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.
8. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 73
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the 10 AI Stocks Making Waves on Wall Street. On July 30, Morgan Stanley analyst Joseph Moore raised the price target on the stock to $80.00 (from $73.00) while maintaining an “Equal Weight” rating.
“Marvell is firmly in the AI winners camp, and sentiment has swung aggressively negative compared to a few months ago,” Moore wrote. “We are more excited for their opportunity in optical, which brings higher margin and durability vs. their ASIC opportunity, which has disappointed.”
Moore expects Marvell to benefit from strong AI demand in the coming year.
“While stock prices have moved higher, our conviction on AI spend durability in 2026 continues to grow.”
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
7. 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 Waves on Wall Street. On July 30, Reuters reported that Palo Alto Networks has agreed to buy Israeli peer CyberArk Software for an estimated $25 billion, its biggest deal yet. CEO Nikesh Arora strives to develop a comprehensive cyber security provider to capitalize on AI-driven demand.
The cash-and-stock deal is one of the largest technology deals of the year. By acquiring CyberArk, Palo Alto will be able to broaden its cybersecurity services, adding identity security tools, and enhancing its appeal to large enterprise customers.
“The rise of AI and the explosion of machine identities have made it clear that the future of security must be built on the vision that every identity requires the right level of privilege controls.”
-Arora said in a statement.
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity.
6. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 90
Vertiv Holdings Co (NYSE:VRT) is one of the 10 AI Stocks Making Waves on Wall Street. On July 31, Oppenheimer analyst Noah Kaye raised the price target on the stock to $151.00 (from $140.00) while maintaining an Outperform rating. According to the analyst, Vertiv’s record quarterly orders are an evidence to its market share gains.
This ties with the company’s efforts to help customers launch faster by expanding capacity, offering modular and prefab solutions, and aligning products with AI infrastructure needs.
“Shares were up Wednesday after VRT beat 2Q25 top-/bottom-line consensus and guided 2H above the Street while posting record quarterly orders. Results/outlook imply clear share gains in our view and connect to VRT’s efforts to enable customer speed-to-market through capacity expansion, modular/prefab solutions, and portfolio alignment with AI infrastructure requirements. Margin improvement levers (inc. supply chain/footprint rebalancing, capacity liberation) likely support return to target incrementals in FY26. Discontinuation of quarterly orders reporting (to begin in F1Q26, in our view signaling no near-term considerations at play) likely broadens stock debate and could mitigate earnings-related volatility. We raise FY25-26 estimates and increase our PT to $151 (from $140).”
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.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 97
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the 10 AI Stocks Making Waves on Wall Street. On July 30, Susquehanna analyst Christopher Rolland raised the price target on the stock to $210 from $135 and kept a “Positive” rating on the shares.
After previewing Q2 results, the analysts anticipate generally in-line to slightly better results on the back of stronger PC sales. This is because Intel acknowledged that tariff-related pull-ins continued in 2Q. The firm has also highlighted that AMD boasts server business strength. It has been gaining market share in EPYC data center CPUs.
A major factor behind the upgraded outlook on AMD is that the government announced in July that it would review and likely renew AMD’s license application for exporting MI308 AI chips to China.
Provided this occurs, it would help in reversing the previously anticipated $1.5 billion negative revenue impact from China restrictions. As of now, the firm expects AMD to recover an estimated $800 million in revenue during the second half of 2025 from the potential China sales.
It also highlighted that much of the $800 million in MI308 inventory that AMD was planning to write down may now be sold at near-zero cost.
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks Making Waves on Wall Street. On July 30, Morgan Stanley reiterated the stock as “Overweight.”
According to the firm, One Big Beautiful Bill Act (OBBBA) will offer a significant boost to free cash flow (FCF) across the IT hardware sector. It noted that Apple is one of the big beneficiaries of the Big Beautiful bill.
“We estimate the One Big Beautiful Bill Act (OBBBA) can add 12% upside to our IT Hardware coverage FCF in 2025, and 5%, on average, annually, to our coverage over the next 4 years,”
Through the bill, companies will be able to immediately deduct R&D and capital investment expenses from U.S. taxes. This will accelerate their tax savings and increase near-term cash flow.
“We estimate that over the next 4 years, the [One Big Beautiful Bill] will add a cumulative $20.3B of upside to our AAPL [free-cash flow] forecast, all else equal, which equates to an average annual FCF tailwind of 4%.”
The firm projects the legislation will generate more than $12 billion in incremental cash flow for covered names over the next year, as well as $20 billion cumulatively over four years.
“This benefit is mostly about timing, as it pulls forward future tax savings rather than changing the long-term cash flow picture,” the analysts said.
Apple is a technology company known for its consumer electronics, software, and services.
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 227
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 AI Stocks Making Waves on Wall Street. On July 30, Alphabet Google’s global affairs president said in a blog post that it will sign the European Union’s code of practice to help companies comply with the bloc’s landmark artificial intelligence rules.
The voluntary code of practice strives to offer legal certainty to signatories on how to meet requirements under the Artificial Intelligence Act (AI Act).
“We do so with the hope that this code, as applied, will promote European citizens’ and businesses’ access to secure, first-rate AI tools as they become available.”
-Kent Walker, who is also Alphabet’s chief legal officer.
“In particular, departures from EU copyright law, steps that slow approvals, or requirements that expose trade secrets could chill European model development and deployment, harming Europe’s competitiveness.”
In other news, CNBC reported how Google executives are pushing their employees to be innovative with their use of artificial intelligence as the tech giant looks for ways to cut down costs.
CEO Sundar Pichai and executive Brian Saluzzo conveyed the message at a meeting last week.
“Anytime you go through a period of extraordinary investment, you respond by adding a lot of headcount, right? But in this AI moment, I think we have to accomplish more by taking advantage of this transition to drive higher productivity.”
Alphabet announced in its earnings report last week that it plans on spending spend $85 billion on capital expenditures in 2025, up from the previous $75 billion.
“We are competing with other companies in the world. There will be companies which will become more efficient through this moment in terms of employee productivity, which is why I think it’s important to focus on that.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 AI Stocks Making Waves on Wall Street. On July 30, Meta Platforms CEO Mark Zuckerberg said that the creation of super intelligent artificial intelligence is “now in sight” and that it will usher in a “new era of personal empowerment.”
Zuckerberg stated that the approach Meta will be adopting will differ from peers. While others in the industry are directing AI to automate work, Meta will focus on developing AI for benefiting people’s personal lives.
AI keeps accelerating, and over the past few months, we’ve begun to see glimpses of AI systems improving themselves. So developing superintelligence is now in sight, but there’s this big open question about what we should direct superintelligence towards.”
-Zuckerberg
“I think that an even more meaningful impact in our lives is going to come from everyone having a personal superintelligence that helps you achieve your goals, create what you want to see in the world, be a better friend and grow to become the person that you aspire to be.”
Zuckerberg also highlighted that he believes that “personal devices like glasses” could become a huge part of superintelligence in everyday life.
“I believe deeply in building personal superintelligence for everyone. And at Meta, we have the resources to build the massive infrastructure required and the ability to deliver new technology to billions of people.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the 10 AI Stocks Making Waves on Wall Street. On July 30, Wedbush analyst Scott Devitt raised the firm’s price target on the stock to $250 from $235 and kept an “Outperform” rating on the shares. The rating affirmation comes ahead of the tech giant’s quarterly results.
Several favorable indicators are working in favor of the stock. In particular, encouraging US retail data, robust advertiser sentiment, strong AWS demand, and sustained efficiency gains are seen as tailwinds for Amazon.
The firm has raised its second-quarter operating income estimate to $17.0 billion (10.5% margin), up from $16.6 billion (10.2% margin). Meanwhile, its full-year operating income forecast is now $81.3 billion (11.7% margin), 4% above consensus.
Investor sentiment is also seen to be largely positive, and it is visible that their expectations are improving after a disappointing Q2 guide provided in early May. Nevertheless, Wedbush has also highlighted how profitability forecasts remain depressed due to tariff/macro uncertainty impacts, currency risk, mounting expenses to support AI, and an undefined cost trajectory due to Project Kuiper.
All in all, the firm is optimistic about the stock and anticipates it to deliver upside to current operating income expectations.
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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