According to Gartner, Inc., a business and technology insights company, global spending on artificial intelligence is forecast to total $2.52 trillion in 2026, a 44% increase year-over-year.
AI adoption is fundamentally shaped by the readiness of both human capital and organizational processes, not merely by financial investment,” said John-David Lovelock, Distinguished VP Analyst at Gartner. Organizations with greater experiential maturity and self-awareness are increasingly prioritizing proven outcomes over speculative potential.
Lovelock believes that artificial intelligence is in the Trough of Disillusionment throughout 2026, a phase where expectations cool and investors become more cautious.
As a result, AI solutions are most likely to be sold to enterprises by their incumbent software provider instead of being “bought as part of a new moonshot project,” he noted.
The improved predictability of ROI must occur before AI can truly be scaled up by the enterprise.
Nevertheless, industry leaders remain confident about the long-term impact of AI. Nvidia CEO Jensen Huang, for instance, believes that the AI boom will create “six-figure salaries” for those building the factories supporting it.
This is the largest infrastructure build-out in human history that’s going to create a lot of jobs,” Huang said. “It’s wonderful that the jobs are related to trade craft, and we’re going to have plumbers and electricians and construction and steel workers, and network technicians, and people who install and fit out the equipment. And so we’re talking about six-figure salaries for people who are building chip factories or computer factories or AI factories, he added.
With AI themes continuing to drive market leadership and valuation debates, let’s look at the 10 AI stocks to watch on Wall Street.
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. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 36
Wall Street believes Rivian Automotive Inc (NASDAQ: RIVN) is not for the faint of the heart. On February 13, Deutsche Bank analyst Edison Yu upgraded Rivian Automotive Inc (NASDAQ: RIVN) to Buy from Hold, raising its price target to $23 from $16.
Rivian stock is not for the faint of the heart and we certainly don’t expect a straight path forward but we see early signs that the company’s prospects are inflecting.
The firm believes that company’s 2026 outlook in the near-term looks less risky. Sales expectations are reasonable, and vehicle costs continue to improve. The upcoming R2 launch also appears to be on track for the second quarter.
Rivian’s case seems to garner further support from other competitors retreating or “slow-walking” their EV transition plans and Tesla discontinuing its higher-end models. For the long term, Deutsche Bank noted that Rivian’s efforts for a vertically integrated autonomy stack, which includes chip design, may help create a moat especially if VW deepens its support.
While the company is still spending a lot of cash, its finances are supported by another $2 billion investment and a DOE loan.
Moreover, while cash burn is still high, the balance sheet is supported by another $2bn from VW this year and the DOE loan, which provides a mid-term capital safety net for the Georgia expansion. Overall, we think the risk-reward is attractive and upgrade the stock from Hold to Buy, taking our price target up to $23 (vs. prior $16).
Rivian Automotive, Inc. (NASDAQ:RIVN) is an automaker that creates and manufactures electric vehicles, as well as software and services.
9. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 55
On February 13, Needham analyst Joshua Reilly reiterated a Buy rating on the stock with a $145.00 price target on Twilio (NYSE: TWLO). Twilio delivered stronger-than-expected fourth quarter performance, reporting organic revenue growth of 12% in the quarter compared to 10% guidance at the mid-point.
Growth was largely driven by its voice business, which grew in high teens for the year, while Voice AI revenue was up 49% year-over-year. Needham believes that the company’s momentum can carry into 2026, particularly as initial guidance calls for 8.5% organic revenue growth. With continued execution, the firm anticipates Twilio could outperform this outlook.
Twilio’s optimized Go-To-Market strategy, strong performance from ISV partners, and a product portfolio aligned with rising enterprise adoption of AI across messaging and voice further support the bullish view.
We believe these results are sustainable in 2026 as initial guidance calls for 8.5% organic revenue growth, which we expect is conservative by several hundred basis points with strong execution by the company. Twilio has an optimized GTM strategy, while ISV partners continue to outperform and the company has positioned the product portfolio for where the market is heading as customers increasingly adopt AI across messaging and voice. Finally, the company initiated a FY27 OI target of $1.23B, which would be 17% growth versus their current FY25 guidance.
Twilio Inc. (NYSE:TWLO) is a leading cloud communications platform-as-a-service (CPaaS) company.
