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.
8. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 66
On February 12, leading privacy and security-focused VPN service NordVPN announced that it has selected CrowdStrike (NASDAQ: CRWD) to power its Threat Protection Pro feature. This will allow the company to integrate enterprise-grade business intelligence into consumer security.
The collaboration will enable CrowdStrike Threat Intelligence to enhance NordVPN’s ability to protect users against modern cyber threats while maintaining a privacy-first user experience.
CrowdStrike Threat Intelligence, the company’s AI-powered, expert-driven service, offers deep visibility into adversary behavior and emerging threats. Integrating this intelligence with NordVPN’s Threat Protection Pro allows users to benefit from stronger protection against malicious websites, phishing attempts, malware, and trackers.
Cybersecurity isn’t a malware problem – it’s an adversary problem,” said Daniel Bernard, chief business officer at CrowdStrike. “CrowdStrike pioneered the adversarial approach to security and continues to deliver the gold standard in threat intelligence. When a category-defining brand like NordVPN selects CrowdStrike, it reinforces a simple truth: the best trust the best. We’re bringing the same adversary insights that protect enterprises and governments to millions of consumers and raising the bar for what consumer security should deliver.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a leader in AI-driven endpoint and cloud workload protection.
7. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 82
Wall Street believes Intel (NASDAQ: INTC) is facing a “show-me” reset, with one research firm warning that current valuation is a reflection of overly optimistic assumptions. On February 12, DA Davidson analyst Gil Luria initiated coverage on Intel (NASDAQ: INTC) with a Neutral rating and a price target of $45.
Intel’s transformation seems to be one of the most challenging turnarounds in the semiconductor industry. Not only is the company working toward restoring its leading-edge manufacturing leadership, but also building credibility as a third-party foundry.
The research firm did acknowledge that there are “real developments across the business for investors to get excited about” at Intel. However, it remains a show-me story for now with execution remaining the key hurdle. Investors still need Intel to prove itself, particularly as the company hasn’t been profitable over the past twelve months.
Analysts, however, are optimistic that this year Intel will manage to return to profitability. As such, the current stock price “continues to reflect assumptions we view are all too optimistic,” leading to its Neutral rating.
Intel Corporation (NASDAQ:INTC) designs, manufactures, and sells advanced semiconductors, computer products, and technologies, delivering data storage, computer, networking, and communications platforms.
6. Palo Alto Networks Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 85
Despite valuation pressures weighing in on software stocks, Palo Alto is gaining renewed analyst attention from Wall Street. On February 12, BTIG analyst Gray Powell lowered the price target on Palo Alto Networks (NASDAQ: PANW) to $200.00 (from $248.00) while maintaining a “Buy” rating.
The firm spoke with eleven contacts on broader cyber security trends, picking up multiple data points for PANW. Its particular focus was on insights from five large channel partners with a combined view on $1.3 billion in annual Palo Alto Networks sales.
BTIG noted that the tone of its checks reveal slight improvements from the last quarter. It also cited improved activity with Palo Alto Networks partners in both December and January, with insights regarding Prisma SASE, software firewalls, XSIAM and Prisma AIRS products standing out positively.
The firm further noted increasing confidence in PANW’s ability to exceed Street estimates in its fiscal second quarter of 2026.
And we left our work with a higher degree of confidence in PANW’s ability to edge out Street estimates in FQ2’26 and hit the high end of NGA ARR targets for FY26 (excluding M&A). We reduced our PT to $200/share from $248 previously due to multiple compression across software but reiterate our Buy rating.
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity.
5. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 89
Applied Materials (NASDAQ: AMAT) is gaining renewed interest from Wall Street as analysts view the stock as well-positioned toward growth whether the market is market-driven or share-driven. On February 13, TD Cowen analyst Krish Sankar raised the price target on Applied Materials (NASDAQ: AMAT) to $450.00 (from $315.00) while reiterating its “Buy” rating.
The research firm believes that AMAT is poised to benefit from stronger semiconductor equipment demand in C26. In particular, it noted over 20% system growth for both AMAT and Lam Research, which is above ASML and KLAC.
With AMAT and LRCX together representing roughly 30% of global wafer fabrication equipment (WFE), the key question is whether it is the overall WFE market that will grow 20% or share gains will be driven by rising deposition and etch intensity from DRAM node complexity and GAA foundry transition.
Either way, see AMAT as well positioned to benefit. PT to $450.
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.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 115
AMD may own a dominant position in the consumer and server CPU markets, but analysts believe it is still a catch-up AI accelerator player. On February 12, DA Davidson analyst Gil Luria initiated coverage on AMD (NASDAQ: AMD) with a Neutral rating and a price target of $220.
According to the firm, AMD’s Instinct GPUs compare great on paper, particularly the MI300X, MI350X, and MI400X offering specifications that appear broadly competitive on a single-node basis.
However, the reality is that customers are not buying spec sheets and that success in frontier AI workloads depend less on standalone chip metrics and more on interconnect and systems-integration. These, it noted, are areas that Nvidia has a hold on and AMD doesn’t.
The result is that real-world model FLOPs utilization on AMD’s hardware at scale runs materially below what the spec sheet implies, which means the effective cost per useful FLOP is worse than advertised.
Customer adoption patterns are a useful indicator, with OpenAI a telling sign. Companies such as the AI startup prefer competing technologies over AMD’s accelerators.
We’d argue the most telling sign is OpenAI, who is arguably the single most compute-hungry lab without a captive relationship to any hyperscaler’s proprietary silicon. And yet, we’d ascertain that OpenAI likely ranks AMD behind not only NVIDIA, but its own Broadcom ASIC program, and potentially even Trainium and TPU if they had access.
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 115
Tesla (NASDAQ: TSLA)’s physical AI strategy is increasingly being seen as a multi-layered, multi-year growth driver on Wall Street. On February 12, Tigress Financial Partners analyst Ivan Feinseth resumed coverage on Tesla (NASDAQ: TSLA) with a Buy rating and a price target of $550.
Separately, on February 13, Wells Fargo reiterated the stock as “Underweight,” stating that its data checks show delivery numbers remain weak.
Of the 4 major markets we track, Jan TSLA deliveries are trending -18% y/y & -59% m/m. Cont’d weakness in EU, while China domestic deliveries are at lowest since Nov’22, & highest exports since Oct’22.
Despite these near-term demand concerns, Tigress sees long-term growth and value creation being driven by Tesla’s evolution from a pure-play EV manufacturer into physical AI platform. This pivot to a physical AI flywheel is centered on technologies such as FSD, robotaxis, and Humanoid robots creating multiple layers of long-term growth.
Full Self-Driving (FSD), robotaxis, and the broader autonomy stack are emerging as TSLA’s most powerful growth engine, transforming the business from vehicle seller into a recurring, high-margin software and mobility-as-a-service platform.
The strategic pivot will help Tesla improve its long-term financial profile, which includes business performance trends, economic profit, and return on capital. Besides autonomy and AI initiatives, the firm also highlighted Tesla’s Semi program, expected to enter its first year of high-volume production ramp in 2026. The company’s energy and storage business also adds a powerful, higher quality leg to the investment case.
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
2. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 183
One global technology firm with a robust structural AI opportunity ahead is Broadcom. On February 12, DA Davidson analyst Gil Luria initiated coverage on Broadcom Limited (NASDAQ: AVGO) with a Neutral rating and a price target of $335.
While analysts acknowledge AVGO’s structural AI opportunity, they believe long-term customer behavior could cap upside. The firm, in particular, expressed concerns about the long-term sustainability of Broadcom’s position in the AI application-specific integrated circuit (ASIC) market. This is despite these components gaining growing importance in the market.
While AI ASICs have been becoming increasingly important for labs and hyperscalers that pursue workload-specific accelerators, analysts believe significant headwinds exist for suppliers like Broadcom.
The relevance of the AI ASIC has grown increasingly more important as labs/hyperscalers pursue more workload-specific accelerators. And while we respect the role of design partners in bringing these programs to volume, we see a potential path for the largest of customers to internalize more of the stack in the next few years, pressuring supplier economics. Under this assumption, we do not believe Broadcom’s AI ASIC exposure warrants a premium multiple versus market leaders such as NVIDIA, and initiate coverage with a NEUTRAL rating and $335 price target.
Broadcom is a technology company uniquely positioned for the AI revolution, thanks to its custom chip offerings and networking assets.
1. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
Analysts are growing more confident in Alphabet’s autonomous driving story. In recent news, on February 13, TD Cowen analyst John Blackledge reiterated a Buy rating on Alphabet (NASDAQ: GOOG) with a $365.00 price target.
Blackledge highlighted Waymo’s scaling momentum characterized by its more than 280K weekly trips, improving utilization, and stronger geo expansion in CA. He noted how Waymo has completed 1.26 million trips with passengers in California during December 2025, up from 1.02 million trips in September 2025.
Meanwhile, passenger miles per trip grew 3.8% quarter-over-quarter in the fourth quarter of 2025, implying geographic expansion and freeway access in Los Angeles and San Francisco. As per the firm, utilization metrics have seen improvement on a year-over-year basis, particularly as minutes between trips decreased to 18 minutes per trip in December 2025 compared to 27 minutes per trip in the same period a year earlier.
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
While we acknowledge the potential of GOOGL 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 GOOGL and that has 100x upside potential, check out our report about this cheapest AI stock.
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