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 (NASDAQ:KLAC) 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 (NYSE:VRT) 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 (NYSE:CIEN) 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. (NASDAQ:EQIX) 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.
While we acknowledge the potential of STX to grow, 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 STX and that has 100x upside potential, check out our report about the cheapest AI stock.
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