On September 11, Trivariate’s Adam Parker joined CNBC’s ‘Closing Bell’ to discuss where markets are in the AI investing cycle. Parker stated that we’re two years into a decade-long AI investment trend. He recalled a conversation with his colleague, Scott, who had a “dour mood” and questioned if the AI trade was over after a single down day. Parker explained that he believes the trend is far from over, and that it is necessary to maintain AI exposure in an equity book that is benchmarked against the S&P 500.
He also cautioned against the idea that the AI trend is limited to just a few names. He then brought up a key challenge for investors: at what point will concerns about the return on capital spending weigh on equities? He also mentioned the transition from companies that are obvious AI beneficiaries to those that benefit from the resulting productivity gains and stated that this will happen in H2 2026 and in 2027. He believes that this transition is still to come and that, for now, investors must own a significant amount of tech stocks.
He expressed that he was not surprised by the market’s reaction, even though it was significant. He pointed to the upward trends seen in many AI-related companies. Parker explained his general investment rule, which is to own semiconductors over software. Historically, this sector grew at 2% above GDP for over 30 years, but he forecasts it will grow at 5%, 6%, or even 7% above GDP for the next five to seven years. This growth, he added, will occur at higher gross margins than in the past because many of the businesses now outsource the chip manufacturing.
That being said, we’re here with a list of the 10 best AI stocks to buy according to analysts.
Our Methodology
We sifted through different financial media reports to compile a list of the top AI stocks. We then selected the 10 stocks with an upside potential of over 10% as of September 12. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q2 2025, which was sourced from Insider Monkey’s database.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best AI Stocks with Huge Upside Potential
10. Lantronix Inc. (NASDAQ:LTRX)
Number of Hedge Fund Holders: 9
Average Upside Potential as of September 12: 12.61%
Lantronix Inc. (NASDAQ:LTRX) is one of the best AI stocks to buy according to analysts. On August 28, Christian Schwab from Craig-Hallum reiterated a Buy rating on Lantronix, with a price target of $5.00. This sentiment followed the company’s announcement of its financial results for FQ4 2025 and FY2025. The company reported a FQ4 revenue of $28.8 million, which was a sequential increase from $28.5 million. For the full FY2025, total revenue was $123 million.
Despite a return to sequential revenue growth, the company faced some financial challenges. For Q4 2025, Lantronix reported a GAAP net loss of $2.6 million, or $0.07 per share, compared to a GAAP net income of $400,000 in the same quarter of the previous year.
Lantronix secured an agreement with a US mobile carrier to modernize 50,000+ backup power systems and wireless cell sites. The company also announced a win with Red Cat’s Steel Drones, where its secure edge compute solutions will power Black Widow drones for the US Army’s short-range reconnaissance program.
Lantronix Inc. (NASDAQ:LTRX) develops, markets, and sells industrial and enterprise IoT products and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan.
9. Synaptics Incorporated (NASDAQ:SYNA)
Number of Hedge Fund Holders: 29
Average Upside Potential as of September 12: 12.98%
Synaptics Incorporated (NASDAQ:SYNA) is one of the best AI stocks to buy according to analysts. On September 3, Righ, which is a company that specializes in distributed Agentic AI on edge devices, announced a partnership with Synaptics for the development of smart home Agentic AI applications.
The collaboration will combine Righ’s distributed AI platform, RighValor, with Synaptics’ Astra SL1680 SoC and Righ’s network control plane, RighGravity. The partnership enables intelligent services to run directly in the home without relying on cloud computing. This approach is designed to reduce latency, ensure user privacy, and lower operational costs.
The companies will demonstrate their integrated solution at IBC 2025, showcasing live Agentic AI in action. The demonstration will highlight capabilities such as distributed parallelism, on-device image processing, and real-time device and user identification. The collaboration will allow service providers and device manufacturers to deploy next-gen AI services with zero reliance on cloud compute.
Synaptics Incorporated (NASDAQ:SYNA) develops, markets, and sells semiconductor products worldwide. The company sells its products through direct sales, outside sales representatives, OEM distributors, and value-added resellers.
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