According to John Belton, portfolio manager at Gabelli Funds, the trillion-dollar investment cycle into generative artificial intelligence is just the start. More importantly, it has started to pay off, too. With tech companies all set to invest roughly $1 trillion in capital expenditures for AI infrastructure, investors have been worried whether businesses are spending more than they may get out of it. However, Belton believes that initial investments are already yielding results.
“This is a trillion-dollar investment cycle… Adoption and usage is really only now starting to hit this very steep part of the so-called S-curve, another two and a half years after the launch of ChatGPT…The largest investors in AI infrastructure are generating the most attractive returns today.”
Belton further highlighted two reasons for his confidence in the potential of artificial intelligence. First, he stated that the cost of technology is coming down while AI capabilities are improving. Second, agentic revenue is already close to 10% next year, which is a “big, exciting” new area for growth. Now that AI is getting more accessible and cheaper, its potential is only starting to unfold.
“As AI is becoming cheaper and more capable, the vision is that it’s just going to be used in more and more corporate productivity initiatives.”
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. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 24
C3.ai, Inc. (NYSE:AI) is one of the 10 AI Stocks Making Waves on Wall Street. On June 30, Univation Technologies, a global leader in petrochemical technology licensing, and C3 AI, have entered into a strategic cooperation agreement to deliver enterprise AI solutions for advanced predictive maintenance for the petrochemical industry.
Under the agreement, Univation will license and distribute the C3 AI software that is already in use at Dow, Univation’s parent company. It will also provide technical help to support initial implementation and software enhancements for customers as needed in the future.
Univation’s new C3 AI–powered offering leverages Univation’s deep industrial knowledge with the proven success of C3 AI tools already used at Dow. The said technology is already in use across more than 50 steam cracker furnace operations within Dow’s global petrochemical facilities.
Together, the C3 Agentic AI Platform, the C3 AI Reliability application, and Univation’s deep expertise will provide an enterprise-scale AI solution that identifies equipment issues proactively, maximizes uptime, and augments operational performance for steam cracker operations.
“As the trusted leader in predictive maintenance, we’ve turned Enterprise AI into a core capability for modern industrial operations. Our work with Dow sets the standard for how industrial companies can use AI to drive efficiency, reduce costs, and optimize performance. And this collaboration with Univation will accelerate adoption of this proven, domain-specific AI application across the broader petrochemical industry and support modernization across the market by delivering real, measurable benefits of AI at scale.”
-Ed Abbo, Chief Technology Officer, C3 AI.
9. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 42
Arm Holdings plc (NASDAQ:ARM) is one of the 10 AI Stocks Making Waves on Wall Street. On June 30, Guggenheim analyst John DiFucci raised the price target on the stock from $147.00 to $187.00, maintaining a “Buy” rating. The firm cited increased visibility in Arm’s license revenue behind the rating affirmation, which is anticipated to result in royalty revenue growth over the next several years.
According to analyst DiFucci, 2025 has seen software stocks moving with broad economic sentiment instead of company fundamentals. Even though security stocks outperformed software on the whole, their underlying growth has slowed except in areas such as Identity and Data security.
The firm further stated that even though there is some positive momentum backed by retail trading and FX tailwinds, corporate IT demand is weak, which is why earnings may fall short. This is why the firm has raised the price target only modestly, based on expected higher revenue growth.
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