In this article, we will look at the 10 Best Pick and Shovel AI Stocks to Invest In.
AI pick-and-shovel stocks are getting more attention as investors look beyond model builders and toward the companies supplying the hardware, power, and physical capacity needed to make AI work. The demand backdrop remains hard to ignore as hyperscalers keep spending on chips, data centers, power equipment, networking, and electrical infrastructure.
BlackRock says AI is creating “capacity constraints in many key inputs,” with infrastructure requiring “semiconductors, equipment, labor, data centers,” and “massive amounts of power.” In summary, the AI race is not only about who builds the best model, but also who supplies the bottlenecks. Fidelity makes a similar point, saying “AI requires vast quantities of computational power and electricity,” and that fund managers see potential opportunity among “chipmakers, utilities, energy providers” helping build capacity. Janus Henderson calls AI a “multi-year infrastructure and capital formation supercycle,” focused on “critical infrastructure and enabling technologies,” not “downstream applications alone.”
Against this backdrop, AI pick-and-shovel stocks offer a different way to invest in the AI buildout. With that in mind, let’s take a look at the 10 Best Pick and Shovel AI Stocks to Invest In.
Our Methodology
We used the Finviz screener to identify AI pick-and-shovel stocks. We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. KLA Corporation (NASDAQ:KLAC)
On June 29, 2026, Cantor Fitzgerald raised its price target on KLA Corporation (NASDAQ:KLAC) to $325 from $250 and kept an Overweight rating. Cantor Fitzgerald viewed the AI infrastructure buildout as a durable and extended generational semiconductor cycle, supported by supply chain constraints. The firm expects industry revenue expansion to reach roughly $3T by CY29 and potentially exceed $3.5T by CY30.
On June 23, BofA analyst Vivek Arya raised the firm’s price target on KLA Corporation to $317 from $210 and kept a Buy rating. Arya updated BofA’s semiconductor industry models and price objectives to reflect higher industry estimates, raising the firm’s calendar year 2030 total semiconductor industry addressable market forecast to $2.7T from $2.3T. BofA said the increase was led mostly by growth in memory and data center, with additional support from recovery in auto and industrial markets.
On June 22, Wells Fargo raised its price target on KLA Corporation to $305 from $210 and kept an Overweight rating. Wells Fargo said it expects continued positive semi-cap results in Q2.
KLA Corporation designs, manufactures, and markets process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide.
9. Vertiv Holdings Co (NYSE:VRT)
On July 1, 2026, Vertiv Holdings Co (NYSE:VRT) announced the opening of its manufacturing facility in Johor, Malaysia, expanding its manufacturing footprint to support demand for AI and high-density computing infrastructure across Asia, including Southeast Asia, North Asia, Australia, and New Zealand. The facility strengthens Vertiv’s regional manufacturing, engineering, logistics, and deployment capabilities for critical digital infrastructure. It supports end-to-end manufacturing, assembly, and full-scale witness testing for advanced thermal and power infrastructure, helping deliver high-density solutions with validated performance. The facility is expected to bring hundreds of skilled jobs to the region when fully operational in 2027.
On June 10, Bernstein initiated coverage of Vertiv with an Outperform rating and $416 price target. Bernstein said Vertiv makes data center power and cooling equipment and is “arguably the only pure-play with scale.” The firm said its fiscal 2028 estimates are materially ahead of the sell-side and cited Vertiv’s “robust earnings power” for the Outperform rating.
Earlier, Oppenheimer analyst Noah Kaye raised the firm’s price target on Vertiv to $353 from $330 and kept an Outperform rating. Kaye said the company’s Investor Conference Day 2 highlighted a differentiated value proposition based on faster innovation cycles, scale, breadth of offerings, and expertise across domains. Oppenheimer said Vertiv’s ability to translate that value proposition into a higher wallet share compared with the current mix-weighted $3.25-3.75/MW supports upside versus 2030 targets.
Vertiv Holdings Co designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments across the Americas, the Asia Pacific, Europe, the Middle East, and Africa.
8. Ciena Corporation (NYSE:CIEN)
On June 22, 2026, Ciena Corporation (NYSE:CIEN) announced the appointment of Grant Hoffman as Chief Supply Chain Officer and the transition of Brodie Gage to Chief Product and Technology Officer. Both report to President and CEO Gary Smith and serve on Ciena’s Executive Leadership Team. The appointments are intended to support Ciena’s growth by strengthening its ability to scale operations while advancing innovation and product leadership.
On June 10, Colt Technology Services and Ciena completed one of the fastest quantum-safe data transmissions ever demonstrated and the fastest across a transatlantic route. The trial protected live data across 6900km of Colt’s subsea and terrestrial network between New York and London using Ciena’s WaveLogic 6 Extreme encryption solution. The companies said the trial showed data could be securely transmitted at an 800Gb Ethernet service rate while remaining protected against quantum threats.
On June 9, Ciena priced its private offering of $2.5 billion aggregate principal amount of 0.00% convertible senior notes due 2031, up from the previously announced $2.0 billion. Ciena also granted initial purchasers an option to buy up to an additional $375.0 million aggregate principal amount of notes within a 13-day period starting on the first issue date.
Ciena Corporation provides hardware, software, and services for network operators in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and India.
7. Equinix, Inc. (NASDAQ:EQIX)
On July 1, 2026, Barclays raised its price target on Equinix, Inc. (NASDAQ:EQIX) to $1,130 from $1,109 and kept an Equal Weight rating. Barclays raised targets across the communications infrastructure real estate investment trust group, citing higher growth expectations than previously modeled. The firm said the companies are benefiting from ongoing hyperscale demand and accelerating enterprise AI demand.
On June 29, Citi analyst Michael Rollins raised the firm’s price target on Equinix to $1,260 from $1,240 and kept a Buy rating. Rollins said Equinix is benefiting from the ongoing growth in cloud and AI workloads, and that the company’s report should show its multi-year growth prospects.
Equinix also unveiled an expanded collaboration with Cisco (CSCO) and Nvidia (NVDA) to accelerate enterprise AI. The companies will enable customers to deploy Cisco Secure AI Factory with Nvidia across Equinix’s global data center network, using standardized AI factory blueprints and automation. Equinix is also partnering with Presidio to deploy the Programmable AI Technology Hub Lab, giving customers a real-world environment inside Equinix data centers to test, validate, and refine AI infrastructure before enterprise-wide rollout.
Equinix, Inc. provides digital infrastructure and data center services worldwide.
6. Seagate Technology Holdings plc (NASDAQ:STX)
On July 1, 2026, BofA analyst Wamsi Mohan raised the firm’s price target on Seagate Technology Holdings plc (NASDAQ:STX) to $1,150 from $1,000 and kept a Buy rating. Mohan said the hard disk drive industry is now more disciplined about adding exabyte capacity without adding unit capacity. BofA also believes most of Seagate’s nearline HDD volume is under build-to-order contracts and expects the company to raise pricing as those contracts come up for renewal.
On June 29, Cantor Fitzgerald raised its price target on Seagate to $1,300 from $1,000 and kept an Overweight rating. Cantor Fitzgerald viewed the AI infrastructure buildout as a durable and extended generational semiconductor cycle, supported by supply chain constraints. The firm expects industry revenue expansion to reach roughly $3T by CY29 and potentially exceed $3.5T by CY30.
On June 15, Morgan Stanley raised its price target on Seagate to $1,035 from $767 and kept an Overweight rating. Morgan Stanley said its Asia checks from the prior three weeks showed the hard disk drive cycle is extending, with greater shortages now expected through at least calendar year 2028. The firm also said HDD pricing is “clearly, and meaningfully, strengthening.”
Seagate Technology Holdings plc (NASDAQ:STX) provides data storage technology and infrastructure solutions in Singapore, the United States, the Netherlands, and internationally.
5. Digital Realty Trust, Inc. (NYSE:DLR)
On July 1, 2026, Barclays raised its price target on Digital Realty Trust, Inc. (NYSE:DLR) to $197 from $189 and kept an Equal Weight rating. Barclays raised targets across the communications infrastructure real estate investment trust group, citing higher growth expectations than previously modeled. The firm said the companies are benefiting from ongoing hyperscale demand and accelerating enterprise AI demand.
On June 30, Digital Realty and Blackstone announced that Digital Realty agreed to purchase stakes from Blackstone-affiliated funds in three fully leased Northern Virginia data centers with 288 megawatts of total IT capacity. The transaction values the assets at a gross value of $7.8B and reflects an expected initial stabilized capitalization rate of over 6.5%. Digital Realty will pay Blackstone $3.5B for its blended 64% equity interest, including $1.2B in cash and $2.3B in Digital Realty shares, based on the last reported sale price of the company’s common stock on June 29.
The portfolio includes two data centers in Manassas and one on the Digital Dulles campus in Sterling, each with 96 megawatts of IT capacity and 100% leased to three distinct investment-grade hyperscale customers. Two of the data centers are expected to stabilize in the first half of 2027, while the third is expected to stabilize in the first half of 2028. The purchase is expected to be completed on June 30, subject to customary closing conditions.
Digital Realty Trust, Inc. provides data center, colocation, and interconnection solutions.
4. Iron Mountain Incorporated (NYSE:IRM)
On July 1, 2026, Barclays analyst Brendan Lynch raised the firm’s price target on Iron Mountain Incorporated (NYSE:IRM) to $143 from $127 and kept an Overweight rating. Lynch said Barclays raised targets across the communications infrastructure real estate investment trust group due to higher growth expectations than previously modeled. The firm said the companies are benefiting from ongoing hyperscale demand and accelerating enterprise AI demand.
On June 15, Iron Mountain announced a proposed offering of $1B aggregate principal amount of Senior Notes due 2035. The notes will initially be fully and unconditionally guaranteed by the company’s subsidiaries that are obligors under each series of its existing notes. Iron Mountain intends to use the net proceeds to repay part of the amounts outstanding under its revolving credit facility, pay related fees and expenses, and for general corporate purposes. The exact terms and timing will depend on market conditions and other factors.
Earlier, Truist analyst Tobey Sommer raised the firm’s price target on Iron Mountain to $140 from $130 and kept a Buy rating after better-than-expected Q1 results. Sommer said data center lease trends tend to drive the stock because the segment has a larger total addressable market, higher margins, and better multiples.
Iron Mountain Incorporated provides services that help customers unlock value and intelligence from physical and digital assets.
3. CoreWeave, Inc. (NASDAQ:CRWV)
On July 2, 2026, Rosenblatt viewed the prior day’s selloff in CoreWeave, Inc. (NASDAQ:CRWV) shares as a buying opportunity after Bloomberg reported that Meta Platforms (META) is planning a cloud business to sell AI computing power. Rosenblatt said its channel checks show no change in hyperscale demand for GPU compute procurement, with GPU shortages remaining “the norm right now across the industry.” The firm also does not believe Meta has the right to resell to third parties any capacity it has leased from CoreWeave through 2032. Rosenblatt reiterated a Buy rating and $250 price target on CoreWeave.
On the same day, Jefferies said it is “bullish” on reports that Meta is entering the cloud business. The firm argued that Meta is following Amazon’s (AMZN) AWS playbook by monetizing excess compute to lift utilization, improve ROIC, and boost cash flow to fund more capex. Jefferies also called a cloud business “strategic” to Meta’s longer-term AI ambitions, while saying CoreWeave’s value remains intact because it is “one of the best” at hosting AI compute.
On June 29, CoreWeave announced the launch of CoreWeave ARIA, an AI research agent built directly into Weights & Biases. ARIA was built using W&B Weave, CoreWeave’s agent development platform, whose agent development capabilities also entered general availability that day. Praneeth Gangavarapu, PhD Candidate at Scripps Research, said ARIA has become a “valuable part” of daily workflow by helping generate reports, create sweep configurations from natural language, and automate manual setup tasks.
CoreWeave, Inc. operates as a cloud infrastructure technology company in the United States.
2. Constellation Energy Corporation (NASDAQ:CEG)
On July 1, 2026, Citi lowered its price target on Constellation Energy Corporation (NASDAQ:CEG) to $297 from $348 previously and kept a Neutral rating on the shares. Citi updated its model after the PJM meeting.
On June 26, Constellation filed license renewal applications with the Nuclear Regulatory Commission to extend operations of the Ginna Clean Energy Center and Nine Mile Point Unit 1 reactors in upstate New York to 2049. The company said the decision reflects New York State’s renewal of its Zero Emissions Credit program. CEO Joe Dominguez cited the company’s “safe, reliable, zero-emission power,” noting that Constellation’s four upstate nuclear units provide nearly half of New York’s clean power. Constellation said renewal of the ZEC program is projected to deliver $50B in ratepayer savings by 2050, contribute $38B to New York’s economy, secure 14,000 local jobs, and preserve $10B in tax revenue for the state.
On June 24, Morgan Stanley raised its price target on Constellation Energy to $364 from $359 and kept an Overweight rating. Morgan Stanley updated price targets for Regulated & Diversified Utilities / IPPs in North America for May and noted that utilities underperformed the S&P’s return for the month.
Constellation Energy Corporation produces and sells electricity, natural gas, energy-related products, and sustainable solutions in the United States.
1. Quanta Services, Inc. (NYSE:PWR)
On July 2, 2026, Truist raised its price target on Quanta Services, Inc. (NYSE:PWR) to $940 from $851 and kept a Buy rating. Truist adjusted estimates and targets across the machinery, infrastructure services, and multi-industry group as part of a Q2 preview. The firm sees a positive setup for Q2 earnings reports across the sector, with demand trends remaining strong and supported by secular growth tailwinds in power, data center, aerospace and defense, and infrastructure.
Towards the end of May, Oppenheimer upgraded Quanta Services to Outperform from Perform with an $800 price target following a transfer of coverage. Oppenheimer said Quanta is “positioned in markets with superior growth prospects,” citing exposure to power generation, complex facilities development, underground delivery network modernization, and pipeline. The firm said these areas are needed to support electrification demand, AI development, and other secular drivers, and sees potential margin expansion for Quanta.
Earlier, Quanta Services’ Board of Directors, in support of management’s request, authorized a new stock repurchase program allowing the company to buy up to $1B of its outstanding common stock from time to time. Under the existing stock repurchase program, which expires June 30, 2026, Quanta had acquired 540,788 shares of common stock in the open market for approximately $135M.
Quanta Services, Inc. provides infrastructure solutions for the electric and gas utility, power generation, load center, manufacturing, communications, pipeline, and energy industries.
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