Chinese artificial intelligence startup DeepSeek has recently launched an update to its foundation model DeepSeek-V3.1-Terminus. Unveiled only two months after the Chinese start-up launched V3.1, it enhances coding, search, and language performance while fixing bugs raised by users.

DeepSeek has deemed the V3.1 as the company’s “first step towards the agent era.” The company’s self-reported scores demonstrate that the V3.1-Terminus showed slight improvements on several popular benchmarks.

Despite DeepSeek facing intense competition from rivals like Alibaba Group Holding’s Qwen family and ByteDance’s Doubao, the startups’ models continue to attract substantial global interest.

The weights for DeepSeek-V3.1-Terminus are now available on Hugging Face and other open-source platforms.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q2 2025.

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. SoundHound AI, Inc. (NASDAQ:SOUN)

Number of Hedge Fund Holders: 18

SoundHound AI, Inc. (NASDAQ:SOUN) is one of the 10 Buzzing AI Stocks on Wall Street. On September 23, the voice and conversational AI company announced that it will be partnering with Red Lobster, the world’s largest and most-loved seafood restaurant company, to roll out an AI-powered phone ordering agent that will transform takeout ordering across all Red Lobster locations.

Red Lobster will leverage SoundHound’s advanced AI technology to ensure that every call made to the restaurant is answered. The system will be able to handle multiple calls simultaneously, offer seamless order placement, and answer common guest questions instantly.

The system will be trained on the entire Red Lobster menu, with orders being sent directly to the restaurant’s point-of-sale system. This will make ordering fast and efficient, and also reduce the workload for in-store staff.

“SoundHound is seeing huge demand for our AI-powered voice ordering services, and we’re excited to be working with a renowned brand like Red Lobster to revolutionize the future of ordering. Consumers have been quick to recognize the benefits of our quick and easy system, and employees are grateful for the extra breathing space it gives them to concentrate on delivering first rate customer service.”

-Ben Bellettini, SVP of Restaurant Sales, SoundHound AI.

SoundHound AI, Inc. (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses.

9. BigBear.ai Holdings, Inc. (NYSE:BBAI)

Number of Hedge Fund Holders: 20

BigBear.ai Holdings, Inc. (NYSE:BBAI) ) is one of the 10 Buzzing AI Stocks on Wall Street. On September 23, the company announced that it will deploy its advanced AI and orchestration technologies in support of the U.S. Naval Forces Southern Command/U.S. 4th Fleet at UNITAS 2025, one of the world’s longest-running multinational maritime exercises.

Hosted by the US Navy, the UNITAS will be featuring an estimated 8,000 personnel from 26 allied and partner nations, including the U.S. The exercise will take place on September 15 through October 6, bringing together more than 250 participants from over 20 countries and all branches of the U.S. military.

BigBear.AI will be collaborating with digital solutions leader SMX to showcase AI-powered capabilities that can improve coordination, decision-making, and threat detection in vast maritime operation zones, particularly in missions focused on counter-narcotics, human trafficking, and arms smuggling.

During the exercise, BBAI’s domain awareness and AI orchestration solutions will be integrated across unmanned vehicles and hybrid fleet innovations, while its ArcasTM system will offer computer vision, pattern-of-life analysis, and risk forecasting to deliver near-real-time predictive and prescriptive insights.

Moreover, the company will also be demonstrating ConductorOS, its AI, data, and sensor orchestration platform. The platform can operate in denied, degraded, intermittent, and low-bandwidth (DDIL) environments to help deploy, train, and update AI models at the edge and across distributed missions.

“Our participation in UNITAS 2025 underscores BigBear.ai’s commitment to equipping U.S. and allied forces with mission-ready AI that delivers real impact where it’s needed most. In complex maritime environments – where illicit trafficking, illegal arms smuggling, and other transnational threats strain limited resources – our AI-driven insights can provide operators with enhanced situational awareness and the advantage needed to achieve mission success.”

-Kevin McAleenan, CEO of BigBear.ai.

BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions for national security, digital identity, supply chain and logistics, enterprise operations, and manned-unmanned teaming in autonomous systems.

8. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 33

Baidu, Inc. (NASDAQ:BIDU) is one of the 10 Buzzing AI Stocks on Wall Street. On September 19, Goldman Sachs analyst Lincoln Kong raised the price target on the stock to $154.00 (from $90.00) while maintaining a Buy rating.

The firm highlighted how Baidu’s decline trajectory is well understood by the market and already reflected in street earnings estimates. Q3 2025 is likely to witness the steepest drop in Baidu’s core profits.

Nevertheless, analysts believe that investor focus is now shifting to Baidu’s fast growing non-search businesses, particularly cloud and AI. The firm also holds “constructive views” on Apollo Robotaxi, citing faster rollout, lower costs, and global expansion potential.

“We reassess the fast growing non-search business to factor in the AI accelerants. We estimate non-search revenue will rise to 54% of Baidu core revenue, with cloud accounting for 36% by 2027. Baidu cloud’s core competency lies in its full stack capabilities from chips, platforms to AI empowered software applications. We raise the target multiple to 5X P/S to reflect the growth potential and to align with the peer group. We also have more constructive views on Apollo Robotaxi on its faster fleet rollout, higher industry TAM (see here), and better profitability of the lower BOM cost RT6 car, as well as its international expansion potential. Finally, with the company’s more proactive measures/views on enhancing shareholder buybacks and dividends, we now reflect the full amount of net cash/long term investment in the SOTP valuation.”

Baidu, Inc. (NASDAQ:BIDU) is a Chinese internet giant and AI pioneer, known for its noteworthy investments in artificial intelligence technology and its position as the dominant search engine within the country.

7. Atlassian Corporation (NASDAQ:TEAM)

Number of Hedge Fund Holders: 64

Atlassian Corporation (NASDAQ:TEAM) is one of the 10 Buzzing AI Stocks on Wall Street. On September 23, BofA Securities analyst Koji Ikeda initiates coverage on the stock with a Neutral rating and a price target of $200.00.

The analysts told investors in a research note that they are optimistic that Atlassian will be able to capture a share of the $58 billion collaboration and project management market driven by its strong roots as a centralized planning tool, broad platform, and 300,000 plus customer base.

The management is targeting 20% revenue growth through 2027, but recent moves such as end of sales support for its Data Center offering and two large acquisitions create uncertainty regarding its growth profile. The firm believes that the risk/reward is balanced until there is more clarity.

“We initiate coverage of work management vendor Atlassian (TEAM) with a Neutral rating and $200 PO. We believe Atlassian is positioned to capture share of the $58bn billion collaboration & project management market, given: (1) strong roots as a centralized planning tool; (2) broad platform; and (3) installed base of 300K+ customers. Thus, we are positive on its long-term growth and FCF generation potential. Mgmt believes it can deliver 20%+ total revenue growth though FY27, which is attractive at first glance. However, we believe two recent updates, accelerating the end of sales and support for its Data Center offering, and two large acquisitions, could make it more difficult for the company to show what its durable long-term revenue growth profile is. We think this is what matters most. And until there is more clarity, we believe the risk/reward is balanced.”

Atlassian Corporation (NASDAQ:TEAM) is a global software company that designs, develops, licenses, and maintains various software products worldwide.

6. CyberArk Software Ltd. (NASDAQ:CYBR)

Number of Hedge Fund Holders: 72

CyberArk Software Ltd. (NASDAQ:CYBR) is one of the 10 Buzzing AI Stocks on Wall Street. On September 23, Citizens JMP analyst Trevor Walsh downgraded the stock from Market Outperform to Market Perform without a price target. The firm cited the pending acquisition by PANW behind the rating downgrade.

The firm believes that there isn’t a superior proposal at this time, and that the transaction is going to close according to the noted timeline.

“We downgrade our rating to Market Perform from Market Outperform (prior $480 price target) given the pending acquisition by Palo Alto Networks. Both boards have approved Palo Alto’s offer of $45 in cash + 2.2005 PANW shares per CYBR share. CyberArk currently trades at a CY26E EV/revenue multiple of 15.9x, a premium to the mean multiple of 15.0x for our peer group. With shares currently trading modestly above our prior PT, we believe this is a fair valuation and we do not anticipate a superior unsolicited proposal at this time and believe the transaction will close in accordance with the noted timeline.”

CyberArk Software Ltd. (NASDAQ:CYBR) develops, markets, and sells software-based identity security solutions and services.

5. MongoDB, Inc. (NASDAQ:MDB)

Number of Hedge Fund Holders: 75

MongoDB, Inc. (NASDAQ:MDB) is one of the 10 Buzzing AI Stocks on Wall Street. On September 19, Citizens JMP analyst Patrick Walravens raised the price target on the stock to $375.00 (from $345.00) while maintaining a Market Outperform rating following its investor day.

The analysts noted how MongoDB has provided 3-5 year long-term financial targets with revenue growth in the “high teens.” The firm continues to like the stock as an opportunity for long-term appreciation.

“We maintain our Market Outperform rating and increase our price target to $375 from $345 on MongoDB after attending the company’s investor day at its user conference MongoDB.local NYC 2025 where the company provided long-term financial targets and where we spoke to seven customers regarding their spending plans on MongoDB in the next 12-18 months of which five said up, one said flat, and one said down, and after the stock has increased 36% year to date versus an increase of 13% year to date for the Russell 3000.”

MongoDB, Inc. (NASDAQ:MDB) provides a general-purpose database platform worldwide that integrates operational, unstructured, and AI-related data to streamline building applications.

4. Oracle Corporation (NYSE:ORCL)

Number of Hedge Fund Holders: 124

Oracle Corporation (NYSE:ORCL) is one of the 10 Buzzing AI Stocks on Wall Street. On September 23, KeyBanc analyst Jackson Ader reiterated an Overweight rating and $350.00 price target on the stock.

Analyzing Oracle’s cloud infrastructure business, the firm has estimated that the Infrastructure-as-a-Service segment currently operates at a 42.4% non-GAAP gross margin.

However, it expects margins to decline as the business transitions towards GPU and AI-driven revenue. Despite adjustments to future projections, the firm maintains an Overweight rating on the stock.

“Penciling Out OCI’s Gross Margin Impact; With the emergence of GPU-based infrastructure businesses in our large cap coverage, we have been forced to become accustomed to a lower level of gross profitability. Based on some basic assumptions about Oracle’s businesses that are not tied to the cloud or GPUs, we believe the Infrastructure-as-a-Service business is currently running at a 42.4% non-GAAP gross margin currently, and while we expect each component of Oracle’s business to see efficiencies, the mix-shift toward more AI revenue is causing us to lower our estimates in the out years. We remain OW and reiterate our price target.”

Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.

3. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 156

Apple Inc. (NASDAQ:AAPL) is one of the 10 Buzzing AI Stocks on Wall Street. On September 19, JPMorgan reiterated the stock as “Overweight” and raised its price target on the stock to $280 per share from $255. The firm cited favorable early demand for the iPhone 17 series.

“iPhone 17 series has been available to consumers for a few days now and early demand indications are outlining the opportunity for the volume cycle to not only track higher than our initial expectations (which incorporated concerns around digestion following a pull-forward in iPhone 16 series), but also upside to iPhone 16 series volumes on a y/y basis.”

Apple is a technology company known for its consumer electronics, software, and services.

2.    NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 235

NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 Buzzing AI Stocks on Wall Street. On September 23, UBS analyst Timothy Arcuri reiterated a Buy rating on the stock with a $205.00 price target. The rating affirmation follows Nvidia’s $100 billion investment in OpenAI and the signifant revenue potential that it offers.

UBS believes that the partnership has the potential to generate approximately $400 billion in revenue for Nvidia over multiple years. However, the timing will largely depend on OpenAI’s implementation plans.

The deal will also allow Nvidia to accomplish its previously outlined growth trajectory toward a $3-4 trillion total addressable market by 2030. Historically, it has managed to capture about 30-35% share.

The firm further elaborated how the partnership is helpful in reinforcing Nvidia’s dominance, demonstrates some risk for Broadcom, and is mostly negative for AMD.

“While timing will, to a large degree, depend on OpenAI’s ramp plan, we estimate this deal ultimately translates into ~$400B of NVDA revenue over a multi-year period. Given the sheer size of the numbers, it does seem likely there could be some overlap with Oracle’s capacity allocated to OpenAI, but our conversation with management suggested this is largely incremental. For NVDA, this helps to flesh out multi-year visibility to the substantial growth headroom it laid out last earnings call when it highlighted a $3-4T TAM by 2030 (of which NVDA’s share has been ~30-35%) and we believe it was OpenAI approaching NVDA for help rather than any sort of vendor financing effort on the part of NVDA. As for AVGO, this could ultimately impact the size of its ASIC revenue from OpenAI, but we have seen no signs of any weakening in what we believe to ultimately be a volume target bigger than what Google does with AVGO. Ultimately, this feels the most negative for AMD as it solidifies NVDA’s market dominance.”

NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.

1.   Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 294

Microsoft Corporation (NASDAQ:MSFT) is one of the 10 Buzzing AI Stocks on Wall Street. On September 23, the company announced that it has successfully tested a new microfluidic cooling system that can remove heat up to three times better than cold plates currently used in data centers.

Microfluidics is an approach that allows bringing the liquid coolant directly inside the silicon, where the heat is. Tiny channels are etched on the back of the silicon chip, forming grooves that allow the cooling liquid to flow over the surface and remove heat more effectively.

The team at Microsoft also leveraged artificial intelligence to map unique heat signatures on the chip so that the coolant can be directed with precision. Based on the lab-scale tests, microfluidics performed up to three times better than cold plates based on workloads and configurations involved.

Moreover, it managed to reduce the maximum temperature rise of the silicon inside a GPU by 65 percent. However, this is dependent on the type of chip, the company noted. The advanced cooling technology is anticipated to improve power usage effectiveness and reduce operational costs.

“Microfluidics would allow for more power-dense designs that will enable more features that customers care about and give better performance in a smaller amount of space.”

-Judy Priest, corporate vice president and chief technical officer of Cloud Operations and Innovation at Microsoft.

Looking ahead, the company continues to investigate how microfluidic cooling can be fused into future generations of its first-party chips. Microsoft will also continue collaborating with fabrication and silicon partners to bring microfluidics into production across its datacenters.

Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.

READ NEXT: 10 Must-Watch AI Stocks on Wall Street and 10 AI Stocks in Focus on Wall Street

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below