10 AI Stocks to Watch Out For in 2025

8. Cummins Inc. (NYSE:CMI)

Number of Hedge Fund Holders: 59

Cummins Inc. (NYSE:CMI) is one of the 10 AI Stocks to Watch Out For in 2025. On September 3, Melius analyst Rob Wertheimer upgraded the stock from Hold to Buy with a price target of $500.00.

The firm cited three key factors behind the stock upgrade, with artificial intelligence demand viewed as the most obvious source of upside.

“We are upgrading CMI shares to Buy, and raising our two-year price target to $500, 25% upside from today’s price. Though AI demand is the most obvious source of upside, our thesis has three parts, and each can drive upside. First, Cummins is improving operationally, with room to go. Second, trucks are in a downcycle, and Cummins at ~18x earnings represents an attractive valuation, whether or not a prebuy kicks this upcycle off sooner. Finally, consensus estimates underestimate the revenue and margin potential flowing out of the capacity expansion in large engines for gensets, led by AI demand. We are 13% above consensus in 2027.”