Wall Street’s major hedge funds, Bridgewater Associates, Tiger Global Management and Discovery Capital, have all poured in billions in Big Tech in the second quarter to capitalize on the surge in artificial intelligence.
Bloomberg data reveals how hedge fund holdings of Microsoft grew by US$12bn to US$47bn by the end of June. The increased holdings now make it the most valuable overall position at US$46.83bn.
Another report from Reuters reveals Bridgewater Associates more than doubled its Nvidia stake, finishing the quarter with 7.23m shares worth US$1.14bn.
Hedge funds have been cutting back their exposure to industry laggards in the June quarter in a move to transition back to momentum investing. Undoubtedly, the S&P 500 is up 10% so far this year, lifted mostly by the largest tech companies.
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.
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).
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10. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 42
Arm Holdings plc (NASDAQ:ARM) is one of the 10 Trending AI Stocks in Focus This Week. On August 18, Reuters reported that Arm Holdings has hired Amazon’s artificial intelligence chip director Rami Sinno to help develop its own complete chips.
Sinno has previously developed Amazon’s homegrown AI chips called Trainium and Inferentia that build and run large AI applications. While Arm hasn’t delved into the chip-making business previously, it has been involved in designing the core architecture and instruction set for processors that it sells to customers.
The company is now looking into expansion beyond the supply of crucial chip intellectual property to developing its own complete designs. Back in July, Arm had disclosed plans to devote a percentage of its profit into building its own chips and other components. CEO Rene Haas had also hinted at the possibility of moving beyond designs and building chiplets.
Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and manufactures semiconductor technology and other related products.
9. 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 August 18, IBM and the United States Tennis Association (USTA) announced a new lineup of AI-powered digital experiences at USOpen.org and the US Open app for this year’s tournament.
The AI-powered digital experiences will allow fans to enjoy two weeks of customized, nonstop coverage. The first co-creation is Match Chat, an interactive AI assistant which will be available during and after all 254 singles matches. Match Chat, built with IBM watsonx Orchestrate technologies, responds to pre-written prompts or questions on topics such as player stats, head-to-head records, match insights and more.
Next, the IBM SlamTracker enables fans to see live Likelihood to Win probabilities for every singles match. The tool is based on AI-powered analysis of player statistics, expert opinion and match momentum, changing as the match goes on.
Fans can also enjoy AI-generated audio and subtitles in English for highlight videos with AI Commentary. Finally, Key Points built with watsonx offers three-bullet summaries of articles, tournament data and match analysis on the US Open app and website.
“As fan engagement and content consumption habits evolve, IBM and the USTA are at the cutting edge – leveraging data and AI to create unique digital experiences that bring the excitement of the US Open to life for audiences around the world. We’re applying the same powerful technologies that we use with client partners across all industries to meet the demands of tennis fans, deepening the connection to the players and game we all love.”
-Jonathan Adashek, Senior Vice President, Marketing and Communications, IBM.
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.
