headlines This Week. On August 14, two Republican U.S. senators called for a congressional investigation into Meta Platforms after an exclusive Reuters report uncovering an internal policy document that permitted the company’s chatbots to “engage a child in conversations that are romantic or sensual.”
The news has sparked widespread public outrage, raising urgent questions about how generative AI should be governed, particularly with vulnerable users.
The company has since confirmed the authenticity, stating that after receiving questions earlier this month from Reuters, it had removed portions which stated it is allowed for chatbots to flirt and engage in romantic roleplay with children.
“So, only after Meta got CAUGHT did it retract portions of its company doc. This is grounds for an immediate congressional investigation.”
-Senator Josh Hawley, a Republican from Missouri, said in a post on social media site X.
A spokesperson for Senator Marsha Blackburn, a Republican from Tennessee, said that she supports the investigation too. Meanwhile, a spokesperson for Meta noted how “the examples and notes in question were and are erroneous and inconsistent with our policies, and have been removed.”
“When it comes to protecting precious children online, Meta has failed miserably by every possible measure. Even worse, the company has turned a blind eye to the devastating consequences of how its platforms are designed.”
-Blackburn.
While we acknowledge the potential of META 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 META 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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