Major technology firms across the globe are spending billions of dollars on artificial intelligence, striking massive deals that continue to reshape the industry. As spending on AI accelerates and valuations continue to soar, the big question emerging is related to the AI boom and its tendency to crash.
Here is what Anneka Treon, ING global head of Private Banking, Wealth Management and Investment, has to say:
“We continue to see opportunity because ultimately, AI bubble or not, it boils down to real dollars being spent on real capex with a … very long runway of funding ahead.”
Meanwhile, Jared Bernstein, former Biden CEA chairman, told CNBC’s “Squawk Box” that surging asset prices and extreme valuations reflect how an AI bubble is the “likely outcome.”
“You’ve got to account for future earnings,” Bernstein said. “But to us and many others, that divergence between credibly, plausible, expected future earnings and this level of investment certainly looks bubbly.”
Bubble or not, many spectators believe that the spending on artificial intelligence is critical to keep the US at the lead in the AI arms race.
“I think some of the investments that we’ve seen so far is not on AI, it’s more on cloud and the power of cloud. So I don’t believe this is a bubble, but I believe this is capital that in most cases is going to be well spent.”
-BlackRock CEO Larry Fink
Fink noted how existing massive stakes will ultimately lead to some failures, but that this is capitalism.
“That is capitalism,” Fink said. “We’re going to have some big winners and we’re going to have some big losers … but if you have a diversified portfolio, you’re going to be fine.”
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Tempus AI, Inc. (NASDAQ:TEM)
Number of Hedge Fund Holders: 27
Tempus AI, Inc. (NASDAQ:TEM) is one of the 10 AI Stocks Making Waves on Wall Street. On October 20, Canaccord Genuity analyst Kyle Mikson reiterated a Buy rating on the stock with a $110.00 price target.
The firm is bullish on the stock, considering how AI deployment at scale in clinical practice is likely to drive robust long-term revenue growth for Tempus AI. The research note by the firm particularly highlighted Tempus AI’s acquisition strategy, including the Ambry deal, which it believes has the potential to accelerate growth by expanding testing capabilities and enhancing AI functionalities.
“Initiating TEM at BUY with $110 PT. TEM offers oncology testing for genomic profiling, data services and AI applications. In our opinion, the potential of AI deployment at scale in clinical practice could support strong long-term revenue growth for Tempus. TEM’s keen acquisition strategy (e.g., Ambry, etc.) could help accelerate growth by providing additional testing and enhancing its AI capabilities. Key assumptions in our DCF model for the company include a 10-year revenue CAGR of 22.8%, peak operating margin of 45.6% and a discount rate of 15.0%.”
Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology company that provides AI-enabled precision medicine solutions.
9. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 51
HP Inc. (NYSE:HPQ) is one of the 10 AI Stocks Making Waves on Wall Street. On October 22, JPMorgan downgraded the stock to “Neutral” from Overweight with a $30 price target. According to the firm, HP is undergoing a rougher backdrop as it moves past the most favorable part of the PC volume and cost cycle.
Analyst Samik Chatterjee has deemed that 2026 will mark “the tail end of the Windows 10 replacement cycle.” This will result in tough comparisons for HP’s commercial PC business.
There is also “a challenging macro environment with limited catalysts to stimulate a replacement cycle for Consumer PCs,” whereas rising memory costs will probably weigh on margins as HP struggles to pass higher input prices on to customers.
“We are downgrading shares of HP Inc. (HP) from Overweight to Neutral as we see the company cycling past the favorable part of the volume and commodity cost cycle into a relatively tougher backdrop,…” ‘
Analysts at the firm also noted how the Windows 10-led replacement cycle has been stronger in 2025 to date, including in the third quarter. This has led them to raise their revenue and earnings forecast for the fourth quarter of 2025 (Oct-end).
“But the flipside of a strong cycle in 2025 helped by a combination of Win 10 support as well as potentially pull forwards earlier in the year on tariff concerns leads to a tougher backdrop for CY26 and CY27 where volumes are expected to remain challenged as they lap the tailwinds in CY25, even as the company has to navigate a higher commodity cost environment, which could sustain if AI infrastructure demand continues to exceed supply.”
-Chatterjee and his team.
HP Inc. (NYSE:HPQ) is a technology company that specializes in personal computing and printing solutions.
8. Astera Labs, Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holders: 56
Astera Labs, Inc. (NASDAQ:ALAB) is one of the 10 AI Stocks Making Waves on Wall Street. On October 20, Barclays’ analyst Tom O’Malley downgraded the stock to Equal Weight from Overweight with an unchanged price target of $155.
Barclays hasn’t just downgraded Astera Labs, but also names such as Lumentum and Marvell Technology, citing how they look “less attractive compared to the AI involved names.”
The downgrade, particularly for ALAB stems from a lack of adoption of its UALink product, beyond Amazon’s (AMZN) Trainium 3.
The firm said it doesn’t see signs of Astera’s United Airlines adoption or momentum and that the world is now moving towards Ethernet.
Astera Labs, Inc. (NASDAQ:ALAB) is engaged in the design, manufacture, and selling of semiconductor-based connectivity solutions for cloud and AI infrastructure.
7. Atlassian Corporation (NASDAQ:TEAM)
Number of Hedge Fund Holders: 64
Atlassian Corporation (NASDAQ:TEAM) is one of the 10 AI Stocks Making Waves on Wall Street. On October 22, Canaccord Genuity reiterated its Buy rating on the stock with a price target of $230.00.
According to the firm, Atlassian is a “best-in-class asset” executing initiatives to move Data Center customers to Cloud deployments. This is likely to generate pricing increases. The company is expanding both horizontally beyond technical use cases and vertically into larger enterprise markets.
Its recent acquisitions will allow it to strengthen its platform value proposition and boost greater AI adoption and usage. New consumption-based pricing terms will help to monetize them.
Overall, the firm is bullish on the stock, considering its “favorable strategic positioning following these acquisitions and near-historically low valuation.”
Atlassian Corporation (NASDAQ:TEAM) is a global software company that designs, develops, licenses, and maintains various software products worldwide.
6. Core Scientific, Inc. (NASDAQ:CORZ)
Number of Hedge Fund Holders: 78
Core Scientific, Inc. (NASDAQ:CORZ) is one of the 10 AI Stocks Making Waves on Wall Street. On October 23, Roth analyst Darren Aftahi upgraded the stock to “Buy” from Neutral and raised his 12-month price target to $23.50 from $17. The firm said it’s upgrading the stock, assuming no deal with CoreWeave.
“With increasing activity and commentary around voting against the deal, we now assume no CORZ –CRWV deal and no renegotiation. CoreWeave called its bid ‘best/ final,’ and the fixed-ratio spread has inverted.”
In this case, Core Scientific has now reverted “to a standalone thesis to contract out its additional power pipeline to other tenant.”
“We pivot to a standalone CORZ that leases its power pipeline primarily for HPC. We are thus raising CORZ to Buy with a $23.50 PT (from $17) on a mix of discounted NPV [net present value] to its CRWV lease, ~700MW of uncontracted power and its remaining BTC power, as well as weight for recent $/watt M & A transactions.”
Core Scientific, Inc. (NASDAQ:CORZ) has transitioned into an AI business by leveraging advanced infrastructure and expertise in HPC (high-performance computing).
5. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 109
AppLovin Corporation (NASDAQ:APP) is one of the 10 AI Stocks Making Waves on Wall Street. On October 22, Deutsche Bank initiated the stock as “Buy” with a $705 price target. The firm said that the mobile tech company is firing on all cylinders and that it has built the “best-in-class” advertising technology.
Deutsche Bank analyst Benjamin Black noted that AppLovin is a dominant player within the mobile games’ user acquisition advertising space. It currently boasts an 80% market share on the supply side and more than 55% on the demand side.
According to Black, “other than select walled gardens, no other ad platform can rival its +1bn-strong DAU [Daily Active Users] reach. APP has built best-in-class ad tech that becomes more performant the larger the company’s scale.”
“APP has built best-in-class ad tech that becomes more performant the larger the company’s scale. More throughput (gross ad spend) → more signal for the model → better performance → more ad spend… and so the flywheel continues, creating a deeper and deeper moat. APP’s Axon model is vertical agnostic and performs well across the open web, and AppLovin is now expanding into eCommerce advertising, which is multiple times the size of the mobile game in-app advertising TAM. Moving further down the road, we don’t discount the possibility of the company penetrating other larger categories like financial services, media & entertainment, healthcare, and any transactional service on the web. Our analysis suggests that AppLovin likely can beat Street consensus for 2027 top line (25% CAGR growth over the 2024–2027 period) even with modest 5–10% penetration of the incremental ad spend by eCommerce companies. Traction in eCommerce should increase the diversity of ads which could drive improved ad conversions (to the benefit of take rates) and could attract incremental supply from game publishers that have been reluctant to advertise competing games on their platform.”
AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology.
4. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 124
Oracle Corporation (NYSE:ORCL) is one of the 10 AI Stocks Making Waves on Wall Street. On October 21, UBS reiterated its Buy rating on the stock with a price target of $380.00. The rating follows analyst Karl Keirstead’s attendance at Oracle’s AI World event.
As per UBS analysis, several key observations were made through customer and partner interactions at the event. Unlike previous gatherings, customers at the event articulated their intentions to grow their Oracle investments. Meanwhile, partners also reported accelerating growth rates.
The firm also highlighted how Oracle has had a significant sales reorganization, resulting in a more customer-friendly approach. Analysts also spoke with large Oracle Cloud Infrastructure (OCI) customers who were still scaling up their usage.
Despite discussions, the firm didn’t find any significant evidence of major migrations from competing cloud providers AWS, Microsoft Azure, or Google Cloud to Oracle.
The analysis has revealed high interest in migrating Oracle databases to Microsoft Azure. However, these transitions are taking longer than anticipated.
Most customers now anticipate that such migrations will begin in the second half of 2026 or in 2027.
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 156
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks Making Waves on Wall Street. On October 21, Wedbush reiterated its Outperform rating on the stock with a $310.00 price target. The rating affirmation comes ahead of the company’s upcoming earnings report due on October 30.
The firm sees pent-up demand and underestimated iPhone 17 momentum driving upside for the stock. Wedbush anticipates Apple to exceed Wall Street’s revenue estimate of approximately $102 billion, driven by robust early performance of the iPhone 17 lineup and sustained double-digit growth in its services segment.
According to sales data, the iPhone 17 series is outperforming its predecessor in both the U.S. and Chinese markets. Some of the factors behind consumer upgrades include improved design features, better displays, expanded storage options, and the new A19 chip.
“We believe the Street’s top-line estimate of ~$102 billion is very beatable given the strength of the iPhone 17 cycle out of the gates with more consumers looking to purchase the new iPhone lineup combined with the company’s double-digit services growth which is also expected to provide an incremental uplift to Street estimates. We believe Apple beats this quarter on the all-important both iPhone numbers and Services front. The iPhone 17 series is trending well ahead of iPhone 16 so far in the US and China pointing to incremental strength and pent up demand of Apple’s consumer installed base in its major markets. Sales of the base iPhone Pro Max are seeing strong demand particularly in the US market with more people now looking to upgrade their phones with the consumer iPhone upgrade cycle accelerating for an improved design, better display, expanded storage and the new A19 chip. The recently launched iPhone Air is seeing stronger than expected demand with the device selling out within minutes of launching across multiple cities in China which speaks to the popularity of AAPL’s thinner and more affordable model in one of its key markets despite seeing elevated competition in the region. We believe that the Street is still underestimating the iPhone 17 cycle that we are seeing front and center with our estimates of 315 million of 1.5 billion iPhones globally not upgrading their iPhones in the last 4 years.”
Apple is a technology company known for its consumer electronics, software, and services.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks Making Waves on Wall Street. On October 22, Citizens reiterated its Market Outperform rating on the stock with a $290.00 price target. The firm is optimistic that AI and cloud tailwinds can extend growth momentum.
In particular, the firm cited AI improvements to the company’s search functionality and Google Cloud Platform (GCP) as growth catalysts. GCP, it noted, could accelerate as additional data center capacity becomes available.
“Despite shares being up 70% in the last six months, we believe there is more room to go as AI is improving search and GCP can further accelerate as more data center capacity comes online. To that end, we expect Google to report strong 3Q25 results that are ahead of us and consensus as we reiterate our Market Outperform rating and $290 price target.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 AI Stocks Making Waves on Wall Street. On October 22, UBS maintained its “Buy” rating on the stock with a $650.00 price target. The firm has maintained its rating driven by positive momentum in the company’s Azure cloud business.
According to the analysts, investors are focused on Microsoft’s Azure unit delivering an estimated 39% revenue growth in the quarter that ended September. It also forecasts that Microsoft will guide for a modest deceleration to 37-38% growth for Azure in the second quarter ending December.
Moreover, the risk/reward profile for near-term Azure growth “skews positive,” and feedback from enterprise customers and partners has also improved.
“In our view, the investor bogey is for c/c Azure growth of 39% for 1Q/Sept, a 2-point beat, and guidance for a modest deceleration to 37–38% growth in 2Q/Dec. In our view, the risk/reward on near-term Azure growth skews positive. As we outlined in our accompanying quarterly Cloud Infra preview report, the tone from enterprise customers and partners has improved again, with large Azure partners citing accelerating growth trends.”
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
While we acknowledge the potential of MSFT 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 MSFT 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.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
