Based on data from S&P Global Market Intelligence, data-center dealmaking surged to a record high through November this year, with more than 100 data center transactions during the period.
This dealmaking surge has been driven by the soaring demand for computing infrastructure needed to support the growth of artificial intelligence. According to the report, the total value of these data center transactions sit just under $61 billion this year, up slightly from $60.8 billion last year.
While concerns regarding AI investment spend and high valuations persist, investor interest has been intensifying with tech giants and hyperscalers committing billions to expand data center capacity.
“High interest comes from financial sponsors, which are attracted by the risk/reward profile of such assets. Private equity firms are eager buyers but are generally reluctant sellers, creating an environment where availability for sale of high-quality data center assets is scarce.”
-Iuri Struta, TMT analyst at S&P Global Market Intelligence.
Quite many analysts also remain bullish on the sector despite concerns.
“There are two sides to the development of AI, one that would cater for optimism such as faster development of medicine and at the same time there would be concerns typically around (public) safety. Hence uncertainty remains around the monetisation of the technology and business models. Questions around the high levels of investment will only be answered in the future when the uncertainties diminish and the applications of the technology and its advantages become clearer.”
-Wim Steenbakkers, global head of datacenters and technology at ING, told CNBC.
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. Five9, Inc. (NASDAQ:FIVN)
Number of Hedge Fund Holders: 29
Five9, Inc. (NASDAQ:FIVN) is one of the 10 AI Stocks on the Market’s Radar. On December 18, Needham reiterated a “Buy” rating on the stock with a $40.00 price target. The rating affirmation follows Five9’s appointment of a new CEO, which the firm views as largely positive for scaling and AI product momentum.
On Wednesday, December 17, Five9 announced the appointment of Amit Mathradas as the company’s next CEO, succeeding long-time CEO Mike Burkland. Mathradas will assume duties as CEO effective February 2, 2026.
Five9 didn’t provide any updated financial guidance along with this announcement, citing the recency of its earnings report. However, the firm noted that it plans on hosting an investor day in 2026 that will provide details on the company’s strategy and long-term financial outlook.
Needham analyst Scott Berg views the appointment as largely positive, citing their previous experience working with Mathradas.
“We have experience working with Mr. Mathradas during his tenure with Avalara and view the appointment as positive, given Mr. Mathradas’ experience scaling enterprise software businesses & driving AI-led product innovation.”
Five9, Inc. (NASDAQ:FIVN) is a technology company that offers cloud software solutions for contact centers.
9. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 36
Rivian Automotive, Inc. (NASDAQ:RIVN) is one of the 10 AI Stocks on the Market’s Radar. On December 18, Baird upgraded the stock to “Outperform” and also raised the price target to $25 from $18. The upgrade reflects the firm’s growing optimism around product momentum and technological progress ahead of the R2 launch in 2026.
“We are upgrading RIVN to Outperform as we move into 2026 which is the year of the R2 launch.”
The firm anticipates the launch of the R2, an upcoming all-electric mid-size SUV by Rivian, to act as a “boost” for the company’s brand, product demand, and overall stock. The firm anticipates this boost as deliveries begin near mid-year.
The company intends on building the R2 at its Normal, Illinois facility, with pricing estimated near $45000. According to the firm, a lower-priced product would enable Rivian to broaden its customer base and support higher deliveries over time.
Baird also pointed to Rivian’s recent Autonomy and AI day, which it views positively for the stock.
“The recent Autonomy and AI day was highlighted by the unveiling of custom chips and a more thorough overview of RIVN’s autonomous strategy, which we view positively for long-term competitiveness. We want to own into the new product cycle of launching the R2.”
Rivian Automotive, Inc. (NASDAQ:RIVN) is an automaker that creates and manufactures electric vehicles, as well as software and services.
