The S&P 500 closed at a record high on Tuesday following a wave of economic data signaling firmer growth. US stocks are on track for a third consecutive year of double-digit gains driven by AI optimism, interest rate cuts and growing economy despite fears of a recession.
The benchmark S&P 500 is now up over 18% in 2025 with a few trading days left. According to Sam Stovall, chief investment strategist at CFRA, markets need “everything firing on all cylinders” for another year of robust double-digit percentage returns.
“A lot of headwinds indicate to me that while we could end up with a surprisingly good year, I don’t think it will be another great year,” said Stovall, as reported on Reuters, who has a year-end 2026 price target of 7,400 which would be up about 7% from current levels.
Most of the lift to the broader market was provided by technology stocks, particularly Nvidia who recently told its Chinese clients that it aims to begin shipping its H200 AI chips to China before the Lunar New Year holiday.
Overall, while the AI momentum looks intact for now, expectations are becoming more measured.
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 Q3 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. Jet.AI Inc. (NASDAQ:JTAI)
Number of Hedge Fund Holders: –
Jet.AI Inc. (NASDAQ:JTAI) is one of the 10 AI Stocks on Market Radar. On December 23, the company announced a planned joint venture with Choo Choo Express LLC, a Nevada-based infrastructure development and construction firm, for the development of a planned 50-megawatt data center campus in Moapa, Clark County, Nevada.
Owing to an existing power, gas, fiber, and transmission infrastructure, Moapa campus stands as one of the few remaining sites in the Southwest that can support hyperscale inference workloads deployed closer to the network edge.
Based on the terms of the proposed venture, Jet.AI will be committing an estimated $10 million of capital over an anticipated two-year period. This is subject to the achievement of defined development and infrastructure milestones.
Meanwhile, CCE is expected to contribute the land to the joint venture. The contribution is subject to due diligence, definitive agreements, and customary conditions.
“Certain CCE personnel bring direct, hands-on experience in the design, construction, and operation of large-scale data centers for Core Scientific,” said Jet.AI Executive Chair Mike Winston. “CCE brings a related workforce of thousands of contractors, alongside deep local knowledge of the Moapa area and forty years of in state development experience. Today’s announcement builds upon Jet.AI’s earlier disclosure this year regarding its pursuit of a data-center campus in Clark County.”
Jet.AI, is a private jet charter artificial intelligence company.
9. Rezolve AI PLC (NASDAQ:RZLV)
Number of Hedge Fund Holders: 14
Rezolve AI PLC (NASDAQ:RZLV) is one of the 10 AI Stocks on Market Radar. On December 19, H.C. Wainwright reiterated its “Buy” rating on the stock with a $10.00 price target. Firm analysts are positive on the stock, believing there are major catalysts ahead for RZLV not reflected in current valuation.
“Shares of Rezolve AI Limited have declined 42.4% year to date versus a 12.5% increase in the Russell 2000 Index. In our view, this performance does not properly reflect the operating progress in the business over the past 12 months.”
Highlighting the company’s business update, the firm noted that how December revenue is anticipated to exceed $17 million. It forecast ARR to exit 2025 at more than $200 million, significantly exceeding the previous target level of $150 million announced in October. It is further anticipated that the company will exit 2026 with $500 million ARR, significantly exceeding 2025 levels.
The firm believes that this growth is driven by additional mergers and acquisitions and growth opportunities with hyperscalers including Microsoft and Google. RBRK has also indicated that it expects to generate positive adjusted EBITDA in December. According to H.C. Wainwright, this reflects potential operating leverage in the business model.
“Positive news flow from the company is not being reflected in RZLV shares, which we suspect may be for a couple of reasons. First, while the company has communicated favorable revenue performance, results have yet to be reflected in semi-annual audited financials. In addition, we believe investors are discounting acquired revenue versus organic growth. However, we believe these issues can be resolved as early as March 2026, when the company completes its annual 20-F filing. This, in our view, should serve as a material catalyst in moving RZLV shares higher in 2026. We remain Buy-rated and maintain our $10 price target on RZLV shares.”
Rezolve AI PLC provides AI-powered solutions for commerce and retail.
8. WhiteFiber, Inc. (NASDAQ:WYFI)
Number of Hedge Fund Holders: 18
WhiteFiber, Inc. (NASDAQ:WYFI) is one of the 10 AI Stocks on Market Radar. On December 19, Citizens maintained its Market Outperform rating on the stock with a $37.00 price target. Firm analysts view the recent colocation deal with Nscale a step forward in strengthening its long-term AI infrastructure positioning.
The 10 year agreement with Nscale for 40MW of critical IT load, valued at about $865 million, will be delivered in two phases in 2026. WhiteFiber has already invested $150 million in the project, the firm noted, covering a third of total construction costs and reducing financial risks.
“WhiteFiber announced a major milestone with the signing of a long-term colocation agreement with Nscale for 40MW of critical IT load at the company’s data center campus NC-1 in Madison, North Carolina. The agreement is structured as a modified gross lease with a 10-year term and an estimated total contract value of approximately $865 million, inclusive of annual escalators and installation charges. Capacity will be delivered in two phases, with the first 20 MW expected to come online April 30, 2026 and the remaining 20 MW on May 30, 2026. WhiteFiber already invested $150 million of equity into the site, roughly 35% of the total build cost by our estimates, significantly de-risking financing for the planned build out.”
According to the firm, NOI margins are estimated to approximately 90%, consistent with other recently signed HPC colocation agreements. Contract terms across the sector are improving as demand for AI capacity accelerates.
Now that a major tenant is in place, the firm sees WhiteFiber as well positioned to expand further “including additional campuses targeted for late 2026 and 2027.”
“We reiterate our Market Outperform rating and $37 price target, which implies an ~7x 2027E EV/EBITDA multiple.”
WhiteFiber, Inc. (NASDAQ:WYFI) is an AI infrastructure company that designs, develops, and operates data centers and provides artificial intelligence (AI) infrastructure solutions.
7. Ambarella, Inc. (NASDAQ:AMBA)
Number of Hedge Fund Holders: 37
Ambarella, Inc. (NASDAQ:AMBA) is one of the 10 AI Stocks on Market Radar. On December 22, edge AI semiconductor company Ambarella announced that consumer drone company Antigravity has integrated its CV5 AI system-on-chip into the Antigravity A1 drone. This drone has been deemed as the first 8K all-in-one 360-degree drone.
With drones gradually evolving from being merely “flying cameras” to intelligent robotic platforms, Ambarella has been helping drone makers deliver higher image quality, lower latency decision-making, and autonomous capabilities without the need for constant cloud connectivity.
In particular, AMBA’s CV5 chip provides 8K imaging capabilities and includes its CVflow AI accelerator for on-device processing. This integration allows it to perform real-time inference without needing constant cloud connectivity.
According to Ambarella, the CV5 chip integrates video processing with artificial intelligence capabilities designed for power-constrained devices.
“Drones are quickly transforming into intelligent edge aerial robots, capturing, processing and understanding the world in real time. Ambarella’s heritage in high-quality imaging, combined with our CVflow AI roadmap, enables drone makers to push more autonomy and more insight onto the drone itself, where every millisecond and every milliwatt matters.”
-Fermi Wang, President and CEO of Ambarella.
Ambarella, Inc. (NASDAQ:AMBA) is an American fabless semiconductor design company specializing in low-power and high-resolution video compression, image processing, and deep neural network processors.
6. Cipher Mining Inc. (NASDAQ:CIFR)
Number of Hedge Fund Holders: 40
On December 23, Compass Point reiterated a “Buy” rating on the stock with $28 price target. Firm analysts view Ulysses site as a strategic win for CIFR, aligned with HPC growth ambitions.
Cipher Mining announced on Tuesday that it has acquired a 200MW Ulysses site in Ohio, representing its first ever acquisition outside of Texas.
“Cipher Mining is busier than Santa’s helpers with this morning’s announcement of its 200MW Ulysses site in Ohio, representing the company’s first acquisition outside of Texas and a clear proof-point that management is actively sourcing beyond ERCOT.”
According to Tyler Page, CEO of Cipher, Hyperscalers have been driving unprecedented demand for large-scale sites, and Cipher is continuing to seize the opportunity by shaping the future of high-performance computing infrastructure.
The new site offers CIFR additional capacity to continue expanding its HPC hosting business. Compass Point noted how this acquisition offers CIFR entry into the PJM market, which is a key region for AI and HPC demand.
The Ulysses site includes 195 acres of land with secured capacity from AEP Ohio, having all necessary utility agreements and interconnection approvals in place. It is expected to begin operations in the fourth quarter of 2027.
“Strategically, we view PJM-located capacity as carrying a premium given the density of end-demand, and Ulysses’ 4Q27 go-live provides a more material bridge of deliverable MWs ahead of the company’s larger wave of sites expected to come online in 2028. With energization targeted in 4Q27 and RFS largely aligning, the site is positioned as a medium-term HPC-ready asset given its acreage, availability of diverse fiber paths, and proximity to a major metropolitan area, consistent with Cipher’s broader push to expand its HPC hosting footprint alongside its core bitcoin mining operations.
The firm describes the facility as “buying de-risked time-to-power inventory,” with reduced early-stage friction due to settled interconnection and utility agreements. It anticipates near-term value creation to come from hosting announcements and a clearer build plan.
“With the addition of Ulysses, Cipher noted its development pipeline now totals 3.4GW across eight sites; financial terms were not disclosed in the announcement. Based on our overall bullish view on bitcoin and the company’s execution on site development and deal signing, we maintain our Buy rating and $28 price target.”
Cipher Mining Inc. (NASDAQ:CIFR) is a technology company that develops and operates industrial scale data centers for bitcoin mining and HPC hosting.
5. Hut 8 Corp. (NASDAQ:HUT)
Number of Hedge Fund Holders: 52
WhiteFiber, Inc. (NASDAQ:WYFI) is one of the 10 AI Stocks on Market Radar. On December 19, Keefe, Bruyette & Woods analyst Stephen Glagola raised the price target on the stock to $55.00 (from $30.00) while maintaining an “Outperform” rating.
Analysts see HUT as undervalued, pointing to robust colocation deal execution which they said is performing better compared to peer Fluidstack leases. They said improving colocation pricing is a good sign for crypto miners with ready-for-service capacity over 2026-27.
Overall, HUT is well-positioned to capture incremental Google TPU deployments, with over 2GW of potential expansion across its sites and pipelines. However, the stock is undervalued owing to weak AI and Bitcoin sentiment, rather than execution or lease quality concerns.
“HUT is well positioned to capture incremental Google TPU deployments, with 1.0GW net expansion optionality at River Bend (Fluidstack ROFO) and 1.05GW across its broader pipeline with Anthropic. Our Fluidstack lease valuation of $4.49B–$7.12B (or $41.55–$65.88 per share at 5%-7% cap rates) exceeds current market cap, reflecting negative AI/BTC sentiment rather than execution or lease quality concerns, in our view. We raise our price target to $55, reflecting a 6% cap rate on the Fluidstack lease, 25% haircut to ABTC stake, and net debt. Reiterate Outperform.”
4. Rubrik, Inc. (NYSE:RBRK)
Number of Hedge Fund Holders: 52
Rubrik, Inc. (NYSE:RBRK) is one of the 10 AI Stocks on Market Radar. On December 19, Goldman Sachs reiterated its “Buy” rating on the stock with a $120 price target. Firm analysts see a compelling entry point for the stock driven by robust ARR growth and an improving FCF profile.
Discussing the recent pullback, the firm noted how pressure on the shares aligns with Lightspeed’s in-kind distribution of over 3 million shares, alongside a broader selloff in high growth security software.
“We reiterate our Buy rating and $120 Price Target on Rubrik following a ~17% pullback in the stock vs. post-F3Q earnings highs.”
The firm noted that Lightspeed entities still hold an estimated 9-10 million shares, which is less than 7% of the current public float and equivalent to roughly three days of average daily trading volume.
The stock has traded down to slightly above pre-F3Q levels even though Rubrik delivered a robust beat-and-raise quarter. This suggests the market is currently undervaluing Rubrik’s despite strong fundamentals, creating an attractive entry point.
“In our view, the market is currently discounting the company’s best-in-class mid-30s ARR growth trajectory and inflecting FCF profile, trading at ~11x EV/S (NTM) vs. high-growth security and platform peers at 13x despite comparable or lower ARR/FCF growth. We view this disconnect — where a stock with a strong fundamental print is available at a near pre-earnings price — as a compelling entry point.”
Rubrik Inc. (NYSE:RBRK) provides data security solutions to individuals and businesses worldwide.
3. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 63
Cloudflare, Inc. (NYSE:NET) is one of the 10 AI Stocks on Market Radar. On December 17, Stifel reiterated its Buy rating on the stock, with analysts viewing Cloudflare as a key beneficiary of rising AI-first security demand amid growing risks.
The firm highlighted how it is becoming increasingly important for cyber teams to secure the use of artificial intelligence within organizations to protect against unauthorized use, data loss, and AI output risks such as hallucinations.
Looking at the year ahead, the firm anticipates AI security to play an increasingly important role as GenAI and Agentic AI production deployment adoption accelerates.
“In 2026, we expect AI security such as AI visibility/monitoring, data security, model security, and overall AI/model governance to play an increasingly important role as GenAI and Agentic AI production deployment adoption accelerates.”
With organizations adopting AI-first offerings to counter threat actors, robust Identity, Data, Cloud, and Zero Trust Security are crucial; the firm noted.
While essentially all private and public cyber vendors are offering AI-based solutions for security, threat actors are operating with immense speed which is why organizations must adopt “AI-first offerings in-kind.”
“AI for Security: Essentially all public and private cyber vendors are offering AI-based security solutions to better automate prevention, detection, and response. Given the speed at which threat actors are utilizing AI to accelerate and automate the attack chain (to identify targets, determine next steps, lock-up/exfiltrate data, etc.), organizations must adopt AI-first offerings in-kind (to power real-time threat intelligence, anomaly detection, and incident response, etc.), as humans-in-the-loop are simply too slow to prevent and/or respond to attacks.
Stifel identified the following names benefiting from this trend:
“Beneficiaries under coverage: CHKP, CRWD, CYBR, NET, OKTA, PANW, ZS.”
Cloudflare, Inc. (NYSE:NET) is a cloud services provider that powers AI workloads through its Workers AI platform.
2. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 102
Snowflake Inc. (NYSE:SNOW) is one of the 10 AI Stocks on Market Radar. On December 23, Baird reiterated the stock as “Outperform” with a price target of $270. Firm analysts see the rumored $1B acquisition of privately-held Observe as strategically logical, with low integration risk.
“Yesterday evening, rumors surfaced (via an article published by The Information) that SNOW could be in talks to acquire privately-held Observe. The rumored ~$1 billion price tag would be SNOW’s biggest acquisition to-date, but we think should still be fairly digestible given the company’s current balance sheet ($4.4 billion of cash and $2.1 billion of net cash at FQ3-end) and FCF generation.”
The acquisition of Observe, an AI-native observability startup, would help SNOW boost its capabilities in full-stack observability, enabling enterprises to resolve issues faster and reduce costs.
Privately held Databricks, which is Snowflake’s top competitive threat, has been expanding its platform by being acquisitive and it only makes sense if SNOW does the same. The acquisition, if true, will allow the company to move up the stack and compete better with Databricks.
“We’d also note the technical integration should theoretically be seamless given that Observe is natively built on Snowflake. Overall, out of all the ways for SNOW to branch out up the stack and into the application layer, we think this introduces the lowest level of integration risk, while also making strategic sense (albeit entering into a competitive application monitoring market).”
Snowflake Inc. (NYSE:SNOW) is a cloud-based data storage company providing a data analysis, storage, and sharing platform.
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 120
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks on Market Radar. On December 23, UBS reiterated its Sell rating on the stock with a price target of $247.00 following lowered delivery forecasts. Analyst Joseph Spak lowered his 4Q25 delivery forecast to 415,000 units from 429,000.
The lowered delivery forecast represents a 5% reduction from the Visible Alpha consensus of 435,000 vehicles. According to the firm, the revised forecast aligns more closely with buy-side expectations, ranging between 405,000 and 415,000 deliveries for the quarter.
Tesla’s stock, UBS noted, typically responds to headline delivery beats or misses, even if results meet buy side expectations. The automaker is likely to report its fourth-quarter 2025 delivery figures on January 2.
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
While we acknowledge the potential of TSLA 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 TSLA and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT:12 Hot AI Stocks on Wall Street’s Radar and 10 Buzzing AI Stocks on Wall Street.
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