Major US indexes closed lower on Friday, even after Broadcom’s quarterly results and guidance beat Wall Street estimates. The plunge reflects investors pulling back from the artificial intelligence trade despite solid results, largely due to concerns about overall lower margins and uncertainty around deal activity.
The artificial intelligence theme has been the main driver of the stock market this year, and any negative sentiment has had far-reaching consequences.
However, many firms see the pullback as a perfect buying opportunity.
We “continue to see a favorable risk/reward equation for the stock on the back of sustained AI demand.” Broadcom is seen as a “leading alternative” to AI chip leader Nvidia (NVDA).
-William Blair
Bernstein analyst Stacy Rasgon also saw Broadcom’s Q4 report as a head-scratcher.
“It seems that AI stock angst is continuing with Broadcom’s shares trading down,” Rasgon said in a report. “Frankly we aren’t sure what else one could desire as the company’s AI story continues to not only overdeliver but is doing it at an accelerating rate.”
Despite the current negative sentiment revolving around the AI trade, 2026 is supposedly going to be stronger. As per Citigroup, the year-end target for the S&P 500 for 2026, is 7,700. This target is a reflection of robust corporate earnings and sustained tailwinds stemming from AI investments.
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 Q3 2025.
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10. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 22
SoundHound AI, Inc. (NASDAQ:SOUN) is one of the 10 Trending AI Stocks on Wall Street. On December 12, Cantor Fitzgerald upgraded the stock from Neutral to Overweight and raised its price target to $15.00 from $13.00. The firm is confident on the stock, pointing to long-term growth catalysts and upcoming CES 2026 as a catalyst.
“We raise our rating on SOUN to OW (from Neutral) and raise our 12-month PT to $15 (from $13), and would take advantage of the recent pullback in shares. SoundHound AI has executed very well, in our view, cross-selling and upselling voice and conversational AI services to its installed base, as well as expanding fully automated voice volumes related to its acquisition of Amelia in late-Summer 2024.”
Cantor believes that expectations for SOUN are low heading into 2026, creating potential upside for the stock. The recent acquisitions of Interactions, along with an expanding partner ecosystem, are also drivers of organic growth for the company in C25.
Model expectations for Voice Commerce, known as the company’s Pillar Three growth initiative, remain low. However, the upcoming Consumer Electronics Show (CES) in early January 2026 is seen as a positive catalyst, with possible Voice Commerce-related announcements anticipated.
The firm views conversational AI and voice AI as “meaningful beneficiaries of secular AI growth trends.”
“We continue to view conversational AI and voice AI as meaningful beneficiaries of secular AI growth trends, with SoundHound AI a leader in this market and well-positioned to capitalize on these trends. Solid execution on recent M&A and partnership expansions, reasonable expectations headed into C26, and optionality remaining from Voice Commerce (e.g., Pillar Three) inform our rating.”
SoundHound AI, Inc. (NASDAQ:SOUN) is a voice artificial intelligence company offering voice AI solutions to businesses.
9. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 36
Rivian Automotive, Inc. (NASDAQ:RIVN) is one of the 10 Trending AI Stocks on Wall Street. On December 12, Needham raised its price target on the stock to $23.00 from $14.00 while maintaining a “Buy” rating. The price target raise follows the company’s AI & Autonomy Day, with analysts citing vertical integration and R2 launch expectations strengthening long-term conviction.
Analyst Chris Pierce sees clearer signs of progress across Rivian’s tech roadmap. He believes that the EV maker has visible catalysts in software, autonomy, and its upcoming R2 launch.
Pierce contended that RIVN’s push into software and AI was the main highlight of the AI & Autonomy Day. Since the company builds most of its tech in-house, it has been able to roll out new features quickly.
Moreover, since buyers are likely to expect better driver-assist tools, cleaner interfaces, and smarter systems overtime, this setup will allow it to position itself better than its competitors.
“The event increased our confidence in RIVN’s positioning as software (and now AI)-defined vehicles increasingly become industry table stakes, with RIVN’s vertical integration allowing for fuller control driving faster learning and feature iterations across driver interface and autonomy technology, underpinning a durable competitive advantage.”
While AI updates are crucial for the stock, the firm noted that the company’s R2 SUV is the main reason for its bullish stance. Expectations for the R2 remain low, giving Rivian a chance to beat market view when its model arrives in the first half of 2026.
“Our updated target is 20x EV/FY28E adj EBITDA, discounted back from 15x prior, with percolating R2 enthusiasm supporting multiple expansion ahead of a 1H26 launch.”
Rivian Automotive, Inc. (NASDAQ:RIVN) is an automaker that creates and manufactures electric vehicles, as well as software and services.
8. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 42
Arm Holdings plc (NASDAQ:ARM) is one of the 10 Trending AI Stocks on Wall Street. On December 12, William Blair analyst Sebastien Naji reiterated an “Outperform” rating on the stock, citing long-term growth drivers. Naji views structural tailwinds coming from v9 royalties, AI demand, and full-chip solutions.
With shares trading at a PE multiple of 68 times the firm’s calendar 2026 estimate, the firm continues to view ARM as a long-term winner in the semi space. It highlighted five specific growth catalysts for ARM.
The long-term semiconductor winner is supported by rising royalties from newer architecture, increasing data center share, AI-driven computing demand, expanded licensing, and a new product opportunity that could boost earnings.
“Stock Thoughts: Arm shares trade at a price-to-earnings multiple of 68 times our calendar 2026 estimate. We continue to see Arm as a long-term winner in the semi space, with multiple growth drivers including (1) the increase in royalty revenues with the shift to v9 and CSS, (2) share gains in the data center versus x86, (3) AI driving up global computing demand, (4) an expanded licensing opportunity as Arm shifts up the stack and builds full chip solutions, and (5) a new product opportunity that should be accretive to EPS.”
Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and manufactures semiconductor technology and other related products.
7. Zscaler Inc. (NASDAQ:ZS)
Number of Hedge Fund Holders: 50
Zscaler Inc. (NASDAQ:ZS) is one of the 10 Trending AI Stocks on Wall Street. On December 11, Freedom Capital Markets analyst Almas Almaganbetov reiterated a Buy rating on the stock with a $320.00 price target.
The affirmation reflects firm optimism driven by a strong Q1 beat, validating the company’s strategic focus and execution strength.
Zscaler delivered “robust” fiscal Q12026 results, outperforming estimates and management’s own guidance. It’s performance is a reflection of the robust demand for its platform-based cybersecurity solutions.
Freedom Capital highlighted how ZS’s revenue growth was largely driven by the expansion of Zero Trust Everywhere, an expansion of the cloud-native security platform Zero Trust Exchange. Other catalysts include “expansion of the AI security stack (including observability, AI asset management, embedded guardrails, and model testing), and enhanced data protection modules.”
Despite the top-line momentum, the firm noted some pressure on gross margins and operating expenditures due to newer products which currently carry lower margins.
“This dynamic reflects a strategic trade-off to capture market share in high-growth verticals like AI safety and expanded Zero Trust architectures. Management’s guidance for Q2 FY2026 aligns with market consensus, while the full-year FY2026 outlook has been raised to reflect the Q1 outperformance.”
Management increased its revenue and earnings forecasts through FY2026, with medium and long-term projections largely remaining unchanged.
6. monday.com Ltd. (NASDAQ:MNDY)
Number of Hedge Fund Holders: 55
monday.com Ltd. (NASDAQ:MNDY) is one of the 10 Trending AI Stocks on Wall Street. On December 10, Tigress Financial Partners analyst Ivan Feinseth raised the price target on the stock to $310.00 while maintaining a “Buy” rating. The firm is optimistic on the stock, citing MNDY as an AI-native Work OS leader boasting multi-layered growth and monetization potential.
“MNDY is increasingly positioned as an AI-native Work OS leader with one of the most attractive growth-plus-margin profiles in SaaS”
Discussing the company’s Q3 2025 results, the firm noted how MNDY demonstrated robust revenue growth, expanding margins, and rising free cash flow. Moreover, its enterprise, multi-product, and AI initiatives are driving major growth opportunities.
The company’s long-term growth is driven by “its multi-pronged strategy that supports accelerating Business Performance trends, driving increasing returns on capital, long-term Economic Profit growth, and durable shareholder value creation”, analysts said.
Moreover, its AI-Native Work OS model is poised for multi-layered growth and monetization upside as well. The company will also be investing its cash/ cash flow in new growth initiatives and has begun returning cash to shareholders via an initial share repurchase authorization.
monday.com Ltd. (NASDAQ:MNDY) develops software applications globally, offering a cloud-based Work OS for creating work management tools.
5. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 66
Accenture plc (NYSE:ACN) is one of the 10 Trending AI Stocks on Wall Street. On December 12, Stifel maintained its Buy rating on the stock with a price target of $315.00. The firm believes that the impact of artificial intelligence is being oversimplified, noting that enterprises will require third-party support to scale AI use cases.
As such, the recent slowdown in growth can be largely attributed to economic and technology uncertainty instead of fundamental shifts in the service model.
The firm further noted how historically, Accenture has been able to adapt well to technological shifts and eventually reaccelerate growth. Data points have also been encouraging in this regard, including stable pricing trends, improved reliance on service providers by AI-native companies, and federal sector stability.
The firm anticipates ACN to deliver in-line quarterly results, with a possible bias toward the higher end of guidance. Foreign exchange tailwind has also moderated to an estimated 50-70 basis points.
ACN’s earnings are scheduled for December 18th, with FY2026 EPS forecasted at $13.96.
Accenture plc (NYSE:ACN) offers strategy and consulting services.
4. Ciena Corporation (NYSE:CIEN)
Number of Hedge Fund Holders: 70
Ciena Corporation (NYSE:CIEN) is one of the 10 Trending AI Stocks on Wall Street. On December 11, Raymond James raised its price target on the stock to $250 from $120 while maintaining an “Outperform” rating. The rating affirmation follows Ciena’s fiscal fourth-quarter 2025 report.
The firm noted how CIEN raised its FY26 growth outlook to 21%-29%, up from its prior projection of 17% growth. The outlook beats concerns about a soft Q1 forecast due to Ciena’s broadening business, including expanded demand, stronger hyperscale sales, and new products.
Raymond James revealed that it had concerns regarding the company’s fiscal first-quarter 2026 forecast, which did not materialize.
Scaleacross, a new architecture enabling multiple AI training data centers to function as one unified system, is leading CIEN’s growth. With operators expanding training clusters across multiple data centers, the firm is optimistic that this year marks only the beginning.
Ciena Corporation (NYSE:CIEN) is a telecommunications hardware and software provider.
3. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 88
Adobe Inc. (NASDAQ:ADBE) is one of the 10 Trending AI Stocks on Wall Street. On December 12, Bernstein analyst Mark Moerdler reduced the price target on the stock to $506.00 from $508.00 while maintaining an “Outperform” rating. The rating affirmation follows a “solid” Q4 2025 report.
According to the firm, performance for the software maker exceeded both consensus estimates and the high end of Adobe’s own guidance. Looking ahead, it also provided first-quarter fiscal 2026 guidance slightly above consensus expectations.
The firm’s research note further noted that fiscal outlook 2026 suggests double-digit growth next year. Though the quarter doesn’t fully refute bearish views, the firm has expressed an “incrementally positive” stance on company guidance and initiatives.
The firm has therefore become more constructive on the stock, citing a rebased narrative and highlighting increased clarity in Adobe’s artificial intelligence story implementation across all customer segments.
Adobe Inc. (NASDAQ:ADBE) is a software company that provides digital marketing and media solutions.
2. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 183
Broadcom Inc. (NASDAQ:AVGO) is one of the 10 Trending AI Stocks on Wall Street. On December 12, Cantor Fitzgerald maintained its “Overweight” rating on the stock with a $525 price target. The firm has reiterated its “Top Pick” status on Broadcom based on AI infrastructure momentum and expanding silicon footprint.
The fabless chip and software maker reported a top-and-bottom-line earnings beat. Besides strong results for the October quarter, the company also provided a modest raise for January quarter guidance.
However, this was partially affected by a higher tax rate forecast for fiscal year 2026. There was also a $73 billion of AI backlog, including $53 billion in custom silicon, which is anticipated to convert to revenue over the next six quarters.
Broadcom also announced a fifth customer, bringing its total AI customer count to six, including Google, Anthropic, META, Bytedance, and OpenAI. The firm estimates AI semiconductor revenue to grow by more than 100% in calendar year 2026, leading to an earnings per share of at least $10.70.
“Broadcom offered a solid report overnight with a strong beat for the October Q and more modest raise for the January Q… mgmt disclosed $73B of AI backlog (including $53B custom silicon) to be revenue over the next 6 quarters. Broadcom also announced a 5th customer with delivery of $1B custom silicon in 4QFY26… AI Semiconductor revenue will grow by more than 100% in CY26… supporting EPS of at least $10.70 (cons $10.31)… stretch goal of $15 absolutely intact… We reiterate our Overweight rating and our $525 price target. Broadcom remains a Top Pick.”
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
1. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 243
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 Trending AI Stocks on Wall Street. On December 12, TD Cowen raised its price target on the stock to $350.00 from $335.00 while maintaining a “Buy” rating.
The price target raise is driven by the successful integration of artificial intelligence overviews within Google Search. This strengthening AI adoption supports long-term Search growth.
Analyst John Blackledge sees Google Search growing at a CAGR of 10.2% over the next five years, compared to the previous 9.6%. He attributed this increase in Google search usage and query growth to AI mode adoption.
The firm also raised its Gemini monthly average user’s estimates to 850 million at the year end of 2025. This is up from previous estimates of 600 million. It is forecast that by 2030, the Gemini app may reach nearly three billion monthly average users.
“Rising Chatbot Usage per TD Cowen Survey; Raising GOOG Search Estimates; We are raising GOOG Search estimates on our positive US survey data which indicates i) ramping Gemini chatbot usage following the launch of Gemini 3, ii) continued increases in Search engagement driven by AI Mode and AI Overviews usage, and iii) an increasing share of ChatGPT users that are also using Gemini. We raised our Search est’s by 2% on avg. annually from ’26–’31. PT to $350, maintain Buy.”
Another highlight for the stock is Alphabet’s advertising business.
“Google is the best-positioned mobile advertising company, in our view, due to its leading mobile advertising revenue position, robust capabilities, and traffic advantage relative to its peers. GOOG’s advertising offering, combined with its competitive cloud franchise, and AI tech-focused DNA, results in a digital powerhouse and yields a forecast of double-digit annual top-line growth and similar double-digit annual EBITDA growth over time.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
While we acknowledge the potential of GOOGL 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 GOOGL and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 12 Must-Watch AI Stocks on Wall Street and 12 Hot AI Stocks on Wall Street’s Radar
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