Big tech giants have been splurging on artificial intelligence over the past years and the hype isn’t dying down any time soon. Back in 2024, names such as Meta, Amazon, Alphabet and Microsoft spent a combined total of $230 billion. Meanwhile, they are on pace to pace to spend up to $320 billion combined on AI capital expenditures this year.
Tech spending, however, isn’t the only thing that is rising. Returns are rising too. According to Reuters, AI has been playing a significant role in driving demand across internet search, digital advertising and cloud computing in the April-June quarter. This has driven revenue growth at technology giants Microsoft, Meta, and Alphabet.
Giants Microsoft and Alphabet have since decided to accelerate spending to ease capacity shortages. Investors and analysts are also beginning to realize how AI is a major growth engine for these companies.
As companies like Alphabet and Meta race to deliver on the promise of AI, capital expenditures are shockingly high and will remain elevated for the foreseeable future
But if their core businesses remain strong, it will buy them more time with investors and provide confidence that the billions being spent on infrastructure, talent and other tech-related expenses will be worthwhile.
-Debra Aho Williamson, founder and chief analyst at Sonata Insights
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).
A Wall Street trader on the phone, quickly executing a technology-driven trade.
10. Pony AI Inc. (NASDAQ:PONY)
Number of Hedge Fund Holders: 13
Pony AI Inc. (NASDAQ:PONY) is one of the 10 AI Stocks Making Waves on Wall Street. On July 30, Goldman Sachs analyst Allen Chang maintained a “Buy” rating on the stock and set a price target of $26.00. The firm is optimistic about the company’s strategic advancements and growth potential in the autonomous vehicle sector.
Pony AI’s latest commercialization efforts have borne fruit, with the company having obtained a permit to provide fully driverless commercial Robotaxi services in the Shanghai Pudong New Area.
The company has already been operating in major tier-1 cities like Beijing, Shenzhen, and Guangzhou, and now that it has expanded into Shanghai, it has strengthened its market presence and revenue potential further.
The Chinese autonomous vehicle technology company is religiously devoted to technological innovation, as evident from its full time Robotaxi testing across areas such as Beijing, Shenzhen, and Guangzhou. Meanwhile, the Gen-7 Robotaxi manufactured in collaboration with major automotive manufacturers’ further promises lower hardware costs and enhanced software capabilities.
Pony AI Inc. (NASDAQ:PONY) specializes in autonomous mobility, offering AI-driven robotruck and robotaxi services, intelligent driving software, and vehicle integration solutions.
9. Celestica Inc. (NYSE:CLS)
Number of Hedge Fund Holders: 62
Celestica Inc. (NYSE:CLS) is one of the 10 AI Stocks Making Waves on Wall Street. On July 29, Stifel analyst Ruben Roy raised the price target on the stock to $230.00 (from $150.00) while maintaining a “Buy” rating.
The rating affirmation follows Celestica’s better-than-expected F2Q25 results and raised guidance for FY26. The company continues to demonstrate robust execution on the back of AI-driven demand acceleration.
“CLS reported better-than-expected F2Q25 results, guided F3Q25 above consensus, and raised FY26 guidance. As such, we are raising our forward estimates, increasing our price target to $230, and reiterating our Buy rating as CLS continues to demonstrate strong execution amid AI-driven demand acceleration. F2Q25 sales of $2.89bn increased 9% sequentially and 21% y/y, with the CCS and ATS segments exhibiting 28% and 7% y/y growth, respectively (both exceeding management’s prior expectations). Within CCS, management highlighted strong HPS networking switch demand, and expects this strength to persist as customers continue to transition towards 800G solutions in F2H25. We expect CLS’ AI-driven momentum to drive continued growth, with LT upside potential associated with early-stage 1.6T programs and digital cloud native opportunities, and reiterate our Buy rating.”
Celestica Inc., a provider of supply chain solutions, operates through two segments, Advanced Technology Solutions, and Connectivity and Cloud Solutions.
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