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.
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. 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.
8. Block, Inc. (NYSE:XYZ)
Number of Hedge Fund Holders: 64
Block Inc. (NYSE:XYZ) is one of the 10 AI Stocks on the Market’s Radar. On November 24, Needham reiterated a Buy rating on the stock with a price target of $80.00 following their attendance at Block’s investor day in San Francisco. Firm analysts are supportive of the stock based on Block’s growth strategy, AI roadmap, and capital return plans.
Needham highlighted several key takeaways from the investor day, coming away with better clarity on Block’s growth strategy and GTM strategy. The standout insights have particularly been the company’s new products and AI initiatives.
On the Cash App side, the company announced new Neighborhoods and Moneybot products, while on the Square division side, new capabilities were revealed including Managerbot, an AI agent designed for restaurant operators.
The firm also highlighted plans for sales expansion to drive growth in upmarket segments and international market, along with a share repurchase program.
“It further announced a new $5 billion share repurchase program and intends to return 80% of non-GAAP FCF to investors. Currently trading at a reasonable ~9x EV/FY26 EBITDA, we believe the risk-reward is favorable. As such, we reiterate our BUY rating and $80 target.”
Block, Inc. (NYSE:XYZ) is a financial technology company
7. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 64
Workday, Inc. (NASDAQ:WDAY) is one of the 10 AI Stocks on the Market’s Radar. On November 26, Cantor Fitzgerald analyst Matthew VanVliet reiterated an Overweight rating on the stock with a$280.00 price target. The rating affirmation follows WDAY’S third-quarter fiscal 2026 results.
Workday’s shares slipped following its Q3 results as it failed to impress Wall Street. Despite announcing several AI agents and expanded offerings through acquisitions, many analysts ended up lowering their price targets citing a lack of upside.
“Investors were likely looking for more of a beat-and-raise quarter.”
-Cantor Fitzgerald analysts Matt VanVliet and Mason Marion.
The new number, they noted, “borders on a slight guide down,” at $280.
Overall, the company reported better-than-expected performance across key metrics, with total revenue, operating margin, and earnings per share all topping consensus estimates. Subscription revenue also beat expectations by $9 million, a 0.4% upside to analyst projections.
Meanwhile, current remaining performance obligations (cRPO) growth was 17.7%, slightly above the previous 16% when excluding the Paradox acquisition. This performance came in at the high end of the company’s 15-16% guidance range, a figure that had already incorporated an estimated 1 percentage point benefit from Tenant inclusion.
Current subscription bookings increased 19% year-over-year, or about 14% if excluding the $100M cRPO impact from Paradox. This marks a deceleration from the 16.8% growth recorded in the previous quarter due to tougher comps.
Operating margin was 28.5%, topping the consensus estimate of 28.1%. This contributed to earnings per share of $2.32 versus the expected $2.16.
Workday, Inc. (NASDAQ:WDAY) provides enterprise cloud applications.
6. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 77
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the 10 AI Stocks on the Market’s Radar. On November 24, UBS raised its price target on the stock to $110 from $105 while maintaining a “Buy” rating. The firm maintains a bullish near-term view on Marvell and sees upside coming from its optics business and Microsoft-related ASIC wins.
The firm said that it is “tweaking” estimates higher to reflect the improved optics outlook for Marvell and also adding more Microsoft-related ASIC revenue beginning in late 2026 and into 2027.
“As a result of optics attach to GPU ramp, we see slight upward bias to FQ4 (Jan) guidance that may end up as high as $2.2B (Street $2.175B). We roll forward from average CY26/27E EPS of $3.51 to CY27E EPS of $4.43 (vs prior est of $3.85) and applying 25x NTM PE, increasing PT from $105 to $110.”
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
5. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 82
ASML Holding N.V. (NASDAQ:ASML) is one of th 10 AI Stocks on the Market’s Radar. On November 26, BofA Securities maintained a Buy rating on the stock with a €986.00 price target. The rating affirmation follows the firms meeting with company CEO Christophe Fouquet and IR Marcel Kemp.
One of the firm’s key takeaways from the meeting have been how demand is currently outstripping supply in the DRAM market, with more DRAM orders anticipated in the coming quarters. 2nm logic capacity also continues to build through 2026-2027.
High-NA technology availability is also progressing, albeit some stitching related issues remain. Volume orders will likely begin in late 2026 or early 2027, with revenue recognition to follow in 2028-2029.
As for China, the firm stated that ASML anticipates a significant drop in sales in 2026 despite foundry and memory fabrication plants running at full capacity. However, it sees recovery potential in 2027.
“We met with ASML CEO Christophe Fouquet & Investor Relations lead Marcel Kemp. Our key takeaways are:
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In DRAM, demand is outstripping supply, with strong orders expected over the next few quarters for 2027 capacity additions. EUV layers are increasing with the DRAM 1c node versus the 1b node. In logic, 2-nanometer capacity additions should continue throughout 2026/2027.
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High-NA availability is progressing, though some stitching-related issues are not yet fully resolved. We expect volume orders in late 2026/early 2027 for revenue recognition in 2028/2029. Although margins are still expected to be below group level in 2030, we expect them to approach group level by 2032 as volume ramps.
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Regarding China, although major foundry and memory fabrication plants are running at full capacity, ASML expects significantly lower China sales in 2026 (we model a 14% year-over-year decline). From 2027 onward, we believe both memory and logic manufacturers could build new fabrication shells, potentially leading to a recovery in 2027.”
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
4. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 89
Applied Materials, Inc. (NASDAQ:AMAT) is one of the 10 AI Stocks on the Market’s Radar. On November 25, UBS upgraded the stock from Neutral to “Buy” and raised its price target to $285 from $250. Firm analysts see significant upside for AMAT driven by WFE growth and underappreciated China demand heading into 2026–2027.
UBS’s holds a bullish outlook for the WFE market in 2026 and 2027. Its forecasts call for 2026 WFE to increase more than 20% year-over-year to $136.5 billion, largely driven by memory.
It anticipates DRAM WFE to increase an estimated $13B yoy, topping previous estimates of $9B. UBS believes that AMAT stands out as the largest beneficiary of DRAM spending surge among the companies in UBS’s coverage universe.
“We now expect DRAM WFE to rise by ~$13B Y/Y (vs. our prior estimate of ~$9B), accounting for more than half of the anticipated ~$25B increase in total WFE. Looking ahead to 2027, we believe WFE approaches $145B, a level well above current Street expectations. Importantly, within our coverage universe, AMAT stands out as the largest beneficiary of this DRAM spending surge.”
The firm also believes that AMAT, as well as the broader industry, doesn’t yet fully appreciate the strength of China’s WFE demand in 2026. UBS considers this demand as another source of upside and a meaningful tailwind for AMAT.”
Applied Materials, Inc. (NASDAQ:AMAT) is a leader in materials engineering solutions engaged in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries.
3. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 112
Vistra Corp. (NYSE:VST) is one of the 10 AI Stocks on the Market’s Radar. On November 25, KeyBanc initiated coverage on the stock with an “Overweight” rating and a price target of $217.00. The call reflects KeyBanc’s bullish stance on US power markets, particularly Vistra, driven by its diversified portfolio of assets, strong cash flow, and policy tailwinds.
Analyst Sophie Karp believes that Vistra’s scale, diversified generation mix, and strong cash flow provide the company with “resilience and growth optionality in a tightening U.S. power market.”
With the US power market entering into a long-term growth phase pushed by AI data centers, industrial reshoring and electrification, Vistra is well-positioned to capitalize on this demand surge.
The company will benefit from the trend owing to its dispatchable generation assets and its strategic partnerships with hyperscalers such as Amazon and Microsoft. Meanwhile, a favorable policy support that prioritizes reliability and energy security further fortifies the company’s portfolio value.
Overall, Karp believes that Vistra is as well-positioned to fund growth while maintaining financial flexibility.
“We are initiating coverage on Vistra Corp. (VST) with an Overweight rating and a $217 price target. Our constructive view is based on VST’s scale, diversified generation mix, and strong cash flow, which provide resilience and growth optionality in a tightening U.S. power market. The Company is positioned to benefit from electrification and hyperscale-driven demand, with policy support adding further tailwinds. Our base case excludes upside from initiatives like battery storage or hyperscale partnerships—successful execution could unlock additional value.”
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company.
2. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 122
Oracle Corporation (NYSE:ORCL) is one of th 10 AI Stocks on the Market’s Radar. On November 26, Deutsche Bank reiterated its Buy rating on the stock with a price target of $375.00. The firm is constructive on Oracle, stating that it acknowledges risk but also believes that the market isn’t fully appreciating the company’s OpenAI exposure.
Oracle’s share prices recently experiences a setback amid concerns related to AI capacity commitments and capital expenditure plans, particularly as it is related to OpenAI. The firm has therefore conducted a deeper analysis to assess the potential valuation for Oracle.
“We utilize L/T guidance provided by mgmt. at the company’s Financial Analyst Meeting in October and our LT forecast framework (previously outlined here) to estimate Oracle’s FY30 financials excluding OpenAI related revenues and incremental capex.”
Deutche Bank forecast a $4 reduction in EPS to $17 and a $10bn reduction in FCF to $31bn relative to company guidance. The analysis implies that Oracle is getting little credit (if any) for its business with OpenAI “at the current share price of ~$200.”
The firm further acknowledged concerns regarding Oracle’s long-lived lease obligations, which it is responsible for regardless of the assumptions about its AI customers. However, it said there is “a good deal of flexibility/fungibility around these leases.”
Analysts also noted that if it were to burden Oracle’s financials with an estimated 50% of lease expenses related to foregone OpenAI business, “(assuming at min, the creditable share at a discount rate) it would imply a further reduction in EPS to ~$15 and FCF to ~$26bn.”
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
1. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 130
Alibaba Group Holding Limited (NYSE:BABA) is one of the 10 AI Stocks on the Market’s Radar. On Nov 26, Benchmark reiterated its Buy rating on the stock with a $195.00 price target. The firm is cautiously optimistic on the stock based on cloud strength and AI demand, albeit execution risks remain.
The firm highlighted how Alibaba has delivered strong cloud performance, with 34% year-over-year growth in its cloud segment. Meanwhile, Customer Management Revenue (CMR) increased 10% year-over-year, in line with expectations, while adj EBITDA was slightly below sell-side forecasts but aligned largely with buy-side views.
Firm analysts discussed company management’s emphasis on robust AI-cloud demand that continues to outpace supply. This is driven by “broad-based cloud and AI adoption across enterprises, reinforcing a multi-year sustainable cloud growth outlook, an incremental positive for us.”
Despite these positives, some model uncertainty remains because the company hasn’t provided directional cloud guidance and also highlighted some CMR slowdown.
Quick commerce losses have been sizable and while the segment is a core pillar, its nature is dynamic which implies fluctuations in quarterly profitability.
“Quick commerce losses were sizable (RMB 3B+ in F2Q), though UE losses are on track improving 50%+ q/q heading into F3Q, and while QC remains a core strategic pillar, implying continued investment, its dynamic nature means quarterly profitability will fluctuate.”
Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally.
While we acknowledge the potential of BABA 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 BABA and that has 100x upside potential, check out our report about this cheapest AI stock.
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