Nvidia has recently agreed to purchase a nonexclusive license for technology from privately held Groq, marking the latest move in the artificial intelligence race.
As per reports from CNBC and The Information, the deal is valued at around $20 billion, and will involve Nvidia hiring key employees from Groq.
Several analyst firms have expressed their surprise at the reported valuation of the Groq deal, stating that although they are aware of Groq’s specialty in chips for inference, the technology doesn’t warrant that level of valuation.
“It is not clear what sparked the rapid, significant increase in value to Nvidia’s $20 billion price. We have met with Groq in the past and are familiar with their offering, but we are not aware of any changes in their market position in recent months that would merit such an increase.”
-Seaport Research analyst Jay Goldberg.
“We find it hard to believe there aren’t better assets in the same market for Nvidia to take a look at.”
-D.A. Davidson analyst Alex Platt.
The firm argued that Groq’s current chips have limited memory capacity, implying that its hardware isn’t suitable for many inference tasks.
“The (unconfirmed) $20 billion price that Nvidia is paying is certainly large in absolute terms, and even relative to Groq’s revenue, which we have seen estimated at between $90 million and $500 million.”
-Truist Securities analyst William Stein.
Nevertheless, by avoiding complete takeovers, tech companies have been able to avoid some level of antitrust scrutiny and quickly close deals to lock in talent.
“Antitrust would seem to be the primary risk here, though structuring the deal as a non-exclusive license may keep the fiction of competition alive.”
– Stacy Rasgon, an analyst at Bernstein.
Overall, the recent deal between AI chipmaker Nvidia and Groq underscores how fierce the AI race is becoming. It is also a reflection of how competition and spending in AI are far from slowing down.
For this article, we used Finviz and Insider Monkey’s database of AI stocks to select AI stocks that are trading at under $50 per share, as of December 29. We have picked the 10 stocks that are the most popular among elite hedge funds, as of Q3 2025.
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10. CEVA, Inc. (NASDAQ:CEVA)
Share Price as of December 31: $21.77
Number of Hedge Fund Holders: 12
CEVA, Inc. (NASDAQ:CEVA) is one of the 10 Best AI Stocks to Buy under $50. The company, a leading licensor of silicon and software IP, announced its financial results for the third quarter of 2025 on November 10th.
Ceva reported total revenues of $28.4 million, marking an 11% sequential increase and a 4% year-over-year growth. In particular, AI processor licensing contributed an estimated one-third of the licensing revenue.
The company also achieved several strategic wins during the year, including a major NeuPro NPU portfolio license agreement with Microchip and three new AI DSP agreements.
Reflecting this growing optimism around the stock, Loop initiated CEVA as “Buy” on December 1st. The firm believes that the semiconductor company is too attractive to ignore.
“We are initiating coverage of CEVA, Inc. (CEVA) with a Buy rating and $28 price target.”
In separate news, the company announced on November 17 that it started an underwritten public offering of 3,000,000 shares of its common stock. It also agreed to grant the underwriters a 30-day option to buy up to an additional 450,000 shares of the common stock, with plans to use the net proceeds for instances such as finance potential acquisitions of, or investments in, complementary technologies or businesses.
Analysts on Wall Street currently have a consensus Buy rating on the stock. The average price target of $35 implies a 62.72% upside, however, the Street-high target of $40 implies an upside of 85.96%.
CEVA, Inc. (NASDAQ:CEVA) offers silicon and software IP solutions to semiconductor and OEM companies.
9. DigitalOcean Holdings, Inc. (NYSE:DOCN)
Share Price as of December 31: $48.80
Number of Hedge Fund Holders: 30
DigitalOcean Holdings, Inc. (NYSE:DOCN) is one of the 10 Best AI Stocks to Buy under $50. The comprehensive agentic cloud posted stellar earnings performance in the third quarter, followed by a higher growth outlook for full-year 2025.
It posted revenues of $230 million, up 16% year-over-year, while net income was $158 million, up 381% year-over-year. Paddy Srinivasan, CEO of DigitalOcean, noted how the company’s unified agentic cloud platform is “emerging as a preferred destination for AI and digital native enterprises building and scaling AI workloads.”
Looking ahead, it raised its full-year guidance from $896 to $897 million in revenues and $2.00 to $2.05 in Non-GAAP diluted net income per share.
The company also recently made headlines after it announced a new AI partnership aimed at advancing scalable and secure AI systems. Persistent Systems, a global Digital Engineering and Enterprise Modernization leader, is collaborating with DOCN to develop cost-effective infrastructure that supports enterprise growth and innovation.
Under the agreement, Persistent has selected DigitalOcean as its cloud and AI infrastructure provider for its AI-powered platform SASVA, which will run on DigitalOcean’s Gradient AI Agentic Cloud and GPU offerings.
By combining Persistent’s AI engineering expertise with DigitalOcean’s cloud infrastructure and AI platform capabilities, the collaboration seeks to enable companies to address challenges organizations face in AI adoption.
These challenges include rising GPU and infrastructure costs, challenges in agent development ecosystems, and security concerns.
DigitalOcean Holdings, Inc. (NYSE:DOCN) operates a cloud computing platform.
8. Upstart Holdings, Inc. (NASDAQ:UPST)
Share Price as of December 31: $44.96
Number of Hedge Fund Holders: 37
Upstart Holdings, Inc. (NASDAQ:UPST) is one of the 10 Best AI Stocks to Buy under $50. This AI lending platform helps banks and credit unions better assess credit risk. While lenders typically use simple rule-bases systems focusing heavily on FICO scores and limited variables, UPST evaluates over 2,500 data points for the same.
Moreover, the platform’s learning models continuously learn and evolve with each borrower’s repayment behavior. In early November, Mizuho analyst Dan Dolev lowered the firm’s price target on the stock to $66 from $86 and kept an “Outperform” rating on the shares. The firm updated the company’s model post the Q3 report.
The AI lending marketplace reported third-quarter revenue of $277.1 million, a slight miss compared to the forecast of $279.59 million. On the other hand, earnings for the quarter, $0.52, surpassed the forecast of $0.42. Looking ahead, the company projects Q4 2025 revenue to reach $288 million and forecasts a full-year 2025 revenue of $1.035 billion.
The CEO of Upstart is optimistic about the company’s game plan post its quarterly report.
“In Q3, we continued to execute on our 2025 game plan of rapid growth, profitability, and AI leadership — all anchored in exceptional credit performance. The results include 80% year-on-year growth in originations with 71% growth in revenue, and a sixfold sequential increase in GAAP net income. Our AI platform is performing exactly as designed, rapidly adapting to evolving macro signals while delivering strong results.”
-Dave Girouard, Co-founder and CEO of Upstart.
Upstart Holdings, Inc. (NASDAQ:UPST) operates a cloud-based artificial intelligence (AI) lending platform in the United States.
7. Applied Digital Corporation (NASDAQ:APLD)
Share Price as of December 31: $24.08
Number of Hedge Fund Holders: 38
Applied Digital Corporation (NASDAQ:APLD) is one of the 10 Best AI Stocks to Buy under $50. APLD, a builder and operator of next-generation digital infrastructure designed for HPC and AI workloads, entered into a loan facility with Macquarie Group’s Commodities and Global Market’s business on December 18th.
The loan facility aims to fund the pre-lease development costs for new data center projects, supporting early-stage sourcing, planning, development, and construction of new data center campuses.
APLD said that it is in advanced negotiations with an investment-grade hyperscaler for multiple campuses. It also plans to draw an initial $100 million from the facility to fund development activities.
“This development facility strengthens our ability to move quickly on high-quality sites while maintaining capital flexibility. As demand for AI-optimized data center infrastructure continues to accelerate, this financing is intended to support our strategy of developing purpose-built campuses for hyperscale customers.”
-Wes Cummins, Chairman and Chief Executive Officer of Applied Digital.
In separate news, the company has announced that it would spin off Applied Digital Cloud into a separate company. This spinoff would be done through a merger with EKSO Bionics Holdings Inc., an exoskeleton technology firm for medical and industrial uses. The combined company, ChronoScale, would focus solely on an accelerated compute platform for AI workloads.
Analysts on Wall Street currently have a consensus Buy rating on the stock. The average price target of $40.50 implies a 68.40% upside, however, the Street-high target of $56 implies an upside of 132.85%.
Applied Digital Corporation (NASDAQ:APLD) designs, builds, and operates data centers for artificial intelligence, cloud, networking, and blockchain workloads.
6. Samsara Inc. (NYSE:IOT)
Share Price as of December 31: $35.98
Number of Hedge Fund Holders: 42
Samsara Inc. (NYSE:IOT) is one of the 10 Best AI Stocks to Buy under $50. On December 22, Evercore highlighted Microsoft, Salesforce, and Oracle as its top enterprise software picks for 2026. Besides these names, Samsara Inc. was highlighted as a favored idea, alongside Intuit and Snowflake.
According to the analysts, these names pair secular AI exposure with visible revenue sustainability.
A few days prior, on December 17, BTIG initiated coverage of the stock with a “Buy” rating and $55 price target. As per analysts, Samsara has remained one of the fastest-growing software companies even though it has scaled to $1.7B in annual recurring revenue. The firm noted that the company is likely to maintain durable and efficient growth over the medium term.
TD Cowen is also constructive on the stock, reiterating its Outperform rating and lifting its price target from $49 to $55 on December 5. The firm believes Samsara is a “top software executor,” on the back of a strong revenue beat, net-new annual recurring revenue (ARR) growth acceleration, and momentum across multiple product lines.
Samsara Inc. (NYSE:IOT) provides a connected operations cloud platform that helps organizations with physical operations improve safety, efficiency, and sustainability.
5. Super Micro Computer, Inc. (NASDAQ:SMCI)
Share Price as of December 31: $29.65
Number of Hedge Fund Holders: 42
Super Micro Computer, Inc. (NASDAQ:SMCI) is one of the 10 Best AI Stocks to Buy under $50. This AI infrastructure stock issued its latest fiscal first quarter results for 2026 back in November.
Its adjusted earnings per share came in at $0.35, falling short of Wall Street expectations of $0.40. Meanwhile, revenue totaled $5.02 billion, compared with analyst expectations of $6 billion.
Goldman Sachs noted how SMCI fell short of its Q1 earnings guidance as customer deliveries were pushed into the next quarter.
“SMCI’s F1Q26 EPS of $0.35 missed guidance for $0.40-$0.52 on a previously announced revenue miss driven by deliveries pushed from F1Q to F2Q as customers upgrade their designs. F2Q26 guidance mixed, with a doubling of revenue qoq offset by a ~300 bps sequential decline in gross margins.”
-Goldman Sachs analysts in an investor note.
The firm has a Sell rating on the stock owing to long-term profitability concerns in a competitive AI server market.
Meanwhile, Bank of America has an Underperform rating on the stock with a price target of $34. According to the analysts, SMCI’s competitive advantages lies in its large manufacturing capacity and its capability to ship thousands of liquid-cooled racks every month.
Even then, the analysts warn that with the AI server landscape becoming more competitive by the day, bigger deals often comes with tighter margins.
“However, as we have highlighted in the past, the AI server market is very competitive and large deals typically come with lower margins as it’s a competitive bidding process.”
Super Micro Computer, Inc. (NASDAQ:SMCI) designs and manufactures high-performance server and storage solutions for data centers, cloud computing, AI, and edge computing worldwide.
4. The Trade Desk, Inc. (NASDAQ:TTD)
Share Price as of December 31: $38.12
Number of Hedge Fund Holders: 42
The Trade Desk, Inc. (NASDAQ:TTD) is one of the 10 Best AI Stocks to Buy under $50. After peaking in late 2024, the stock has fallen more than 60% year-to-date. While part of this plunge reflects a broader reset for some growth stocks, some weakness reflects company-specific disappointment, including management admitting that it fell short of its own expectations in Q4 2024.
Even so, the company’s underlying business seems to grow. The company reported third-quarter revenue of $739 million, an increase of 18% year over year.
On November 7, Benchmark upgraded the stock to “Buy” from Hold with a $65 price target. The company’s revenue growth, which was 22% excluding political ad spending, shows that earlier worries about the company falling behind the industry are beginning to fade.
Benchmark also highlighted new tools in its ad-buying platform, such as OpenPath, OpenAds, and Deal Desk, which are anticipated to be “critical differentiators driving significant AI efficiency gains” and counter commoditization concerns.
Similarly, Susquehanna lowered the firm’s price target on the stock to $85 from $135 and kept a Positive rating on the shares. The firm believes that following a “nice beat and raise” quarter, guidance indicates that that core growth could get back into the 20% year-over-year range to end the year. Overall, the firm remains constructive on the stock heading into 2026.
The Trade Desk, Inc. (NASDAQ:TTD) provides a self-service, cloud-based platform for advertisers to buy and manage data-driven digital ads across various channels.
3. GitLab Inc. (NASDAQ:GTLB)
Share Price as of December 31: $38.16
Number of Hedge Fund Holders: 51
GitLab Inc. (NASDAQ:GTLB) is one of the 10 Best AI Stocks to Buy under $50. On December 16, Keybanc downgraded GTLB from Overweight to Sector Weight, with no changes in price targets.
The firm sees “incremental execution risk” for the stock, reflecting near-term caution despite its longer-term AI potential.
The firm anticipates pricing to act as a headwind throughout 2026, limiting upside. Moreover, the company’s transition to a hybrid model that includes consumption/usage based elements with the Duo Agent Platform may introduce execution risk as well.
Lastly, the continued rise of AI code generation may weigh on developer headcount growth, noted the firm.
“The continued overhang of AI code generation weighing on developer headcount growth for seat-based models likely remains. While we continue to appreciate GitLab’s platform driving consolidation opportunities, we see more balanced risk-reward at current levels.”
Despite these concerns, the analysts appreciate GTLB’s platform owing to its ability to simplify workflows and view the stock as more fairly valued.
Analysts on Wall Street have a consensus “Buy” rating on the stock. The average price target of $52.50 implies a 37.47% upside; however, the Street-high target of $72 implies an upside of 88.53%.
GitLab Inc. (NASDAQ:GTLB) is the company behind GitLab, a comprehensive, AI-powered DevSecOps platform that enables organizations to plan, build, secure, and deploy software in a single application.
2. Hewlett Packard Enterprise Company (NYSE:HPE)
Share Price as of December 31: $24.07
Number of Hedge Fund Holders: 72
Hewlett-Packard Enterprise Company (NYSE:HPE) is one of the 10 Best AI Stocks to Buy under $50. In the past few months, HPE has achieved several key milestones. The company completed its acquisition of Juniper Networks, divested its Telco-Solutions unit, and confirmed plans to sell its remaining 19% H3C stake for an estimated US$1.40 billion.
The acquisition of Juniper Networks, Inc., a leader in AI-native networks, was completed in July; positioning HPE to capitalize on the growing AI and hybrid cloud landscape by creating an industry-leading cloud-native and AI-driven IT portfolio.
The transaction also doubles the size of HPE’s networking business, offering customers with a comprehensive portfolio of networking solutions.
On December 19, Bernstein SocGen Group maintained its “Market Perform” rating on the stock with a $24.00 price target. Earlier, on December 15, Wells Fargo analyst Aaron Rakers maintained a Hold rating on Hewlett Packard Enterprise today and set a price target of $26.00.
Analysts on Wall Street have a consensus “Buy” rating on the stock. The average price target of $26.00 implies a 7.04% upside; however, the Street-high target of $31 implies an upside of 27.62%.
Hewlett Packard Enterprise Company (NYSE:HPE), an American multinational technology company, provides high-performance computing systems, AI software, and data storage solutions for running complex AI workloads.
1. Intel Corporation (NASDAQ:INTC)
Share Price as of December 31: $37.30
Number of Hedge Fund Holders: 81
Intel Corporation (NASDAQ:INTC) is one of the 10 Best AI Stocks to Buy under $50. On December 29, Reuters reported that Nvidia has purchased Intel shares worth $5 billion, carrying out a transaction announced in September.
The AI chipmaker had announced back then that it would pay $23.28 per share for Intel common stock, buying over 214.7 million Intel shares at the price set out in the agreement, as per Monday’s filing. The deal forms part of a broader strategic agreement to co-develop chips for data centers and personal computers.
The share purchase comes just a week after Reuters reported that Nvidia Corp. has halted a test to use Intel’s advanced 18A manufacturing process to make advanced chips. The AI chipmaker tested the so-called 18A process but stopped moving forward, the report said.
Investors had been closely watching Intel’s advanced 18A as a milestone that could help the company compete more directly with Taiwan Semiconductor Manufacturing Company in advanced chip manufacturing. However, the halt now raises concerns about the company’s ability to regain ground in the foundry race.
Intel Corporation (NASDAQ:INTC) designs, manufactures, and sells computer products and technologies, delivering data storage, computer, networking, and communications platforms.
While we acknowledge the potential of INTC 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 INTC and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT:12 Hot AI Stocks on Wall Street’s Radar and 12 AI Stocks in the Spotlight for Investors.
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