Sam Altman, CEO of the artificial intelligence startup OpenAI, recently expressed his surprise at the level of trust people have in ChatGPT.
“People have a very high degree of trust in ChatGPT, which is interesting because AI hallucinates. It should be the tech that you don’t trust that much.”
-Altman on OpenAI podcast
Billions of people use ChatGPT and similar large language models (LLMs), but like Altman says, it’s not completely reliable. These models are known to “hallucinate,” or generate information that may seem credible but is not always so.
A recent article from The New York Times has shed light on the matter, stating how reasoning systems from companies like OpenAI, Google, and the Chinese start-up DeepSeek are generating more errors, instead of fewer. Math skills are improving, but the models aren’t handling facts any better, and it’s simply not clear why.
“Despite our best efforts, they will always hallucinate. That will never go away.”
-Amr Awadallah, the chief executive of Vectara, a start-up that builds A.I. tools for businesses, and a former Google executive.
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).
10. Skyworks Solutions, Inc. (NASDAQ:SWKS)
Number of Hedge Fund Holders: 31
Skyworks Solutions, Inc. (NASDAQ:SWKS) is one of the 10 Trending AI Stocks on News and Ratings. On July 2, Mizuho analyst Vijay Rakesh raised the price target on the stock to $75.00 from the previous target of $72.00, maintaining a “Neutral” rating.
According to the firm, the growing demand for artificial intelligence may drive phone memory content growth, with DRAM and SSD storage likely expanding from 12GB/512GB to 24GB/1TB configurations.
It also believes that the company may benefit from growth in the non-handset Broad Markets segment. In particular, WiFi 7 technology adoption and automotive market expansion may even help counterbalance increasing competition from Chinese manufacturers.
Skyworks (NASDAQ:SWKS) develops and manufactures semiconductor products used across industries such as aerospace, automotive, telecommunications, and consumer electronics.
9. Jabil Inc. (NYSE:JBL)
Number of Hedge Fund Holders: 55
Jabil Inc. (NYSE:JBL) is one of the 10 Trending AI Stocks on News and Ratings. On July 2, Stifel analyst Ruben Roy resumed coverage on the stock with a “Buy” rating and a price target of $245.00. The coverage resumes following Jabil’s growing exposure to artificial intelligence infrastructure.
We are resuming coverage of Jabil, Inc (JBL) with a Buy rating and $245 Target Price. While the majority of Electronic Manufacturing Services (EMS) companies have significantly outperformed YTD (+28%) vs. S&P (+4%), we believe that multiple expansion can be attributed to ongoing improvement in end-market mix, margin expansion, and increasing exposure to AI-related data center infrastructure investment. On this last trend, JBL’s Intelligent Infrastructure business has seen significant upside in recent quarters driven by AI-related revenue. With its recently reported F3Q25 financial results, JBL increased its outlook for AI-related revenue to $8.5bn, up 50% y/y, from $7.5bn previously, and up from an original forecast for 2025 that called for $5bn – $6bn. We believe that we remain in the early innings of a long-tailed AI infrastructure investment cycle, and we believe that JBL is well-positioned to benefit.”
Jabil (NYSE:JBL) delivers comprehensive manufacturing and design services, including electronics and electro-mechanical product development, prototyping, validation, and assembly.
