According to investment bank and financial services firm UBS, the artificial intelligence rally “remains underpinned by solid fundamentals, accelerating adoption, and a still-favorable macro environment.” This is despite of the looming concerns of a potential bubble in AI-related stocks.’
The bank pointed to recent developments in the tech world, stating how they bring in more reasons for optimism. From OpenAI and AMD’s new deal to Dell doubling its growth estimates, the deals “point to hundreds of billions in investment commitments, reinforcing the sector’s rapid capital deployment and pace of innovation.”
The firm did point out that volatility may still exist, and that investors should remain alert. Nevertheless, there are strong reasons for investors to remain engaged with the AI theme, it said.
“We anticipate global AI revenues will grow at a 41% compound annual growth rate through 2030, reaching USD 2.6 trillion.”
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. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 33
Baidu, Inc. (NASDAQ:BIDU) is one of the 10 Hot AI Stocks to Keep on Your Radar. On October 10, Macquarie upgraded the stock to “Outperform” from “Neutral” and raised the price target to $176 from $91.
The firm stated that it sees “hidden value” in the internet services company, particularly with its transition to diversified revenue streams. The company has been shifting away from its weakening search business because of increased pressure from competition with short-video and social platforms.
The company’s core advertising revenue is set to decline through late 2025, but the firm said that weakness is already priced in. That said, investors should shift their attention to newer growth drivers such as AI cloud services, robotaxis, and chips.
Baidu’s stock has surged 57% year-to-date driven by strength in its artificial intelligence (AI) cloud business and growing investor confidence in its Kunlun in-house AI chip.
The firm noted that Kunlun’s AI chips could make up for an estimated one-third of the company’s valuation as shipments ramp and China pushes for greater self-sufficiency in semiconductor production.
“We see Baidu pivoting towards more diversified revenue streams, with positive option value arising from both AI cloud and robotaxis.”
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.
9. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 113
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the 10 Hot AI Stocks to Keep on Your Radar. On October 10, TD Cowen reiterated the stock as “Buy” and raised its price target on the stock to $270 per share from $195.
The firm believes there may be more upside ahead from AMD’s partnership with OpenAI.
“Neutral into the print on AMD (Buy): This would be positive, but after the landmark deal with OpenAI sent shares up 64% on the week, and with its 11/11 analyst day coming, the beat/raise we expect is unlikely to be a major catalyst.”
A recent deal between the two will allow OpenAI to purchase billions of dollars’ worth of equipment to build out AI capabilities. In exchange, it may also take a 10% stake in AMD.
“While a formal partnership shouldn’t come as a total surprise given Sam Altman’s appearance at AMD’s AI event, and OpenAI’s insatiable demand for compute, the line of sight and magnitude was still shocking. Still obviously much to prove with the actual deployments, but we believe this should help assuage several investor concerns regarding AMD’s roadmap,”
-Analyst Joshua Buchalter
“Overall, we believe the partnership offers significant validation that AMD is meaningfully participating in the AI compute TAM along with NVIDIA.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
8. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 115
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 Hot AI Stocks to Keep on Your Radar. On October 9, TD Cowen reiterated the stock as “Buy” TD Cowen said it’s standing by shares of Tesla and raising its price target on the stock.
“We’re also Buy rated on Tesla (PT to $509 from $374)…”
The raised price target follows Tesla’s significant third-quarter delivery beat and sustained progress in autonomous vehicle and artificial intelligence development.
Analysts noted how the product goals previously outlined in the recently proposed CEO compensation package has further enhanced its confidence in the company’s long-term story.
TD Cowen has also updated its financial model, reflecting on third-quarter deliveries and recent data points. This has resulted in somewhat higher 2025 earnings per share estimates and slight upward revisions to out-year projections.
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
7. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 124
Oracle Corporation (NYSE:ORCL) is one of the 10 Hot AI Stocks to Keep on Your Radar. On October 9, Baird initiated the stock as “Outperform,” stating that the company has “has positioned itself at the center of the most significant trend in the history of computing: AI.” “
“We are initiating coverage of Oracle with an Outperform rating and $365 price target.”
Analyst Rob Oliver highlighted the company’s robust positioning as an artificial intelligence growth story.
“We view ORCL as very well positioned to benefit from the accelerating spend on AI infrastructure, and the convergence of AI, data and use-cases that will emerge from the move from training to inference.”
Even outside of AI, Oracle enjoys a strong broader ecosystem of applications, data and networking. Owing to the company’s broad set of software offerings and applications, investors get to enjoy exposure across the broader computing ecosystem.
“The combination of resources it delivers — scaled infrastructure, database, networking, and applications — creates a virtuous circle that we believe can support a premium valuation and propel shares beyond the current infrastructure scarcity trade.”
The company’s revenue shift to cloud computing may help its revenue accelerate to over 20%.
“Core drivers of SaaS Applications and Infrastructure spending should support multiple years of above-average growth. Operating margins have remained ~40-45% despite accelerated investment cycle.”
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
6. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO) is one of the 10 Hot AI Stocks to Keep on Your Radar. On October 9, Goldman Sachs reiterated the stock as “Buy.” Analyst Jim Schneider said that the stock is well positioned heading into earnings season.
“Jim continues to see AVGO as the leader in AI custom compute and merchant networking silicon.”
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
5. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 Hot AI Stocks to Keep on Your Radar. On October 9, BMO reiterated the stock as “Outperform” and raised its price target to $294 per share from $225. The firm credits the company’s strengthening leadership in its Search, Cloud, and YouTube platforms.
“GOOGL’s AI leadership continues to translate into strength in core Search and GCP [Google Cloud Platform] per expert checks, as GOOGL benefits from ongoing AI integrations and product launches, driving incremental user value.”
The firm noted that Google is “all in on AI integration into Search,” with “AI Mode scaling to 100M+ MAUs in the first 2 months.”
It further highlighted how expert checks imply Google’s new AI search features are “providing publishers with less organic/SEO traffic, leading publishers to lean further into paid ads to recoup the lost traffic/revenue,” which are “a foreseeable tailwind for GOOGL and the broader advertising industry.”
Pointing to growth in Google Cloud Platform, it said that “GCP remains well-positioned for share gains, supported by AI product integrations and ramping AI-native workloads.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
4. 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 October 9, Cantor Fitzgerald reiterated the stock as “Overweight” and raised its price target to a Wall Street high of $300 per share from $240 following management meetings.
“We hosted NVDA mgmt for investor meetings in NYC this past week, including Jensen Huang (CEO), Colette Kress (CFO), Toshiya Hari (IR), as well as other Senior Executives.”
The executives discussed details of the new partnership with OpenAI.
“The vision here is to remove margin stacking by server ODM’s and CSP’s, enabling the cost delta between NVDA and ASICs to only an average of 15% – truly a win-win for both and placing potentially further pressure on the ASIC market,” said Cantor analysts, led by C.J. Muse, in a Thursday investor note. “The company continues to work at Extreme Co-Design at an annual cadence, enabling the optimization of the entire AI Infrastructure (no one wants to buy chips only, they want to deploy AI at scale), helped by a full-stack solution including CUDA-X.”
The firm believes that Nvidia will reach an $8 earnings per share in calendar year 2026. Furthermore, it said that token demand has climbed sharply in the previous months, increasing profit per token.
“OpenAI and other platforms are now generating 50-70% gross margins, leading to every stood up GPU now sold out. Customers are searching desperately for compute wherever they can find it. More specifically, in the last 12-16 weeks we have seen an inflection – likely tied to time-based reasoning explosion coupled with multimodal inputs, led by video where context length is super long.”
The firm is also strongly convinced that the rapid, wide-scale adoption of generative AI is proof that it is not a bubble.
“In the last 12 months, recommenders have adopted Generative AI,” Muse noted. “Search has moved to Generative AI. Social Media to Generative AI. User-Generated content, Ad recommendation, everything has moved from classical machine learning to Generative AI. NVDA sees $2 Trillion in spending here from traditional compute to Generative AI alone. We are simply not in a bubble, rather the market is beginning to see how ‘quality’ AI can deliver meaningfully positive ROI’s.”
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
3. 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 October 10, Citizens analyst reiterated a Market Outperform rating on the stock with a $900.00 price target.
The firm highlighted how artificial intelligence is a significant growth driver for Meta, boosting advertiser returns and sustaining strong spending across the platform.
Analysts at the firm noted how artificial intelligence is improving every aspect of Meta’s business. They particularly highlighted the launch of Business AI, Meta’s new AI tool for businesses to help answer questions, recommend products, and even handle sales transactions.
Those who have been early adopters of Business AI are already witnessing better conversion rates and higher average order values driven by enhanced upselling capabilities.
Brands are also able to leverage valuable insights into customer behavior based on AI-driven interactions. They use these to address pre-purchase concerns.
Meta has also been updating its content recommendation models to improve recency, reflecting on the significance of AI to deliver meaningful improvements across the company’s business.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 Hot AI Stocks to Keep on Your Radar. On October 9, Morgan Stanley reiterated the stock as “Overweight,” calling it their “Top Pick in large-cap software,” and stating that its “valuation is still at a discount to peers.”
“Microsoft remains best positioned to capture incremental share of GenAI spend and IT budgets as workloads move to the cloud.”
The firm’s quarterly survey of chief information officers (CIO) further reveals how the company is in an ideal position to cash in on artificial-intelligence spending.
There were hundreds of U.S. and European CIOs polled between Aug. 5 and Sept. 9, of which 37% believe that Microsoft will claim the largest or second-largest share of additional generative AI spending in the next three years.
“Bottom line, Microsoft again remains the clearest beneficiary of GenAI spend.”
The firm also revealed from the survey that the company is likely to benefit from the migration of computing work to the cloud from on-premise servers.
Of the 100 respondents, forty-nine believe that Microsoft will gain from the largest additional share of IT budgets due to the transition to the cloud in the next three years. Twelve said Amazon while six answered Salesforce, amongst some other smaller players.
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: 335
Amazon.com, Inc. (NASDAQ:AMZN) is one of the 10 Hot AI Stocks to Keep on Your Radar. On October 9, BMO reiterated the stock as “Outperform” and said Amazon remains a top pick.
“3Q25E checks continue to support 2H25E AWS growth acceleration, although ramping competition and capacity constraints likely limit incremental upside.”
Amazon.com Inc. (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 Every Investor Should Watch and 10 Buzzing AI Stocks on Wall Street.
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