Experts are ramping up their warnings that AI-fueled stock gains echo the dot-com bubble, as major tech firms boost spending while promising profits still far in the future. However, many analysts believe it’d be wrong to compare the AI boom with the dot-com bubble, and argue that we have yet to see the full potential of the AI technology.
Gene Munster, Deepwater Asset Management managing partner, said in a recent program on CNBC that while he expects a pullback in the market, he thinks AI-related spending would keep pushing stocks higher in the long term. Munster thinks there’s still 3 to 5 years left in the AI trade.
“This is a big week that since GPT made its debut in November of ’22, the NASDAQ’s up 100%. Typically, over that period, it would be up like 25%. So this conversation is most appropriate,” Munster said. “This comment that I’m going to make may fall into that category for some people: a few months ago I thought we’re in the third inning of the AI build-out, the AI trade. Now I think we’re in the second inning, and that’s based on what we’ve heard from the big capex, the big spenders, hyperscalers. I think there still is a massive amount of investment. I think that investment will lead to these valuations going higher.”
Photo by Marga Santoso on Unsplash
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
For this article, we picked 10 stocks Wall Street analysts are talking about. With each stoc,k we have mentioned its hedge fund sentiment, 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. Oklo Inc (NYSE:OKLO)
Number of Hedge Fund Investors: 36
Michael Stuart Klein, a 10% owner and independent director of the company, sold 50,000 shares of the company in two separate transactions on September 22. The total worth of these shares was about $6.7 million. OKLO is up 433% so far this year. The company also saw recent insider selling from CEO Jacob DeWitte and CFO Craig Bealmear, who sold $9.4 million of shares.
Goldman Sachs recently started covering the stock with a Neutral rating and said the company has no revenue and likely will not start earning any until 2028.
9. Crowdstrike Holdings Inc (NASDAQ:CRWD)
Number of Hedge Fund Investors: 66
Stephanie Link, Hightower Advisors’ chief investment strategist and portfolio manager, said in a recent program on CNBC that she likes CrowdStrike because of her overall bullish outlook on the cybersecurity industry. Here is why she likes the stock amid industry-wide growth catalysts:
“I think cyber security is certainly something that we’re in very early innings, something like the second or third innings, and I think a lot of it is because it’s driven by AI. AI really is not safe at this moment in time, so you need more cyber security. I think you’re going to see consolidation overall in the sector. We have 4,000 cyber security companies in the world, public and private, and I think you’re going to see massive consolidation because quite frankly companies don’t want to have 20 to 30 different vendors. Even the biggest companies like CrowdStrike and PaloAlto don’t offer a one-stop shop. They don’t have everything for their customers. So they’re going to continue to acquire their technologies. CrowdStrike trades at an expensive multiple, but they just raised guidance two weeks ago, so it’s trading at about 27 times price to sales. Again, not cheap.”
TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its second quarter 2025 investor letter:
“Among our holdings, we trimmed CrowdStrike Holdings, Inc. (NASDAQ:CRWD) as it gained 44%. A cloud-based endpoint security provider that secures a range of devices, endpoints, and cloud environments, CrowdStrike benefited early in the quarter as cybersecurity was one of the most resilient areas in an uncertain macroeconomic environment. In June, its results were higher than anticipated, especially with gains in net new annual recurring revenues, which are also expected to double in the next fiscal year. There were some lingering impacts from last year’s outage, but with the resulting customer retention rebates about to expire, we expect CrowdStrike’s revenues will continue reaccelerating.”
8. General Motors Co (NYSE:GM)
Number of Hedge Fund Investors: 71
Jon McNeill, CEO of DVx Ventures and former Tesla president, said in a recent program on CNBC that the demand for EVs may decline following the end of subsidies but rebound in the long term.
“Demand is continuing to increase around the world. When I land in Tel Aviv, I see a lot of EVs, a lot of Chinese EVs. When I land in Mexico City, I see a lot of EVs and a lot of Chinese EVs. And certainly when you land in China, you see almost every car is an EV, but same thing in Norway. And the reason for that is these cars are a lot less energy cost, a lot less maintenance cost, and they’re super fun to drive because the weight of the center of gravity is actually in the center of the vehicle for the first time.”
Asked what names he’d own, the analyst mentioned General Motors and highlighted the company’s EV business:
“GM has come from the bottom of the charts now to the top of the charts and is the number one or number two player in the US. They’ve created a company several times the size of Rivian just in a few years. And so I wouldn’t rule out the US players, especially GM either. Like the GM released the Chevy Equinox and that is right around the $30,000 price point and that has shown that there is a mass market for these. They’re introducing the Bolt EV, the Bolt 2, early next year. And that’ll be another entry into that price segment. And so I think what they’re seeing is that yeah, there’s demand at that price point for sure.”
Hotchkis & Wiley Large Cap Fundamental Value Fund stated the following regarding General Motors Company (NYSE:GM) in its Q4 2024 investor letter:
“General Motors Company (NYSE:GM) reported strong Q3 earnings results and improved free cash flow guidance. We like GM for many reasons. First, we believe GM has leading market positions in its main business segments. Second, the valuation is extremely attractive. Finally, we believe it is a strong free cash flow generator, and the management team is committed to repurchasing their undervalued shares.”
7. Palo Alto Networks Inc (NASDAQ:PANW)
Number of Hedge Fund Investors: 77
Stephanie Link, Hightower Advisors’ chief investment strategist and portfolio manager, recently talked about her bullish outlook on the cybersecurity industry and explained why she likes Palo Alto Networks.
“I think cyber security is certainly something that we’re in very early innings, something like the second or third innings, and I think a lot of it is because it’s driven by AI,” the analyst said in a program on CNBC. “AI really is not safe at this moment in time, so you need more cyber security. I think you’re going to see consolidation overall in the sector. We have 4,000 cyber security companies in the world, public and private, and I think you’re going to see massive consolidation because quite frankly companies don’t want to have 20 to 30 different vendors. Even the biggest companies like CrowdStrike and PaloAlto don’t offer a one-stop shop. They don’t have everything for their customers. So they’re going to continue to acquire their technologies. Palo Alto is cheaper at 14 times. And so, I think you can own a basket of these names.”
Sands Capital Technology Innovators Fund stated the following regarding Palo Alto Networks, Inc. (NASDAQ:PANW) in its second quarter 2025 investor letter:
“Palo Alto Networks, Inc. (NASDAQ:PANW) is a leading cybersecurity platform. It has leveraged its leading position in firewalls to build strong positions in key emerging segments such as Secure Access Service Edge (SASE), Security Information and Event Management (SIEM), and cloud security. These newer segments collectively make up its Next-Generation Security revenue which is now over $5B in annual run rate revenue with a significant growth runway. We expect cyber security will remain a top priority for customers and continued share gains will support sustainable above average revenue growth. Additionally, we expect AI will be a key factor driving cybersecurity decisions on multiple levels. The usage of AI can make adversaries more effective, can expand the attack surface, and require more advanced security. We believe Palo Alto is one of only a few companies with the necessary data and installed base to thrive in this environment.”
6. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 115
CFRA’s Garrett Nelson said in a program on Schwab Network on August 15 that he does not see “any” upside to Tesla shares amid concerns about the EV maker’s sales growth and an expected hit to its profitability. Here is what the analyst said:
“Our big concern is looking out over the next 12 months. Tesla, we thought it was refreshing that Elon Musk sort of conceded that the company is going to have a rough few quarters ahead in terms of earnings. While we think Q3 is going to be relatively strong, we’re really more concerned about Q4 and then into the first half of next year. After the federal EV tax credit expires at the end of September, I think Tesla is very susceptible to a pretty significant drop in sales. So really, that’s our big concern with the stock. Of course, there’s so much nuance with this company, lots of puts and takes, but looking out over the next 12 months, which is the basis of our price target, we just don’t see any upside for this stock, considering the headwinds—not only the expiration of the federal EV tax credit, but the regulatory credits, which have been such a big profit driver for Tesla in recent years. Essentially 100% margin on the sale of these regulatory credits—that whole system is going away as well. So that’s going to be a big hit to their profitability.”
Baron Focused Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2025 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles (EVs), solar products, and energy storage solutions, while also developing advanced real-world AI technologies. Despite ongoing macroeconomic challenges and regulatory complexities, shares climbed after Tesla completed a limited commercial rollout of its highly anticipated robotaxi business in Austin—following more than a decade of development and billions of dollars in investment. This milestone signals a potentially transformative shift in the automotive industry and opens up a sizable new market beyond the company’s core operations. Investor sentiment also improved after Elon Musk stepped back from government-related engagements, boosting confidence in Tesla’s near-term execution. Tesla introduced a refreshed Model Y globally, featuring design and performance upgrades, and outlined plans to unveil new mass-market models starting next quarter. Meanwhile, the company is progressing toward scaling production of its humanoid robot, adding another dimension to its long-term growth story.”
5. Capital One Financial Corp (NYSE:COF)
Number of Hedge Fund Investors: 132
Stephanie Link, Hightower Advisors’ chief investment strategist and portfolio manager, said in a recent program on CNBC that she bought Capital One because of the company’s “game changer” acquisition of Discover. She also believes the stock is “very cheap.” Capital One has a dividend yield of about 1%.
“I recently bought this about a month ago and I do like it as the stock is very cheap at 14 times forward estimates. But the reason I bought it is because they just closed the Discover Financial acquisition in July and I think it’s a gamecher in terms of them now having a scalable payments network, one of only two in the US. American Express is the other one and American Express trades at 20 times forward estimates. But I think the synergies will be substantial. I think the earnings power of something like $26 a share is very doable. And they have excess capital so they can return it to shareholders as well.”
Aristotle Capital Global Equity Strategy stated the following regarding Capital One Financial Corporation (NYSE:COF) in its second quarter 2025 investor letter:
“Founded in 1988 and headquartered in McLean, Virginia, Capital One Financial Corporation (NYSE:COF) is one of the largest credit card issuers in the U.S. The company was spun out of Signet Financial in 1995 under the leadership of founder and current Chairman and CEO Richard Fairbank. Over the past three decades, Capital One has evolved from a monoline credit card lender into a diversified financial services firm offering a broad range of consumer and commercial banking products.
In 2025, Capital One completed its acquisition of Discover, becoming one of the only major U.S. banks to own and operate a credit card network. This should position the company to enhance its profitability by reducing its reliance on third-party networks (i.e., Visa and Mastercard) and reduce earnings volatility as fee-based revenue increases. The deal also advances Capital One’s efforts to attract high-spend, premium-tier customers. Products like Venture X—the firm’s premium travel rewards card—stand to benefit from the integration of Discover’s transaction data with Capital One’s advanced analytics capabilities. This combination enables more personalized offers, deeper customer engagement and targeted cross-selling across lending and deposit products, reinforcing a cycle of data-driven growth…” (Click here to read the full text)
4. Broadcom Inc (NASDAQ:AVGO)
Number of Hedge Fund Investors: 156
Near the end of May, Jim Cramer said in a program on CNBC that the market was not paying attention to the potential of Broadcom. He said at the time that his trust had a “big position” in the company.
“I don’t think people focus on Broadcom enough. This is a $1.1 trillion company and no one cares. In Hock (Broadcom CEO), we trust. I care. The big position trust. And I think that people should recognize that this company has the brains of a lot of what’s in a data center. And people are just ignoring it and ignoring it and ignoring it and they shouldn’t. They’re coming out with a lot of new software. The margins are expanding and people just don’t understand that Hock Tan gets his man at all times.”
AVGO was trading around $240 as of Cramer’s comments, while the stock price is $327 as of September 30.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its second quarter 2025 investor letter:
“Shares of fellow semiconductor giant Broadcom Inc. (NASDAQ:AVGO) also outperformed during the quarter, as customer demand for the company’s custom accelerator chips remained insatiable despite the uncertain economic environment. The company is on pace for 10 consecutive quarters of AI-related semiconductor growth and expects continued strong demand persist, due to the sizable AI opportunity. In addition to its dominant market position, the company’s history of strong capital returns to shareholders results in a favorable outlook for a sizable investor base.”
3. Taiwan Semiconductor (NYSE:TSM)
Number of Hedge Fund Investors: 187
Steve Weiss, chief investment officer and founder of Short Hills Capital Partners, said in a recent program on CNBC that he trimmed his position in Taiwan Semiconductor amid certain concerns. Here is what worries the analyst about the semiconductor company:
“It’s still my largest position. It just gotten too big. I bought it early, owned it for a number of years. But the incongruity in the market today is that you see the defense stocks moving up. And why? Because we’re increasing our missile production. Part of that’s replenishment from the wars that we’ve been sending to in Ukraine and helping Israel out. But the primary reason that’s being attributed to the increase in production is potential for a conflict in China. So the incongruity here is that Taiwan semi with most of their operations in Taiwan is at ground zero for that conflict yet the stock is uptight. That continues to be a concern of mine. Now in terms of the onshoring for like Taiwan semi and and Micron they’re having their own issues because the issues are is that they when they announced these plans these multi-billion dollar plans to build here they had assumed that they’d be able to export from this country to other countries their products. Now they’re downsizing those plans because they won’t be able to cuz those will be tariffed also on an outgoing basis.”
However, Weiss said Taiwan Semi remains his largest position.
Brown Advisory Global Leaders Strategy stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its second quarter 2025 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM): Manufactures, distributes and tests integrated circuits, silicon wafers, diodes and related semiconductor components. Taiwan Semiconductor Manufacturing benefits from its leadership in leading node manufacturing which allows it to take market share and benefit from the strong demand environment for high-performance computing and AI infrastructure.”
2. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Investors: 260
Anshel Sag, Principal Analyst at Moor Insights & Strategy, recently argued during a program on CNBC that Meta’s smart glasses will help improve people’s lives by helping them look at their phones “less.” However, the analyst said these producers are not likely to generate significant revenues or profits for the company.
“This is a product that kind of paves the way for the industry, which is what Meta has done in the XR space overall. You kind of saw them do this with their VR headsets as well. But I would say that this is a fairly low volume product and is very much a thought-processing and thought-provoking product more than it will be something that will generate significant revenues or profits.”
Alger Spectra Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its second quarter 2025 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) is the world’s largest social-media company, spanning Facebook, Instagram, WhatsApp and Messenger, and its Reality Labs arm pursues next-generation augmented- and virtual-reality hardware. Its Family of Apps averaged 3.4 billion daily active users in March 2025, highlighting the unrivalled scale that underpins its advertising franchise. The company’s AI powered ad-delivery tools are driving higher pricing and better campaign performance, while new initiatives—such as the rollout of ads in WhatsApp—have the potential to unlock fresh revenue streams and are supported by a cash-rich balance-sheet that now includes a quarterly dividend. Shares rose during the quarter after fiscal first-quarter results came in better-than-expected due to strong revenue growth and operating margin expansion. Additionally, management guided fiscal second-quarter revenue above consensus and trimmed full-year expense guidance even as it lifted capital-expenditure plans to accelerate AI-infrastructure build-out.”
1. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 235
Chris Rolland from Susquehanna said during a program on CNBC last month that Nvidia’s growth will eventually slow down and hit a “wall.” However, the analyst remains bullish on the stock and praised the company’s recent quarter numbers.
“I think eventually we will hit some sort of a wall when it comes to this deceleration. I don’t know if it’s next year, but eventually we’re going to have a flat year and everyone’s going to freak out and think that the P multiple might even be too high. It’s been a meteoric rise. I’m not getting off the train just yet. There’s still a lot of growth here. Whether you’re talking about hyperscale capex, we’ve seen incredible improvement, but there’s probably still another 20 or 30% to go there over the next few years. We have sovereign ahead of us. We have China ahead of us. There’s still some opportunity here.”
Baird Chautauqua International and Global Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) reported first quarter results that were extremely solid. The company took a write-down on China-specific datacenter products and flushed out any future China contributions from their guidance, following the new export restrictions introduced in April. Demand commentary ex China was extremely encouraging—Nvidia is outgrowing expectations despite supply constraints and outgrowing competing ASIC products by a large margin. We have been underweight Nvidia relative to the benchmark, which was up 46% in the quarter, given our short-to medium-term concerns that the feverish AI datacenter build may be resulting in overcapacity, which has not come to bear.”
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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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.
