Stargate, a multi-billion dollar effort by OpenAI, Oracle, and SoftBank, has sharply reined in its near-term plans, reports The Wall Street Journal. According to the report, the AI infrastructure project has now set a more modest goal of setting up a data center by the end of the year, most likely in Ohio.
SoftBank and OpenAI, the two jointly leading the joint venture, have been taking time deciding the terms of the partnership, including where to build the sites. However, the companies have told Reuters they were moving “with urgency on site assessments”. Moreover, they have also been advancing projects in multiple states.
While the $500 billion Stargate initiative has struggled to get off the ground, the modest goal of setting up a small data center by the end of the year seems more achievable.
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. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 57
International Business Machines Corporation (NYSE:IBM) is one of the 10 AI Stocks on Analysts’ Radar Right Now. On July 21, BofA Securities analyst Wamsi Mohan reiterated a Buy rating and $320.00 price target on the stock.
The firm sees a “tough near-term setup given YTD outperformance but structural LT tailwinds.” They believe Red Hat (RHT) will grow faster, while foreign exchange tailwinds may also be present. However, there may be weaknesses in IBM’s consultancy business similar to peers.
“IBM reports F2Q25 earnings on July 23rd, and we believe investors expect an acceleration in RHT, potential FX tailwinds, and for Consulting to be weak (similar to peers). While the tactical setup is a bit challenging given decelerating trends in parts of the business, we reiterate our Buy rating as we continue to view IBM as a defensive investment with improving revenue growth, which in turn can drive higher cash flows that could be re-invested for more M&A. We expect IBM to largely maintain its overall guide for the year but with slightly lower Transaction processing (TP) and slightly better RHT.”
Investors likely to focus on organic growth trends:
While RHT would accelerate slightly and remains an important part of the bull case on IBM, we expect TP to modestly decelerate and overall software growth (ex-Hashicorp contribution of ~$200mn) to decelerate on an organic cc basis from 9% in 1Q to 6% in 2Q and model modest acceleration into 3Q.
While bears could argue such a deceleration would continue into the future, we view the TP deceleration as not structural and expect IBM to benefit from share gains in RHT from VMware. We expect 2Q25 reported growth of 4.7%, cc growth of 2.3%, organic cc growth of 1% and organic cc less Infrastructure (Mainframe+, Power -) contribution of 0.7%. We view growth in 2Q as not indicative of the trajectory for the rest of the year especially with TP and RHT reacceleration.”
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.
9. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 73
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the 10 AI Stocks on Analysts’ Radar Right Now. On July 18, Stifel analyst Tore Svanberg reiterated a “Buy” rating on the stock with an $80.00 price target.
“Our 12-month target price of $80 is based on a 7.6x CY26E EV/Sales multiple. Risks to our target price include (1) management’s ability to implement strategy and successfully integrate multiple acquisitions; (2) the company’s ability to gain traction/ maintain momentum in the data center, 5G infrastructure and automotive markets; (3) competition with larger, more established rivals in certain segments, and (4) general risks associated with the overall semiconductor markets, including industry cyclicality, rapid technology shifts, and the potential for disruptions from exogenous factors such as macroeconomic, geopolitical/trade, pandemic, supply chain, and other challenges.”
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
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