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.
8. Core Scientific, Inc. (NASDAQ:CORZ)
Number of Hedge Fund Holders: 78
Core Scientific, Inc. (NASDAQ:CORZ) is one of the 10 AI Stocks on the Market’s Radar. On December 18, Citizens upgraded the stock from Market Perform to “Market Outperform” with a price target of $30.00. Firm analysts cite robust HPC growth upside and growth prospects for CORZ.
“We are upgrading the shares of Core Scientific to Market Outperform from Market Perform and are establishing a price target of $30 per share, which represents ~19x estimated 2027 EV/EBITDA, reflecting the company’s robust growth prospects.”
The firm believes that Core Scientific’s power pipeline is robust enough to secure additional HPC lease agreements beyond CoreWeave. This will not only allow it to capture the booming demand for HPC infrastructure while competitors struggle with power constraints, but also reinforce its position in the evolving data center landscape.
Even though CORZ faced a failed merger with cloud computing firm CoreWeave, analyst Greg Miller is of the view that Core Scientific can secure more favorable contract terms as it deepens its deal making with AI firms and other clients.
“We believe deals that have been announced subsequent to the termination of the CoreWeave deal demonstrate that value creation favors suppliers of data center capacity, with more favorable terms being disclosed with each passing contract signing.”
The firm believes Core Scientific remains “undervalued.”
Core Scientific, Inc. (NASDAQ:CORZ) has transitioned into an AI business by leveraging advanced infrastructure and expertise in HPC (high-performance computing).
7. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 104
ServiceNow, Inc. (NYSE:NOW) is one of the 10 AI Stocks on the Market’s Radar. On December 17, Bernstein SocGen reiterated an “Outperform” rating on the stock with a $1,093.00 price target. Deeming NOW as the “cheapest large-cap software stock” after selloff, the firm sees the stock’s valuation as overly discounted compared to fundamentals and peers.
“The ‘cheapest’ large cap software stock?!? This is a title we didn’t think we’d ever write for a business we labeled as ‘the next Microsoft’. Yesterday we defended the potential Armis M&A that sent the stock down ~11%. Today we are reflecting on how cheap the stock is — ServiceNow’s Price to 3-year-out FCF (minus SBC) vs. growth rate (our model) is now below the most bearish AI-narrative impacted large cap application software peers like Adobe.”
Bernstein believes that the stock is severely undervalued despite demonstrating no signs of growth issues. It now trades at a lower valuation than Adobe, who has been the most impacted by AI fears. The stock is even trading below Salesforce, which has a weaker reputation.
“On this same basis, it is even trading below the reputation maligned-Salesforce that ServiceNow bears are comparing it to. We don’t see organic growth guide downs on the horizon, like mid-2022. In 2022, the guide down occurred in the midst of a bearish macro change, but current signals for 2026 are ‘normal’ IT demand.”
Meanwhile, management continues pointing toward accelerating demand, a view also supported by recent channel checks.
“Yes, if there is an unexpected macro shock, IT will probably be impacted (risks like AI-bubble popping, politics, etc.), but ironically the cost-efficiencies desired in a down market may still support demand for ServiceNow.”
ServiceNow, Inc. (NYSE:NOW) provides a platform that integrates workflows, data, and AI to coordinate how work flows across large organizations.
6. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
Micron Technology, Inc. (NASDAQ:MU) is one of the 10 AI Stocks on the Market’s Radar. On December 18, Rosenblatt raised its price target on the stock to $500 from $300 on Thursday, maintaining a Buy rating. The firm is strongly bullish on Micron as it views memory and storage demand accelerating in the AI era.
Micron’s November quarter results and February quarter guidance was well above consensus, Rosenblatt noted. The newly negotiated DRAM and NAND Flash prices combined with continued cost declines have been key factors driving performance.
This has led the management to guide February quarter Non-GAAP GM to a record high of 68%, with demand anticipated to outstrip supply into CY27. The outlook reflects Micron’s strengthening position in memory and storage markets.
Overall, the firm sees record gross margins and tight supply leading to long-term upside.
“We are moderating the revenue growth and gross margin expansion going into CY27 considering long-term agreements will likely control ASP increases. Despite this cautious view, we estimate $36 in FY27E earnings. Using the same 14x FY27 EPS, we move our 12-month price target to $500 (from $300). We continue recommending MU for the increasing importance of memory and storage in the Age of AI.”
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.
5. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 108
GE Vernova Inc. (NYSE:GEV) is one of the 10 AI Stocks on the Market’s Radar. On December 18, Jefferies analyst Julien Dumoulin-Smith upgraded the stock to “Buy” and also raised the price target from $736 to $815. The firm sees stronger gas pricing and long-term services margin visibility for GEV, reinforcing management’s confidence in AI-driven power demand.
“We upgrade to Buy. More positive on the outlook for Power (gas pricing & services visibility) and electrification yet shares are down since the December 9th Analyst Day.”
The firm noted how GEV’s roughly 15% decline in the shares since the analyst day have largely been due to broader data center and AI-related macro concerns. However, this plunge overlooks the resilience of GEV’s contracted services business.
Jefferies noted how the pullback creates an opportunity to ‘buy the dip’ largely since long-term gas service contracts extend well into the 2030s.
Moreover, pricing for the company’s turbines continues to rise even though there are broader concerns about supply and alternative technologies.
“Gas turbine pricing continues to positively surprise and services provides visibility deeper into the 2030s, eventually offsetting gas equipment weakness. ~40% margin on new gas LTSA is unique vs peers: this is 40% of incremental EBITDA $ expansion 2025–2035.”
GE Vernova Inc. (NYSE:GEV) is a global energy company and a soaring AI stock driven by the demand for energy to power artificial intelligence technology.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 120
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 AI Stocks on the Market’s Radar. On December 17, Goldman Sachs reiterated a “Neutral” rating on the stock with a $400.00 price target. With Tesla set to face potential regulatory changes in California, analysts see minimal risk to sales and expect business to adjust without any impacts on operations.
In an investor note, the firm highlighted how the State of California has issued a document which states that Tesla may be subject to sales suspension in California for 30 days if it doesn’t change the way it is marketing its Autopilot system.
“Per a Bloomberg report and a document filed by the State of California, Tesla could be suspended from sales in California for 30 days if it does not change how it is marketing its Autopilot system, although this order is stayed for 90 days to give Tesla time to comply.”
Tesla will be able to gain compliance by either abandoning the use of the name “Autopilot” for features that aren’t L3 or higher, or enhancing the Autopilot capabilities to reach an L3 or higher threshold.
“Recall that L3 technology is when vehicles become situationally eyes-off. Our initial view is that we would not expect a disruption to Tesla’s business in California, given that the ruling gives Tesla time to comply, and given that Tesla has changed or used alternative names when marketing ADAS features in the past. Finally, Tesla posted on X that it expects sales in California to continue uninterrupted.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is one of the 10 AI Stocks on the Market’s Radar. On December 17, Morgan Stanley raised its price target on the stock to $315.00 from $305.00 while maintaining an Overweight rating. The firm remains bullish on the stock, believing that potential upside outweighs the downside.
According to the firm, the new $315 price target reflects an “unchanged 32x multiple on our new FY27 EPS of $9.83 (up from $9.55).” Earnings expectations for FY27 were raised on higher revenue from price hikes, a slightly higher iPhone shipment forecast, despite lower gross margins and an unchanged opex trajectory.
Overall, the firm remains confident in Apple’s pricing power and AI investment payoff.
“3% upward revision to FY27 EPS is a function of (1) 130bps lower gross margin due to higher memory input costs, (2) 5% higher revenue to reflect price hikes due to commodity cost inflation, and a slightly higher iPhone shipment forecast assuming 0.1- year Y/Y replacement cycle elongation, and (3) a largely unchanged opex trajectory that is elevated vs. historical seasonality given incremental investments in AI. As such, we remain Overweight-rated with a 14% risk-adjusted risk/reward and a 1.6 bull-to-bear skew.”
Apple is a technology company known for its consumer electronics, software, and services.
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 AI Stocks on the Market’s Radar. On December 19, Tigress Financial raised the firm’s price target on the stock to $350 from $280 and kept a “Strong Buy” rating.
Firm analyst calls Nvidia the “premier AI investment,” citing multi-year secular growth and significant upside optionality. The stock is on the firm’s Research Focus List and their Focus Opportunity Portfolio.
Tigress Financial is particularly bullish on NVDA due to its leadership in data center computing and accelerating AI adoption across high-growth verticals such as autonomous driving and healthcare.
The AI chipmaker’s continued run of record quarterly results underscores its leading role as the “core AI engine powering the global AI infrastructure buildout.”
“NVDA’s accelerating AI flywheel is driven by its ongoing cadence of GPU innovation, which will continue to drive accelerating Business Performance trends highlighted by multi-year secular growth, exceptional profitability, and free cash flow generation, as well as significant upside optionality as AI adoption deepens across the global economy.”
An underappreciated growth driver slowly paving its way as a long-duration AI infrastructure investment is the company’s healthcare franchise, the firm further noted.
“NVDA is well-positioned as an AI infrastructure winner in a market opportunity of several hundred billion dollars. NVDA’s strong balance sheet and cash flow fund balanced capital allocation strategy, supporting accelerating growth and shareholder value.”
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 260
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 AI Stocks on the Market’s Radar. On December 18, BofA Securities reiterated its “Buy” rating on the stock with a price target of $810.00. Despite the recent multiple compression, the firm is constructive on the stock driven by key near-term catalysts.
BoFA noted how Meta has lagged the broader market and some of its biggest peers despite analysts having raised Meta’s 2026 earnings estimates. Investors have grown cautious on the stock amid concerns about AI spending and rising operating costs.
“2025 YTD, Meta stock (up 11% y/y) has underperformed the NASDAQ (up 18%) and Alphabet (up 56%). Although Meta’s 2026 consensus EPS estimates increased 16% from the start of 2025, the 2026 P/E multiple contracted in 2H’25 as AI sentiment deteriorated and 2026 Opex concerns grew.”
Despite these concerns, the firm finds Meta’s 2026 expense guidance and LLM launch in the first half of 2026 as potential near term catalysts. Looking ahead, investors will remain focused on AI investment spend and the returns these investments may generate across core apps, advertising monetization, and new business opportunities.
The firm also mentioned in their investor note how management’s commentary regarding costs to build LLMs compared to licensing can help improve sentiment.
“Given Meta’s significant investment in LLM development (without a licensing revenue model), we think management commentary on LLM build cost vs. licensing, and the long-term benefits of an in-house LLM could be helpful for sentiment.”
Meta Platforms has been expanding its advertising capabilities and also invests heavily in artificial intelligence and the metaverse.
While we acknowledge the potential of META 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 META and that has 100x upside potential, check out our report about this cheapest AI stock.
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