Is artificial intelligence guaranteed to make employees productive? Contrary to popular belief, not quite. A recent study by AI research nonprofit METR on a group of seasoned developers has revealed how artificial intelligence doesn’t always help speed up tasks.
The research involved studying a group of seasoned developers who used Cursor, a popular AI coding assistant, to help them complete tasks in familiar open-source projects.
The developers believed that using the AI tool would help them speed up by 24%. Even after completing the tasks, they were of the view that task times decreased by 20%. However, the study found that it increased task completion time by 19% instead.
The findings conclude that artificial intelligence may not always make workers more productive.
“When we watched the videos, we found that the AIs made some suggestions about their work, and the suggestions were often directionally correct, but not exactly what’s needed”.
– Joel Becker, one of the two lead authors
Nevertheless, the majority of the participants from the study, as well as its lead authors, Joel Becker and Nate Rush, continue to use Cursor for their work. They believe that using artificial intelligence makes the development work easier, like improving an essay instead of staring at a blank page.
“Developers have goals other than completing the task as soon as possible. So they’re going with this less effortful route.”
-Becker
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. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 42
Arm Holdings plc (NASDAQ:ARM) is one of 10 Trending AI Stocks on Wall Street. On July 10, Goldman Sachs analyst James Schneider initiated coverage on the stock with a “Neutral” rating and a price target of $160.00.
Goldman Sachs is optimistic that Arm will maintain its lead in the smartphone market, as well as increase its penetration in the data center segment now that hyperscalers are increasingly deploying custom ARM-based CPUs.
Another positive factor highlighted by the firm is the anticipation that ARM will leverage the v8 to v9 transition and greater adoption of Compute Subsystems (CSS) to take advantage of increased royalty rates.
However, the firm believes that both of these factors are already understood by the investors and reflected in the stock price. As such, there is limited upside for the stock.
Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and manufactures semiconductor technology and other related products.
9. GitLab Inc. (NASDAQ:GTLB)
Number of Hedge Fund Holders: 52
GitLab Inc. (NASDAQ:GTLB) is one of the 10 Trending AI Stocks on Wall Street. On July 10, BofA Securities analyst Koji Ikeda reiterated a “Buy” rating on the stock with a $72.00 price target.
The investment firm came out incrementally positive on GitLab’s long-term market potential following a meeting with CEO Bill Staples and CFO Brian Robins. The firm believes that the company’s “Duo strategy” is accurately positioned to gear up increased adoption of premium paid tiers and add-on AI products such as the Duo Pro, Duo Enterprise, and the Agent Platform.
Responding to concerns about code generation competitors likely leading to shrinking seats and technological disadvantages for GitLab, the firm noted that they are baseless and that code generation is “becoming a feature.” Moreover, GitLab’s end-to-end developer workflow efficiency remains differentiated.
The firm anticipates GitLab to uphold durable revenue growth exceeding 20% with expanding free cash flow margins over the medium term. It considers them to be “attractive investment traits.”
GitLab Inc. (NASDAQ:GTLB) develops software for the software development lifecycle in the US, Europe, and the Asia Pacific.
8. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 73
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the 10 Trending AI Stocks on Wall Street. On July 10, Goldman Sachs analyst James Schneider initiated coverage on the stock with a “Neutral” rating and a price target of $75.00.
The firm is cautious on the stock, along with AMD and Arm. Even though all three are involved in AI, the firm is of the view that they don’t offer the same upside potential right now.
“Our ratings reflect a more negative risk/reward skew on these companies’ shares from current levels, or areas where we see additional downside risk to fundamentals.”
Particularly for Marvell, the firm said that it has AI exposure, but not enough upside right now to recommend buying.
“We initiate on Marvell (MRVL) with a Neutral rating and a 12-month target price of $75. Marvell is a networking solutions provider and an industry leader in optical DSPs. The company has also seen growing traction in its custom compute franchise. We believe the company has demonstrated early success in its custom compute franchise, with deployments at Amazon and recently announced new customer wins at its Custom AI event. However, we have only moderate visibility into the shape of the company’s custom compute ramp in CY26. On the positive side, we believe that the company is on a path to recovery in its traditional Enterprise Networking and Carrier businesses. All in, we see a balanced risk/reward profile at these levels. We could be more constructive on the stock if we were to gain better visibility on the company’s ASIC ramp in 2026 and beyond.”
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
7. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 77
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the 10 Trending AI Stocks on Wall Street. On July 10, Wedbush reiterated the stock as “Outperform” and raised its price target to $160 from $140. The firm said that the bull thesis is playing out for the stock.
“We are raising our price target on Palantir to $160 from $140 as our recent checks and growing confidence in the company’s AI strategy is key to the bull thesis on Palantir playing out for the next 12 to 18 months.”
Analysts maintain that Palantir is on the “golden path to become the next Oracle” over the coming years. Even though valuation is currently expensive, they see the company as a core winner in the trillions of AI spend over the years.
“Palantir remains one of our top names to own in the “IVES AI 30″ as its game-changing AIP strategy is quickly becoming a key foundational platform for enterprises heading down the AI use case path across verticals.”
The company continues to develop new use cases for customers, which they are waiting in line to pursue, hoping to drive efficiencies through the use of AI.
The firm noted how the Street is underestimating the over $1 billion revenue stream that its Artificial Intelligence Platform, or AIP, and commercial business can evolve into.
“To this point we believe the Trump Administration clearly represents an additional tailwind for PLTR with AI initiatives within the US government including the DoD accelerating as AI remains a strategic focus on the federal front.”
-Ives and his team.
The analysts also highlighted deals made under the Trump administration, as well as the NATO deal, highlighting how the company is in a “sweet spot to benefit from a tidal wave of federal spending on AI across North America and Europe.”
Palantir is well positioned for this “new disciplined spending environment and this will ultimately be a positive growth catalyst as Karp & Co. get a bigger seat at the table globally…including across the Middle East with this AI adoption curve now front and center across the region.”
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems.
6. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 85
Workday, Inc. (NASDAQ:WDAY) is one of the 10 Trending AI Stocks on Wall Street. On July 10, Piper Sandler analyst Brent Bracelin downgraded the stock from “Neutral” to Underweight with a price target of $235.00. The rating downgrade follows major changes in CIO spending priorities driven by artificial intelligence.
“Our latest CIO survey reinforced a bullish spending backdrop for AI infrastructure while elevating risks to the broader application category,” analysts wrote.
Concerns regarding declining application software spending and potential pricing pressures were noted as factors particularly behind the downgrade for Workday.
“Per employee pricing risk coupled with eroding appetite to invest materially in applications could further pressure growth at WDAY.”
The firm believes that Workday may be a “potential AI casualty on headcount drag,” with 52% of CIOs expecting AI to reduce staff, up from 39%. Since the company’s software helps enterprises manage workforces, a “headcount drag” related to AI may prove to be negative.
Workday, Inc. (NASDAQ:WDAY) provides enterprise cloud applications.
5. 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 on Wall Street. On July 10, Goldman Sachs analyst James Schneider initiated coverage on the stock with a “Neutral” rating and a price target of $140.
The investment bank initiated the U.S. digital semiconductor and electronic design automation software group, highlighting that it is most constructive on merchant silicon and EDA vendors tied to artificial intelligence-related capital spending.
“We believe the AI investment cycle is in a state of transition, with over $350bn in CapEx spent on AI infrastructure,” he said. “Although monetization has been elusive, we see early signs of incremental revenue and much clearer evidence of cost takeout to justify these investments — and we believe AI CapEx can sustain growth from current levels.”
Particularly for AMD, the firm noted that it is a fabless provider of X86-based Server and PC CPUs, custom SoCs, and merchant GPUs. The company has been performing well and has also gained significant market share in the X86 Server CPU and PC CPU markets.
Since ARM-based solutions are gaining traction, the firm anticipates AMD’s share gains in the Server CPU market to slow down. Meanwhile, AMD’s merchant GPU solutions are likely to gain limited market share against Nvidia.
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
4. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 158
Broadcom Inc. (NASDAQ:AVGO) is one of the 10 Trending AI Stocks on Wall Street. On July 10, Goldman Sachs analyst James Schneider initiates coverage on the stock with a “Buy” rating and a price target of $315.00.
The firm initiated the U.S. digital semiconductor and electronic design automation software group.
“We believe the AI investment cycle is in a state of transition, with over $350bn in CapEx spent on AI infrastructure. Although monetization has been elusive, we see early signs of incremental revenue and much clearer evidence of cost takeout to justify these investments — and we believe AI CapEx can sustain growth from current levels.”
This is what the firm said particularly for Broadcom:
“Broadcom has a dominant franchise position across several segments of infrastructure software as a result of a long-term M&A strategy. We believe the company is likely to sustain its dominant position in enterprise networking silicon, and will continue to leverage this leadership to drive majority share in custom silicon processors for major US hyperscalers – which should drive AI to comprise over 40% of the company by 2026. At the same time, Broadcom continues to generate steady, growing profitability in its core infrastructure software business. We see the stock’s premium valuation as justified by the greater visibility provided by its sole-sourced position at key silicon accounts and the mission-critical nature of its software portfolio.”
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corporation (NASDAQ:NVDA) is one of the 10 Trending AI Stocks on Wall Street. On July 10, Goldman Sachs analyst James Schneider initiated coverage on the stock with a “Buy” rating and a price target of $185.
Schneider believes that Nvidia is the biggest beneficiary of the ongoing AI infrastructure buildout. The company’s broadening customer base is an optimistic signal, along with product leadership and rapid new releases, and an attractive valuation that has the ability to drive stock outperformance in the medium term.
“Nvidia is a fabless provider of GPU technology and related software (CUDA), and we see it as the industry standard in accelerated computing. Although stock price action has been choppy due to ‘peak concerns’ and the growing presence of custom accelerators, we believe that a combination of (1) product leadership and rapid cadence of introductions; (2) broadening of the customer base; (3) early signs of AI monetization; and (4) attractive valuation can drive outperformance versus our coverage.”
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 273
Meta Platforms, Inc. (NASDAQ:META) is one of the 10 Trending AI Stocks on Wall Street. On July 9, BofA Securities analyst Justin Post raised the price target on the stock to $765.00 (from $690.00) while keeping a “Buy” rating.
The rating affirmation followed reports that the AI giant has acquired almost 3% stake in its AI-eyewear partner EssilorLuxottica, which is the parent company of Ray-Ban and Oakley.
The investment reflects a deepening and longer-term partnership to develop smart glasses, as per the analysts. The reports further suggest that Meta may have the option to increase its stake in the eyewear company to 5% in the future.
According to the firm, Meta’s latest investment reflects a particular focus on smart glasses in Meta’s hardware and AI wearable strategy, whereas its VR goggles are likely to underperform expectations.
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 on Wall Street. On July 10, Citizens JMP analyst Andrew Boone raised the price target on the stock to $285.00 (from $250.00) while maintaining a “Market Outperform” rating.
Firm analysts are of the view that Amazon’s AWS opportunity remains underappreciated.
“With reach across 100M + U.S. households, supported by a best-in-class logistics network, and ever-widening selection, we believe Amazon’s ability to offer ever faster delivery can continue to unlock demand for additional retail categories and retail growth. This retail network fuels Amazon’s consumer data which is a key driver of its advertising business that we believe can continue to take share given Amazon’s growing CTV business. Last, and maybe most important, we believe AI is a key driver of digital transformation and that AI can help drive AWS growth to accelerate, as the AWS opportunity remains underappreciated, in our view.”
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.
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