According to Wedbush analyst Dan Ives, technology stocks are going to experience notable upward momentum in the second half of 2025. Accelerating artificial intelligence and cloud investments are key factors that will be driving this powerful rally.
“In our view the Street is underestimating the underlying AI driven growth ahead and we expect a very strong 2Q tech earnings season over the coming weeks that further validates our bullish thesis led by Big Tech stalwarts,”
-Dan Ives
According to Ives, artificial intelligence is a “once in a generation 4th Industrial Revolution.” However, investors are not appreciating the “tidal wave” of growth from the $2T of spending over the next three years coming from enterprise and government spending around AI technology and use cases.
“Our bullish view is that investors are still not fully appreciating the tidal wave of growth on the horizon from the $2 trillion of spending over the next 3 years coming from enterprise and government spending around AI technology and use cases.”
Tech stocks have been facing tariffs and geopolitical storms over the past months, but that narrative is about to change.
“Looking forward its all about the use cases exploding which is driving this tech transformation being led by software and chips into the rest of 2025 and beyond and thus speaks to our tech bull and AI Revolution thesis further playing out, over the next 12 to 18 months,” said the analysts.
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.
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10. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 57
International Business Machines Corporation (NYSE:IBM) is one of the 10 Trending AI Stocks in Focus This Week. On July 16, Morgan Stanley reiterated the stock as “Equal Weight” and raised its price target on IBM to $253 per share from $233.
In a research note, the analysts noted that their firm believes that the stock is already reflecting more than just free cash flow upside. Moreover, since it is expected that there will be more mixed Software and Consulting results this quarter, the firm believes the setup into Q2 earnings leans “tactically cautious.”
“At $283, we believe FCF upside is already priced in, thus we lean tactically cautious into 2Q EPS; though 2Q is unlikely to fully break stock momentum, leaving us EW rated.”
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.
9. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 77
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the 10 Trending AI Stocks in Focus This Week. On July 16, Mizuho upgraded the stock to “Neutral” from Underperform with a price target of $135, up from $116. The firm said Palantir is well-positioned for growth. In particular, the company’s recent momentum and execution have been hailed as “stunning”, which includes material upward estimate revisions across the company’s commercial and government segments. The firm admitted that it had been underestimating these segments.
“PLTR’s recent execution and momentum is stunning, including material upward revisions across its commercial and government segments that we very much underestimated. We also believe PLTR has a legitimate chance to accelerate revenue growth for a 5th consecutive quarter when reporting 2Q results in early August.”
While company shares “could suddenly be subject to material multiple reversion at some point,” its “uniqueness demands a great deal of credit.” The firm is optimistic that Palantir is poised to benefit from long-term trends in artificial intelligence.
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