The US stock market is proving to be resilient despite the AI bubble warnings and labor market worries. Amid the Fed’s rate-cut cycle and the possibility of trade tensions between the US and China easing soon, market bulls are increasing their year-end targets for the S&P 500. Jim Lebenthal, a partner at Cerity Partners, said in a recent program on CNBC that we are currently in a “trend is your friend” market and investors should not go against the bullish tide.
“You look at this and you do say isn’t this already priced into the market but that sort of analysis just doesn’t matter,” Lebenthal said. “This is a trend is your friend sort of market and you see it in how much cash comes into the market on the slightest dip, whether it’s retail and money market funds, whether it’s professional money managers trying to catch up to their benchmark, it just is what it is. If you do get a China US trade deal we go higher on it, that’s just where we are, that we’ll worry about this in January, but right now the trend is your friend.”
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10. Joby Aviation Inc (NYSE:JOBY)
Number of Hedge Fund Investors: 31
Josh Brown, CEO of Ritholtz Wealth Management, in a recent program on CNBC commented on JOBY’s stock decline after the electric air-taxi maker priced a $514 million discounted share sale. Brown explained why he remains bullish on the stock and believes the capital raise was “great news.”
“The stock is actually higher than where they placed this offering at $16.85. This reminds me of Tesla. The bears used to say, “Oh, Elon’s running out of money. There’s going to be a secondary. They’re going to dilute you. They’re going to dilute you.” And then they would do a massive secondary and the stock would go up 20%. And the bears would be like, “Wait, I don’t understand what just happened.” What you have to understand with these companies that are pre-revenue in the developmental stage of their business is that the fact that they can do a secondary is the bullish part. Look how fast that stock was taken down. It’s $500 million worth of stock at a 9% discount to last night’s close. They snapped it up like it was an amuse-bouche. And that’s the bullish aspect. Look at the demand that’s there to be invested in the low altitude economy. So, I actually think it’s great news. This is not selling insiders. This is money that’s going to be used to build out the vertiports now that they’ve acquired the Blade business and to continue to build the S4 eVTOL, which is going to be what this business is all about. You need a lot of money in order to do that, and that’s where this capital raise is coming from.”
9. Dell Technologies Inc (NYSE:DELL)
Number of Hedge Fund Investors: 54
Ben Reitzes, Melius Research head of technology research, said in a recent program on CNBC that Dell is a cheap stock.
“Dell Technologies Inc (NYSE:DELL) has a role as enterprises pick up AI and need to make use of their data on-prem. Plus, Dell’s a cheap stock, and Michael’s been on this. He’s got a cheap stock, he’s buying back stock. I mean, we only went to a 15 multiple. These guys used to get a 30 multiple back in the day. There’s a shot that a lot of these hardware companies get over a market multiple or better, and the SaaS companies become the old hardware and go to single-digit multiples. I’m not kidding. I mean, that’s how much disruption there is.”
8. IBM Common Stock (NYSE:IBM)
Number of Hedge Fund Investors: 63
Ben Reitzes, Melius Research head of technology research, earlier in October talked about the impact of AI on software. The analyst pointed out to new catalysts for IBM.
“The last couple of years has been AI eating software, and it’s a complete unwinding of “software is eating the world.” You’re seeing the SaaS companies become the hardware companies, and the hardware companies become more like the SaaS companies, and the semis obviously. We’re seeing a complete value shift that is revaluing hardware. We’re in the early innings for some of the legacy tech. But IBM Common Stock (NYSE:IBM) and Dell are getting a new lease on life. IBM Common Stock (NYSE:IBM) doing a great job, probably in quantum—we’ll see that later this decade—but they’re also reinventing themselves around infrastructure software, which is not SaaS, and it’s priced by the instance.”
7. Cisco Systems Inc (NASDAQ:CSCO)
Number of Hedge Fund Investors: 81
Jim Cramer in a program earlier in October said that Cisco’s valuation is attractive and the company can benefit amid rising demand due to AI.
“Cisco right now just unveiled a chip and networking system for, of course, the data center to connect AI data centers. This is something that Broadcom has been doing quite effectively. So you might say this is a good example of what’s going on. Here’s Cisco, and we remember they were the most overvalued company in 2000. So someone’s going to say that was a different Cisco. But here, Cisco makes a much lower 16-times-earnings stock, not 400-times earnings. The other one was actually about 40 times earnings. I look at this deal and I say, okay, Cisco and Broadcom—is there enough business for both? The reason why you don’t have to worry is there’s so much business out there. Broadcom is everywhere. I think that you can own them both. My charitable trust does own them both. That’s not because we think that both of them are going to clash and therefore there’s only one winner. We’re doing it because there’s so much business to be had that I think both are buys, and Cisco’s very low multiples. I was going to say it’s much cheaper on a multiple basis than Broadcom.”
6. Advanced Micro Devices Inc (NASDAQ:AMD)
Number of Hedge Fund Investors: 113
Ben Reitzes, Melius Research’s head of technology research, said in a program earlier in October that AMD is one of the “elite” semiconductor stocks he’s recommending.
“Well, we cover AI in general, and semis are part of it. We also cover Microsoft, Oracle, and many others, including Dell, and we see a lot of opportunities to win here. In semis, we’re kind of recommending the elite three now, which are Nvidia, Broadcom, and Advanced Micro Devices Inc (NASDAQ:AMD). We think the TAM for compute and networking is $2 trillion by the end of this decade, and maybe even higher. All this inferencing, and then autonomous vehicles and robots, are really going to continue to build out the infrastructure. Sit tight.”
Macquarie Core Equity Fund stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second quarter 2025 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) designs and manufactures semiconductors, including central processing units (CPUs), graphics processing units (GPUs), and other high-performance computing solutions for various markets like gaming, data centers, and AI. The company currently maintains a small market share for GPUs used for AI applications though by 2027, we believe the company will have product on par with the market leader, NVIDIA. Hyperscale customers with deep programming expertise may increasingly decide to dual-source high-end chips leading to much larger revenue and profit gains in coming years for AMD than investors currently expect.”
5. Oracle Corp (NYSE:ORCL)
Number of Hedge Fund Investors: 124
Jim Lebenthal, chief equity strategist at Cerity Partners, said in a latest program on CNBC that The Information’s report about Oracle Corp (NYSE:ORCL) margins was “unsubstantiated” and insisted that it can be called a “rumor.”
“I believe in the name and I’ve been looking for the place at which to add it…We don’t know what this unsubstantiated rumor is, where it came from, if it’s substantiated or not.”
Asked how the report can be called a rumor, the analyst said:
“It came from a news report that supposedly they saw an internal document. It was not a release by Oracle. It’s not far different than—it’s far different than a rumor. Show me. Show me the internal document. Show me a report from Oracle. Not you in particular, but one in general. It is unsubstantiated. I mean, it’s just an unsubstantiated report.”
Mar Vista U.S. Quality Strategy stated the following regarding Oracle Corporation (NYSE:ORCL) in its third quarter 2025 investor letter:
“Oracle Corporation’s (NYSE:ORCL) stock responded positively to its FQ1 2026 (August quarter) results, which many on Wall Street have characterized as the company’s “NVIDIA moment.” Remaining Performance Obligations (RPO; like contracted bookings) increased by $317 billion sequentially, reaching approximately $455 billion. This unprecedented surge was driven by four multi-billion-dollar contracts with three large customers who support training and inference workloads for leading large language model providers.
Management outlined a multi-year revenue roadmap that calls for $144 billion in its OCI (Oracle Cloud Infrastructure) infrastructure-as-a-service (IaaS) revenue by FY 2030, a striking step-up from approximately $10 billion reported in FY 2025. The scale and duration of these contracts are unmatched in the industry, and Oracle expects additional multi-billion-dollar deals to push RPO beyond $500 billion by fiscal year-end 2026. We believe Oracle is emerging as a Tier-1 hyperscale cloud provider, now viewed as a true peer to Microsoft Azure, Google Cloud Platform, and AWS.
While IaaS revenue carries lower gross margins compared to Oracle’s core database and enterprise SaaS (software-as-a-service) businesses, the sheer scale of growth is set to drive accelerating revenue and EPS expansion over the intermediate term. We continue to hold our position in ORCL as the company gains meaningful share in the rapidly expanding generative AI market.”
4. Broadcom Inc (NASDAQ:AVGO)
Number of Hedge Fund Investors: 156
Jim Cramer said in a recent program on CNBC that Broadcom Inc (NASDAQ:AVGO) is one of the stocks he’s recommending. Cramer believes investors should “sit tight” and invest in major semiconductor stocks amid rising demand. He talked about the total addressable market for these companies and the demand boost due to AI video apps.
“Go play with Sora AI, a new social media app for generating video, and then you know how much inferencing there needs to be. That app is incredible. OpenAI is going to need a lot of compute, but it’s all about OpenAI and NVIDIA. In semis, we’re kind of recommending the elite three now, which are Nvidia, Broadcom, and AMD. We think the TAM for compute and networking is $2 trillion by the end of this decade, and maybe even higher. All this inferencing, and then autonomous vehicles and robots, are really going to continue to build out the infrastructure. Sit tight.”
Sora is a text-to-video model developed by OpenAI.
ClearBridge Dividend Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its third quarter 2025 investor letter:
“During the quarter, we benefited from our positions in Broadcom Inc. (NASDAQ:AVGO) and Oracle, both of which are major players in AI. Our experiences with these two names are emblematic of our broader approach to investing. Each was bought on its own merits, based on a positive assessment of its fundamental outlook married with a constructive underwriting of its risk/reward. We purchased them in 2020, well before AI became an investable theme. Over the years, both companies have executed well in their traditional categories and taken advantage of opportunities in AI as they have unfolded. We could not have predicted the phenomenal courses either has charted in navigating the AI wave, but by investing in great companies with talented management teams, we have profited handsomely. Both stocks surged in September on robust earnings and outlooks.”
3. UnitedHealth Group Inc (NYSE:UNH)
Number of Hedge Fund Investors: 159
Stephen Weiss, the Chief Investment Officer and Managing Partner of Short Hills Capital Partners, said in a recent program on CNBC that UnitedHealth Group Inc (NYSE:UNH) CEO Stephen Hemsley is a “ninja” and can turn the company around. However, he questioned the stock’s valuation:
“So that’s one place, but as far as service companies, I think it’s very difficult despite the move that we’re seeing in UnitedHealth again today, a huge move. And that’s really—the price target upgrade is really in response to what the stock’s done, not to what the fundamentals are, because they’ve been in the quiet period. Now, I’ll bet on Hemsley, and I am—Steve Hemsley, who’s come back, who stepped away from CEO, was chairman, now has come back to both roles. He’s a ninja. He’s going to get it right, but it doesn’t mean that the stock is attractively priced here.”
LRT Global Opportunities Strategy stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its third quarter 2025 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) stands as the premier, category-defining enterprise in the United States healthcare sector. The company has built an unparalleled competitive moat by uniquely combining a dominant health benefits platform, UnitedHealthcare, with a rapidly growing and diversified health services business, Optum. This integrated model creates a powerful, self reinforcing ecosystem that is fundamentally reshaping the delivery and management of healthcare, establishing UnitedHealth as a truly elite and durable compounding enterprise.
The foundation of the company’s strength begins with UnitedHealthcare, the nation’s largest private health insurer. Its immense scale provides significant and sustainable cost advantages, affording it superior negotiating power with healthcare providers and the ability to spread administrative costs over a massive membership base. This allows the company to offer competitive and attractive benefit plans while generating consistent, predictable cash flows. This benefits business serves as both a stable foundation and a vast data-gathering engine for the entire enterprise…” (Click here to read the full text)
2. Alphabet Inc (NASDAQ:GOOG)
Number of Hedge Fund Investors: 178
Jim Lebenthal, chief equity strategist at Cerity Partners, said in a recent program on CNBC that the market’s reaction to Apple Services VP Eddy Cue’s comments about Google search turned out to be wrong. The analyst was referring to Cue’s comments in May where he said that searches in the Safari browser fell for the first time in April.
Lebenthal was comparing the impact of Cue’s comments on Alphabet Inc (NASDAQ:GOOG) shares with that of The Information report about Oracle’s margins on the database software company’s shares.
“Now, I’m going to make a very inexact comparison, but if you go back to May, the Eddie Cue comments about Alphabet and declining search — that turned out not to be the case, at least as far as Alphabet’s then subsequent quarter report said. And all I’m thinking about this is not everybody knows. I’m certainly not impugning Eddie Cue. He said something, the stock—in this case Alphabet—moved wildly down. It turned out just not to be the case. Now, maybe Eddie Cue will be turned out to be right later on.”
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its third quarter 2025 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) was the top contributor during the quarter. The technology conglomerate’s stock price appreciated following a favorable ruling in the Google Search antitrust case and second-quarter earnings that exceeded expectations across the board. Innovations in the Google Search experience are driving both engagement and revenue benefits. Moreover, Cloud growth is accelerating thanks to robust demand for AI workloads. We continue to believe Alphabet is undervalued on a sum-of-the parts basis and see potential for the company’s AI leadership to drive further upside across the portfolio.”
1. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 235
Gene Munster, Deepwater Asset Management managing partner, recently talked about NVIDIA Corp (NASDAQ:NVDA) CEO Jensen Huang’s latest interview on CNBC and said he was encouraged by the executive’s comments about AI demand and opportunities. Answering a question about concerns related to debt and new deals in the AI space, Munster said companies are not running out of organic capital and investors still believe in the core growth story of AI.
“My sense is we’re not running out of organic capital. I think that, yes, this debt piece is something that’s new. But just to give a sense, at Deep Water, we invest in both public and private companies and invested recently in this OpenAI tender offer. That was incredibly difficult—the amount of demand outstripped the supply by probably a 2x factor. X goes and raises. I mean, nice endorsement that Jensen gave to Elon in the interview, and they’re going to be able to raise. I think that the capital is ultimately there.
One other thing that Jensen said, kind of to that point, is he mentioned that there’s going to be an incredibly large set of new companies that are going to be future giants. If that’s the case, then there’s a set of investors that believe that—and I think there are many investors who do believe that. I think they will have the capital to continue to fund this breathtaking growth.”
Nvidia owns about 90% of the GPU market, which is expected to reach $3 to $4 trillion by 2030, according to Jensen Huang. McKinsey sees data center CapEx hitting $6.7 trillion with no slowdown in sight in the short term. Nvidia’s next-generation GPU series Rubin is coming in 2026, and the company also has a software edge in AI computing with its CUDA platform, which is now the de facto standard for AI programming.
Nvidia’s Hopper Infrastructure and now Blackwell form the core of AI infrastructure for LLM training and inference. But Nvidia’s growth is slowing compared to previous quarters amid competition and capex spending limitations from major companies. In the recently reported quarter, Nvidia’s annual revenue growth came in at 56%, compared with nearly 100% YoY growth in the past.
Mar Vista U.S. Quality Premier Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its third quarter 2025 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) continues to benefit from the AI infrastructure build-out as hyperscale technology companies race toward artificial general intelligence. Demand for the company’s next-generation Blackwell platform remains strong, driven by the increasing complexity of large language models and the rise of reasoning-based applications. As CEO Jensen Huang has highlighted, reasoning tasks can require up to ten times more compute power than training a conventional large language model. With the AI market still in the early stages of a multi-year investment cycle, NVIDIA is well positioned to capture substantial value as the industry standard in accelerated computing.”
While we acknowledge the potential of NVDA 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 NVDA and that has 100x upside potential, check out our report about this cheapest AI stock.
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