According to Astoria Portfolio Advisors’ John Davi, improving liquidity across the market is giving numerous stocks a “green light.” This may signal that the market is steering away from artificial intelligence stocks after an extended period of dominance.
“The Fed cut rates four times last year. They cut rates twice already. They’re going to go again whether its December [or] January. Historically whenever the Fed cuts interest rates, usually that’s a turn of a new cycle. Market leadership does tend to change quietly.”
– Davi told CNBC’s “ETF Edge”
The iShares MSCI Emerging Markets ETF, which tracks the emerging markets group, is up 17% over the past six months. Meanwhile, the Industrial Select Sector SPDR Fund is up 9% over the same period.
Putting entire investments in the Mag7 is a risky endeavor, Davi believes, while other types of stocks can be a good offset to such an expensive large cap tech position.
“I think they can be a good offset to what’s an expensive large cap tech position, which dominates most portfolios,” he added. “We’re living in a structurally higher inflation world. The Fed is cutting rates like, why do you want to take so much risk in just seven stocks?”
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.
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10. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 51
Dell Technologies Inc. (NYSE:DELL) is one of the 10 AI Stocks on the Market’s Radar. On November 26, Morgan Stanley raised its price target on the stock to $113.00 from $110.00 while maintaining an “Underweight” rating on the stock.
According to firm analysts, Dell’s strong AI server business is a standout accounting for more than 100% of the company’s fourth-quarter revenue guidance upside and the majority of EPS upside as compared to firm estimates and consensus.
AI server orders surged more than 150% during fiscal 2026 to $30B in orders so far this year. Analysts believe this momentum will continue in fiscal 2027, with AI server revenue likely to jump 50% in fiscal 2027 to total $37B.
However, the company still has to deal with with the memory supercycle, which is leading to price spikes and supply issues.
“AI servers are no longer the core of the debate on DELL – the impact of memory price inflation/supply shortages on demand and margins in FY27 (CY26) is. In our view, DELL properly contextualized how unprecedented this memory supercycle is, acknowledging its cost basis is going up for every product/that every product category will be impacted by memory inflation.”
Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
9. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 54
Baidu, Inc. (NASDAQ:BIDU) is one of the 10 AI Stocks on the Market’s Radar. On November 24, Susquehanna raised its price target on the stock to $110.00 from $95.00, while maintaining a Neutral rating. The firm sees Baidu’s AI traction as promising, but cautions that near-term financial headwinds can limit upside.
According to the firm, Baidu’s third-quarter results revealed continued weakness in their online marketing business. However, the weakness was partially offset by strength across its artificial intelligence product suite.
Baidu is also expected to witness further pressure on its top and bottom lines from AI search monetization. However, analysts believe margins may begin to improve and are particularly optimistic about the company’s fast-growing AI products.
“While the valuation remains undemanding, we believe the stock is likely to remain rangebound, leading us to maintain our Neutral rating.”
Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.
