Since its inception, OpenAI has had many contenders. The latest one to challenge its existence has been K2 Think, a system that claims to rival the flagship reasoning models of OpenAI and DeepSeek.
This low-cost reasoning model has been developed by Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), an AI-focused research university established by the United Arab Emirates.
MBZUAI’s model, at just 32 billion parameters, is much smaller than competing systems from OpenAI and DeepSeek. Built on top of Alibaba’s open-source Qwen 2.5 model, it has been developed in partnership with G42, the UAE-based AI firm backed by tech giant Microsoft.
According to Hector Liu, director of MBZUAI’s Institute of Foundation Models, several methods were used to achieve high levels of performance for K2 Think, despite being smaller in size.
“What was special about our model is we treat it more like a system than just a model,” Liu told CNBC. “So, unlike a regular open-source model where we can just release the model, we actually deploy the model and see how we can improve the model over time.”
“If you ask me which one of the single steps is the most important, it’s very hard to say. It’s more like a system method work where all these methods combined delivered the final result,” he added.
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.
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10. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 30
C3.ai, Inc. (NYSE:AI) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, the company announced C3 AI Agentic Process Automation, a new product that leverages autonomous AI agents to handle business and operational workflows across enterprises.
The C3 AI Agentic Process Automation handles numerous types of business processes such as order-to-cash, customer service, invoice processing, debt collection, supplier onboarding, procurement, and employee onboarding, industrial operations, manufacturing operations, production planning, inventory management, and aircraft maintenance.
By replacing traditional robotic process automation tools with AI models, the C3 AI Agentic Process Automation allows enterprises to work with the reasoning capabilities of modern AI models with pre-determined steps and controls.
“C3 AI Agentic Process Automation is a breakthrough that will mark a decisive shift in the very nature of work. With our software, customers can handle key business processes from start to finish, making complex workflows efficient, reliable, and repeatable.”
-Stephen Ehikian, CEO of C3 AI.
C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company involved in building and operating enterprise-scale AI applications and accelerating digital transformation.
9. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 54
Dell Technologies Inc. (NYSE:DELL) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, Bank of America reiterated the stock as “Buy” and said it’s sticking with Dell after the company announced a transition to a new CFO on Monday.
The company announced that Chief Financial Officer Yvonne McGill will step down from her role effective September 9, 2025. David Kennedy was named as the interim CFO, effective the same date.
According to Jeff Clarke, Vice Chairman and COO, Kennedy brings 27 years of experience at Dell and “is well suited to provide immediate leadership for our finance team and the company.” His appointment comes at a time when Dell continues to expand its AI business operations.
“Our Buy rating is based on broad product portfolio, upside from AI, growth faster than the market, continuing share gains, and opportunity to grow margins over the next several years on higher mix of storage and mix shift to premium configurations in PCs and servers, which offset risks including a slow global economy, and high financial leverage.”
-BofA
Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
8. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 78
ASML Holding N.V. (NASDAQ:ASML) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, UBS analyst Francois-Xavier Bouvignies reiterated a Buy rating on the stock with a EUR750.00 price target. The firm believes that ASML is heading toward an inflection point.
Bouvignies is bullish on the chipmaker’s lithography business considering that it is the only company in the world that makes extreme ultraviolet, or EUV, lithography machines that the most advanced semiconductors require.
The analyst believes that the demand for lithography intensity, i.e. the number of exposures needed per wafer, will ramp with the upcoming production of the TSMC A14 logic node. TSMC is ASML’s largest customer of EUV machines.
“Following a year of underperformance with the stock down c20%, we see the declining lithography intensity thesis and overhang from the Chinese market as well understood by the market.”
The analyst further explains that some investors may question why buy the stock when it is primarily a 2027 story and near-term headwinds prevail, but argues that downside risks seem limited and the long-term outlook remains attractive.
“The main pushback to our call is why buy a 2027 story, when there are still near-term headwinds. With buyside expectations now between LSD% decline to flat revenue in 2026 (UBSe -3% yoy and cons +3% yoy), we see the likelihood of material downgrades as unlikely, despite potentially weak orders in coming quarters. Recent developments in memory should also protect from further downside, with UBSe expecting +24% yoy for DRAM WFE in 2026 vs a decline of -2% yoy previously. We expect the market to shift focus to 2027 post Q3 results, where we expect a directional 2026 guide. This will mark a renewal of the litho intensity story, where ASML will again start outperforming WFE with the advent of A14 and the introduction of high NA, in our view.”
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
7. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 85
Workday, Inc. (NASDAQ:WDAY) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, Needham analyst Scott Berg reiterated a Buy rating on the stock with a $300.00 price target. The rating affirmation comes ahead of Workdays’ annual Analyst Day scheduled on September 16.
The firm believes that Workday is likely going to have a lower growth profile, due to which it will raise its operating margin target from the current approximately 30% level.
Looking ahead, it believes that Workday’s long-term strategy centers around revitalizing growth through a differentiated AI approach and a rapidly expanding partner motion.
“We preview Workday’s annual Analyst Day to be held in conjunction at its upcoming Workday Rising customer conference on Tuesday, September 16. We believe the event will focus on growth expectations, with our expectation Workday is likely to lower their current 15%+ FY27 subscription revenue growth target to as low as 13% organically given the company just reported 14% 2Q subs revenue growth. We think the company is suffering from a variety of macro-driven slowdowns in ERP migrations that has hit Office of the CFO vendors across our coverage universe to different degrees. To compensate for the lower growth profile, we think Workday will raise their OM target from the current ~30%. Longer-term, we believe the company remains focused on reactivating growth through a differentiated AI strategy and a rapidly expanding partner motion.”
Workday, Inc. (NASDAQ:WDAY) provides enterprise cloud applications.
6. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 96
Micron Technology, Inc. (NASDAQ:MU) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, Stifel issued a new note on the America Semiconductors, Processors, and Components sector, noting how hyperscaler forecasts are picking up.
This is what the firm said with respect to Micron Technology:
“The market under-appreciates the significant change in composition of Micron’s datacenter revenue (majority of sales) and margins (at/approaching 50% GM), and we are more upbeat on memory pricing into yr-end.”
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.
5. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 101
Alibaba Group Holding Limited (NYSE:BABA) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, Barclays raised the firm’s price target on the stock to $190 from $145 and kept an “Overweight” rating on the shares.
According to the analysts, cloud revenue growth is anticipated to continue to accelerate from 26% year-over-year in the June quarter. It believes that instant commerce losses are set to peak in the September-end quarter.
Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally.
4. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 104
Adobe Inc. (NASDAQ:ADBE) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, Stifel analyst Parker Lane reiterated a Buy rating on the stock with a $480.00 price target.
The rating follows investor concerns regarding Adobe’s competitive moat as newer and more disruptive models leveraging generative AI are emerging.
The firm talked to five Creative Cloud customers to see how leading brands have been adapting. It believes that Adobe is ahead in AI adoption but acknowledges the fear around competition and the future state of Creative teams.
“In light of the recent pricing increases and continued headlines and investor concerns over generative AI’s role in the world of content creation, we spoke with five Creative Cloud customers to get feedback on how leading brands are navigating the evolving digital media environment. Compared to other end-markets, we believe the Creative space is further along in the adoption of generative AI tools and workflows, with all customers we spoke with leveraging Firefly, among other models and tools to some extent today. In this note we explore the various debates, positive and negative, around Adobe today. Given the depressed performance and multiple of shares relative to the 2025 outlook, we see a favorable near-term risk/reward, while acknowledging that fears around competition and the future state of Creative teams and departments remain uncertain and top of mind for investors. Maintain Buy and $480 TP.”
Adobe Inc. (NASDAQ:ADBE) is a software company that provides digital marketing and media solutions.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, KeyBanc reiterated the stock as “Overweight” stating that it remains bullish on the stock.
“From a stock perspective, we recommend positioning in stocks indexed to gen AI and/or are further through the destocking process and thus favor NVDA and AVGO.”
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $211 implies a 25.18% upside; however, the Street-high target of $389 implies an upside of 131%.
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 260
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 Hot AI Stocks to Keep on Your Radar. On September 9, Bank of America reiterated the stock as “Buy” and noted that it’s bullish heading into the Meta Connect Developer’s Conference next week. The firm holds a $900.00 price target.
The firm believes that the focus of the event this year is going to be on glasses hardware innovation and expanding AI capabilities across glasses and Meta’s apps. The company may also offer something for developers, such as new AI features across core apps, updates on Meta AI, and even Llama.
“Meta will kick off its annual Connect Developer Conf. on Sep 17, with the CEO’s keynote scheduled at 5pm. Last year’s event signaled a strategic shift from VR to mixed-reality glasses, and we expect this year’s event to focus on glasses hardware innovation and expanding AI capabilities across glasses and Meta’s apps. We expect: (1) official unveiling of Hypernova smart glasses; (2) demo Gesture-control wristband; (3) new smart glasses developer toolkit; (4) update on next-gen holographic glasses (Orion); and (5) 3rd generation Ray-Ban smart glasses with new features and capabilities. For developers, Meta may also use the event to unveil new AI features across core apps, updates on Meta AI, and Llama.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 Hot AI Stocks to Keep on Your Radar. One of the biggest analyst calls on Tuesday, September 9, was for Microsoft. Evercore ISI reiterated the stock as “Outperform” with a $625 price target, stating that investors should buy the dip.
“Regardless of the exact reason for the relative weakness over the last month, our view is that you own MSFT for the long-term compounding nature of the business, and on that front, we remain confident that the company is well positioned to monetize AI at both the infrastructure and agentic layer when looking out 3-5 years.”
Discussions with Microsoft’s investor relations team and investors have revealed no “material fundamental concerns on the horizon” coupled with Azure growth trends reinforced by ChatGPT inferencing and solid enterprise demand.
“Fundamental outlook remains strong. In speaking to investors on the road over the last few weeks and after catching up with IR, we don’t believe there are any material fundamental concerns on the horizon. Clearly, Azure expectations are more elevated after posting 39% y/y growth in F4Q (buy-side bogey still seems to have a ‘high-3 handle’), but the trends underpinning that growth – namely ChatGPT inferencing and solid enterprise demand – seem stable. Clearly, F1Q is a bit trickier on the enterprise bookings front, but we believe seeing Azure deliver mid-30% growth for FY26 appears to be a reasonable expectation. Further, with MSFT already guiding to flat op. margins for FY26, we anticipate that there is room for our/Street estimates to push higher. With shares at 31x NTM EPS vs. the S&P 500 at 22x, MSFT’s premium is below its 5-year average and we don’t see a lot of cracks in the fundamental bull narrative.”
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
While we acknowledge the potential of MSFT 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 MSFT and that has 100x upside potential, check out our report about this cheapest AI stock.
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