According to Josh Brown, Ritholtz Wealth Management CEO, the only way the S&P 500 could climb to 7,000 by year-end is through artificial intelligence.
“If we’re going to get to 7,000, it’s going to be because of the AI build out. That is the only pillar holding up the U.S. economic growth story right now.”
-Brown told CNBC
Brown’s comments were made in response to HSBC hiking its S & P 500 year-end target to 6,400 due to artificial intelligence.
It is true that even though stagflation and recession concerns remain, as evident from weak ISM services data and poor jobs report, AI names such as Palantir have been boosting the market.
“The companies that comprise all of the market cap in the S & P 100 and certainly the Nasdaq, that’s where the earnings growth is happening,” Brown said. “Everything that has to do with cloud computing and data center, it’s on fire.”
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 Q1 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. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 40
Super Micro Computer, Inc. (NASDAQ:SMCI) is one of the 10 High Flying AI Stocks This Week. On August 6, Needham analyst N. Quinn Bolton raised the price target on the stock to $60.00 (from $39.00) while maintaining a Buy rating. The rating affirmation comes despite SMCI fourth-quarter fiscal 2025 results falling short of market expectations.
The firm discussed the reason that led to the earnings miss.
“The miss was attributed to a lack of access to sufficient capital, which hindered the company’s ability to accelerate to volume production. The limited access to capital was due to the prior delay of the company’s 10-K filing, which has since been filed.”
Besides capital constraints stemming from delayed 10-K filing, specification changes from a new key customer led to revenue recognition delays.
“Additionally, a new key customer had specification changes that further delayed the recognition of revenue. In the near term, NG gross margin is expected to be under pressure due to larger deals and tariff costs.”
Regardless, the firm is still optimistic about the stock.
“However, we believe margins should improve in the upcoming quarters as the company ramps its DCBBS solutions and targets new growth markets.”
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.
9. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 41
Rivian Automotive, Inc. (NASDAQ:RIVN) is one of the 10 High Flying AI Stocks This Week. On August 6, Cantor Fitzgerald analyst Andres Sheppard reiterated a Neutral rating on the stock with a $15.00 price target.
Cantor has acknowledged that Rivian benefits from its Amazon commercial partnership, strategic joint venture with Volkswagen, and differentiated product offering including R1, EDVs, and the upcoming R2 vehicles.
The R2 line is particularly going to act as a meaningful catalyst, driving higher customer demand due to a more competitive price point.
The management is, however, discouraged by the company’s FY25 delivery guidance.
“However, while management disclosed that it expects Q3 deliveries to be its highest for the year, we remain discouraged by the company’s FY25 delivery guidance of 40,000 – 46,000 vehicles, which is lower than FY24 deliveries, and by the disappointing Gross Margin, which came way below expectations.”
The firm also discussed several factors driving their neutral stance, although it is excited about Rivian’s emphasis on autonomy in the upcoming Autonomy/AI investor day in Q4.
“Overall, we remain Neutral in the near term, driven by lower delivery expectations, worsening macro conditions, tariff uncertainty, the removal of the $7,500 EV Tax Credit, and uncertainty regarding the company’s autonomy and charging segments (which have yet to be quantified by management).”
Rivian Automotive, Inc. (NASDAQ:RIVN) is an automaker that creates and manufactures electric vehicles, as well as software and services.
8. Arista Networks Inc (NYSE:ANET)
Number of Hedge Fund Holders: 75
Arista Networks Inc (NYSE:ANET) is one of the 10 High Flying AI Stocks This Week. On August 6, KeyBanc analyst Brandon Nispel raised the price target on the stock to $145.00 (from $115.00) while maintaining an Overweight rating.
The price target raise follows Arista’s second-quarter results which exemplified strong artificial intelligence demand, flourishing opportunities from NeoClouds, and traction in the Enterprise and Campus markets.
The firm also believes that Meta and Microsoft will continue to increase their capital expenditures, and that overall hyperscale cloud capital expenditure will rise.
“We think with: 1) Meta/Microsoft capex expected to continue ramping; 2) overall Hyperscale cloud capex expected to rise >50% in ’25 and >20% in ’26; and 3) increased levels of opportunity from emerging segments, ANET appears well positioned. While the stock is expensive, we think ANET appears poised to continue to grow at midteens+ with best-in-class margins that continue to deserve a premium valuation.”
Arista Networks Inc (NYSE:ANET) develops, markets, and sells cloud networking solutions.
7. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 77
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the 10 High Flying AI Stocks This Week. On August 6, Baird analyst William Power raised the price target on the stock to $170.00 (from $100.00) while maintaining a Neutral rating.
Analysts at Baird noted Palantir’s strong Q2 results which marked the eighth consecutive quarter of accelerating total revenue growth. Revenue growth reached 48% compared to 39% in the first quarter.
The firm highlighted key growth drivers behind the growth.
” U.S. commercial and U.S. Government remain key drivers, growing 93% and 53% YOY. The company also laid out ambitious five- year aspirations for increasing revenue 10-fold while improving efficiency.”
Analysts are cautious on the stock despite of revenue acceleration and AI leadership due to valuation concerns.
“While revenue acceleration and AI leadership could continue to drive shares, we have been wary of valuation.”
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems.
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 97
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the 10 High Flying AI Stocks This Week. On August 6, Stifel analyst Ruben Roy raised the price target on the stock to $190.00 (from $161.00) while maintaining a Buy rating. The rating affirmation follows AMD’s quarterly report, particularly its above consensus Q2 revenue of $7.7B which was backed by strong EPYC and Ryzen CPU sales.
According to the firm, AMD is “a strong participant in AI compute.”
“We continue to believe that key drivers over coming quarters include MI35x/400 series scaling to more significant revenue AI revenue, continued EPYC share gains in cloud/enterprise, sovereign AI deals (e.g., HUMAIN collaboration), ROCm software enhancements, and potential MI308 China sales post-licensing. We continue to view AMD as a strong participant in AI compute. Modestly increasing estimates, target price to $190.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
Apple Inc. (NASDAQ:AAPL) is one of the 10 High Flying AI Stocks This Week. One of the biggest analyst calls on Wednesday, August 6, was for Apple. Daiwa reiterated the stock as “Outperform” and lowered its price target on the stock to $230 per share from $240 but says it’s standing by Apple.
“We see AI as being the key to future growth and are waiting for more Apple Intelligence features which will create excitement in users. Eventually, we see a multi-year phone and PC upgrade cycle and the shares as a core holding.”
Apple is a technology company known for its consumer electronics, software, and services.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 227
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 High Flying AI Stocks This Week. On August 5, DA Davidson analyst Gil Luria reiterated a Neutral rating and $180.00 price target on the stock.
According to the firm, the only way forward for Alphabet stock is a complete breakup so that investors are free to choose and invest in businesses that they actually want. This will position the businesses as competitors to Netflix, AWS/Azure, Nvidia, OpenAI, The Trade Desk , and Tesla.
“We continue to believe the only way forward for Alphabet is a complete breakup that would allow investors to own the businesses they actually want — the top competitors to NFLX, AWS/Azure, NVDA, OpenAI, TTD and TSLA. In this report we focus on the Waymo business, which we believe would be worth $16/share on its own. We remain NEUTRAL rated, but would see GOOGL as the top mega cap pick if it proceeded with a complete break-up.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 High Flying AI Stocks This Week. On August 6, Freedom Broker analyst Saken Ismailov downgraded the stock from Buy to Hold with a price target of $800.00 (from $680.00).
The firm has acknowledged how Meta has outperformed the most optimistic of expectations for key performance indicators in Q2 2025. Factors driving this impressive performance include advertising pricing recovery, heightened user engagement, and widespread adoption of AI tools.
It further pointed out Meta’s raised revenue guidance and upward revision of its full-year capEx expectations, highlighting strategic focus on building proprietary AI infrastructure.
However, stronger revenue growth isn’t the only thing these investments will be driving, the firm noted.
“While these investments are poised to drive stronger revenue growth in 2026, they also result in increased depreciation, amortization, and compensation expenses, which may temper profitability growth. Another catalyst for future revenue growth is the anticipated debut of advertising formats within WhatsApp. We maintain a positive outlook on Meta’s performance and elevate our price target from $680 to $800. Nevertheless, we’re adjusting our recommendation from “Buy” to “Hold,” as the current premium valuation multiples already encapsulate the anticipated growth rate in the company’s earnings.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 High Flying AI Stocks This Week. On August 6, DA Davidson analyst Gil Luria reiterated a Buy rating and $650.00 price target on the stock. The rating affirmation follows OpenAI’s release of its latest model, GPT-OSS.
The firm emphasized on the significance of Microsoft’s relationship with OpenAI, which is helping Microsoft drive significant gains.
“Earlier today, OpenAI released their latest model, GPT-OSS, marking the lab’s first open-source release since GPT-2 in February 2019. In conjunction with our initial thoughts on both GPT-OSS models, we remind investors about the outsized benefit Microsoft gains in having a tight commercial relationship with OpenAI.”
Azure gains, in particular, were highlighted.
“Microsoft’s partnership with OpenAI is driving significant gains throughout the business. Particularly with Azure, Microsoft’s agreement terms with OpenAI, which grants them right-of-first-refusal on either training or inference, we believe is a notable driver of the recent outperformance by Azure over its hyperscaler peers.”
The firm also talked about material acceleration of Azure OpenAI Services in the fourth fiscal quarter of 2025. This acceleration is elevating other AI services and core hyperscaler services on Azure “both of which are growing faster than comparable product sets on either GCP or AWS.”
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the 10 High Flying AI Stocks This Week. On August 6, BofA Securities analyst Justin Post reiterated a Buy rating on the stock with a $272.00 price target. The rating affirmation follows OpenAI’s announcement of new open weight models, the first models available on AWS (via Amazon Bedrock and Amazon SageMaker AI).
The firm discussed how customers will be able to use Amazon Sagemaker and Amazon Guardrails. The analysts noted that even though the new OpenAI models don’t represent OpenAI’s “leading edge” capabilities, they correspond well with Amazon’s cost savings strategy.
“Customers will be able to use Amazon Sagemaker for pre-training, evaluation, and deployment, as well as Amazon Guardrails for security features. OpenAI’s open weight models may not represent the “leading edge” models (capabilities more similar to a lightweight version of the flagship GPT-4 model), but do fit well with Amazon’s cost savings strategy, as gpt-oss-120b is suggested to be 3x more price-performant vs. Gemini, 5x more than DeepSeek-R1, and 2x vs. OpenAI’s own o4 model.”
Here is what AWS and OpenAI executives said about the strategic integration:
AWS Director of Product Atul Deo stated: “the unmatched size of our customer base marks a transformative shift in access to OpenAI’s advanced technology”, and OpenAI product lead Dmitry Pimenov stated, “Together with AWS, we’re providing powerful, flexible tools that make it easier than ever for customers to build, innovate, and scale.”
Amazon.com Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions.
While we acknowledge the potential of AMZN 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 AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 10 AI Stocks in the Spotlight Today and 10 AI Stocks Analysts Are Tracking Closely
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