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.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 97
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the 10 Trending AI Stocks in Focus This Week. On July 16, Wells Fargo reiterated the stock as “Overweight” and raised its price target on the stock to $185 per share from $120.
“We think AMD will point to confidence in the trajectory to y/y AMD’s datacenter GPU growth into 2H25,”
According to analyst Aaron Rakers, this datacenter GPU growth will be driven by the build-up of MI355X chips, which began shipping last month.
The analyst also expects AMD to highlight its roadmap execution, especially for its fifth-generation Epyc processors dubbed Turin.
“We expect AMD results to highlight the company’s position as a continued share gainer in server [central processing units] with a materializing ramp of Turin Zen 5-based EPYC CPUs + continued adoption of the Zen 4-based Genoa / Bergamo EPYC CPUs. We remain confident in AMD’s strong roadmap execution,” he said, saying there should appear to be “ample room for enterprise driven growth.”
AMD is set to report its earnings in early August.
“We expect AMD to point to sustained datacenter momentum into 2H; roadmap execution and building rack-scale strategy.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 104
Tesla, Inc. (NASDAQ:TSLA) is one of the 10 Trending AI Stocks in Focus This Week. On July 16, Baird reiterated the stock as “Neutral,” stating that it’s cautious on Tesla ahead of earnings next week.
“We see risk to estimates stemming from both 1) full-year volume outlook and 2) potential margin compression in the Energy segment.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
6. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is one of the 10 Trending AI Stocks in Focus This Week. On July 16, Cantor Fitzgerald analyst Thomas Blakey raised the price target on the stock to $1,200.00 (from $1,048.00) while maintaining an “Overweight” rating.
In an investor note, the firm mentioned that it is positive on the shares heading into Q2 earnings. Partner commentary has revealed that there are “accelerating business trends” compared to the first quarter, which stands as a major factor behind the bullish rating.
Moreover, “de-risked management assumptions” in ServiceNow’s Federal business segment have also contributed to the firm’s positive view.
The research firm also pointed out that if there is an increased adoption of Pro Plus and Now Assist Consumption, it could lead to potential positive revenue revisions related to AI initiatives in 2026.
ServiceNow, Inc. (NYSE:NOW) is a technology company that offers a cloud-based software platform for automating business workflows within an enterprise.
5. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 140
Salesforce, Inc. (NYSE:CRM) is one of the 10 Trending AI Stocks in Focus This Week. On July 16, Citizens JMP analyst Patrick Walravens reiterated a “Market Outperform” rating on the stock with a $430.00 price target.
The firm came out optimistic on the stock following its chat with Richard Socher at the Citizens Technology Forum. The forum was held at the Solage Resort in Calistoga, California. Socher is not only the CEO and founder of You.com and General Partner and founder of AIX Ventures, but also a former Executive Vice President and Chief Scientist at Salesforce from 2016 to 2020.
Being an influential AI researcher, Socher’s background has been helpful in assessing Salesforce’s position in the AI landscape.
Besides Citizens JMP, other firms such as JMP Securities and Cantor Fitzgerald are also optimistic on the stock due to factors such as Informatica’s preliminary proxy statement revealing multiple potential acquirers involved in the merger process, along with the increasing adoption of Agentforce and the likelihood for increased revenue from upcoming price hikes.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 Trending AI Stocks in Focus This Week. On July 15, Mizuho analyst Vijay Rakesh raised the price target on the stock to $192.00 (from $185.00) while maintaining an “Outperform” rating. The rating affirmation follows Trump’s announcement that Nvidia may begin AI GPU shipments to China.
The firm highlighted the US administration’s announcement that Nvidia and other AI accelerator providers may resume AI GPU shipments, as part of ongoing trade negotiations. This, the firm highlighted, is a major win for the company. Previously, Nvidia had anticipated an $8 billion revenue impact in the July quarter due to shipment restrictions.
There is also an upcoming Blackwell project aimed at meeting US requirements for shipments to China in the later part of the year, which the company stands to benefit from. Owing to these policy changes, Chinese customers are already applying for licenses to receive the H20 chips, Mizuho noted. ByteDance and Tencent are two to name.
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, providing high-performance GPUs and platforms that power data centers, autonomous vehicles, robotics, and cloud services.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 Trending AI Stocks in Focus This Week. On July 16, Canaccord Genuity analyst Maria Ripps raised the price target on the stock to $850.00 (from $825.00) while maintaining a “Buy” rating.
The firm is optimistic about Meta’s second Q2 results and believes that the setup is compelling as it moves into FY26.
“We expect Meta to report solid Q2 results, with ad revenue growth remaining in the mid-teens y/y despite some modest q/q deceleration, in part reflecting tariff-driven uncertainty impacting budget deployments in the earlier part of the quarter. Growth likely remained buoyed by continued AI-driven improvements to content creation and ads recommendation models, with Meta having introduced a new generative ads recommendation model in Q1 that is twice as efficient at improving ad performance as legacy models. Looking ahead, we expect the pace of innovation to remain robust given recent AI investments, including acquiring 49% stake in Scale AI, hiring OpenAI and Apple researchers, unveiling Meta Superintelligence labs, and acquiring voice AI startup PlayAI. These investments, coupled with the technical infrastructure build out, should support Meta’s reported goal of enabling brands to fully create and target ads using AI by the end of 2026, among other initiatives. For Q2, we forecast ad revenue and total revenue to both increase ~14% y/y (vs. +16% y/y in Q1), with the modest q/q deceleration in part reflecting tariff-related uncertainty, and we expect OI of $16.7B, 37.5% margin, modestly below consensus. Given the recent investments Meta has been making in AI engineers/researchers, we do see some increased upside risk to FY25 OpEx guidance. That said, in addition to continued improvements to core monetization functions, Meta has several new tailwinds that should progressively build, including further automation of key advertiser functions, ads on WhatsApp and Threads, and a potential general release of the WhatsApp Business’ chatbot offering. While we acknowledge shares are trading near all-time highs, we continue to think the setup is compelling, particularly as we move into FY26.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 Trending AI Stocks in Focus This Week. On July 16, Cantor Fitzgerald analyst Thomas Blakey raised the price target on the stock to $581.00 (from $512.00) while maintaining an “Overweight” rating. The firm is bullish on the stock ahead of earnings on July 30.
Analysts at the firm said that Microsoft is on track for another round of robust results as it approaches its fiscal fourth-quarter earnings. The two main sources of growth for the tech giant are its artificial intelligence strength and spending on cloud computing among commercial clients.
In an investor note, the analysts highlighted how it doesn’t expect Microsoft to surprise investors like last quarter, particularly since the economy is still weak. However, momentum looks robust as identified by recent checks, which show positive signs for the near future and the second half of 2025.
“We are raising our PT to $581 (from $512), or 12.5x C26 revenue which is a premium to MSFT one-year NTM [next twelve months] average given recent acceleration in Azure and Microsoft’s positioning as a leading agentic AI platform with checks indicating positive momentum to continue in 2HC25.”
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 Trending AI Stocks in Focus This Week. Jefferies reiterated the stock as “Buy” and raised its price target on Amazon to $265 per share from $255. The firm is confident that Amazon’s revenues will stay strong and that profit margins will improve in the second quarter.
“We see resilient revs and potential margin upside in Q2.”
In other news, BofA Securities analysts removed Amazon (AMZN) from its prestigious US 1 List on the same day. The US 1 List pinpoints the firm’s top investment ideas.
Despite being removed from the list, the financial institution has confirmed that the company will maintain its “Buy” rating. The rating affirmation signifies that Amazon is still a strong contender in the market.
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 Getting Wall Street’s Attention and 10 Must-Watch AI Stocks on Wall Street.
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