The US has recently reversed its ban that restricted Nvidia from exporting its H20 chips to China, paving the way for China to move forward in the realm of artificial intelligence. However, China is now aiming to develop its own ecosystem in order to reduce its reliance on foreign technology.
As reported by Reuters, China’s artificial intelligence companies have announced two new industry alliances, coinciding with the three-day World Artificial Intelligence Conference in Shanghai. Several new products were also showcased at the conference, including an AI computing system from Huawei, as well as consumer-friendly products such as digital AI glasses.
The purpose of the “Model-Chip Ecosystem Innovation Alliance” is to integrate Chinese developers of large language models (LLMs) and AI chip manufacturers.
“This is an innovative ecosystem that connects the complete technology chain from chips to models to infrastructure.”
-Zhao Lidong, CEO of Enflame, one of the participating chipmakers.
Meanwhile, the second alliance, which is the Shanghai General Chamber of Commerce AI Committee, aims to “promote the deep integration of AI technology and industrial transformation.”
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).
Phone with stocks chart
10. Pegasystems Inc. (NASDAQ:PEGA)
Number of Hedge Fund Holders: 34
Pegasystems Inc. (NASDAQ:PEGA) is one of the 10 Trending AI Stocks on Wall Street. On July 24, Barclays raised the firm’s price target on the stock to $58 from $50 and kept an “Equal Weight” rating on the shares.
The firm described Pega’s recent quarter as “another quarter of above-consensus growth.” Pega reported a remarkable revenue growth of 9.5% and maintained a strong gross margin of 75.5%, marking the second consecutive quarter of above-consensus performance.
The firm quoted that Q2 was “almost better compared to Q1 when looking at the quality of the beat.” Moreover, it believes that it is getting clear that the genAI Blueprint offering is “starting to work well as a demand generation tool.” Nevertheless, the rating is kept at Equal Weight as the firm looks more into the ultimate total addressable market and also at Appian’s lawsuit.
Pegasystems Inc. (NASDAQ:PEGA) develops, markets, licenses, hosts, and supports enterprise software.
9. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 45
Hewlett-Packard Enterprise Company (NYSE:HPE) is one of the 10 Trending AI Stocks on Wall Street. On July 23, Deutsche Bank analyst Matt Niknam raised the firm’s price target on the stock to $26 from $21 and kept a “Buy” rating on the shares.
The firm is positive on the stock following the Juniper deal, reflecting on the anticipated benefits. According to Niknam, the stock’s current valuation offers a promising risk/reward balance for investors.
Hewlett Packard Enterprise Company (NYSE:HPE), an American multinational technology company, provides high-performance computing systems, AI software, and data storage solutions for running complex AI workloads.
8. Reddit, Inc. (NYSE:RDDT)
Number of Hedge Fund Holders: 72
Reddit, Inc. (NYSE:RDDT) is one of the 10 Trending AI Stocks on Wall Street. On July 23, Needham analyst Laura Martin raised the price target on the stock to $165.00 from $145.00, while maintaining a “Buy” rating.
The rating affirmation follows Reddit’s first quarter 2025 results, which exceeded consensus expectations. The firm’s channel checks reveal continued strength going into the second quarter of 2025.
In particular, the company has been benefiting from strong daily active user trends, growing ad monetization backed by direct-response advertisements, and an inclination toward full-funnel advertisers.
Reddit Search and Reddit Answers, new products by Reddit, are anticipated to enhance content discovery and increase user engagement times.
Reddit, Inc. (NYSE:RDDT) is a social media platform that leverages AI to strengthen search functionality and improve user engagement.
7. 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 23, Erste Group upgraded the stock rating from Hold to “Buy,” citing AMD’s growth outlook for 2025.
The firm particularly highlighted the accelerating demand for high-performance CPUs and GPUs in data center environments.
Moreover, Erste Group believes that AMD will increase its operating margin in the medium term, allowing it to accelerate its profit growth. Its stock price is also likely to rise based on its growth prospects in these markets.
AMD has an ever-expanding presence in the data center segment, competing fiercely than most of its competitors.
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
6. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 80
ASML Holding N.V. (NASDAQ:ASML) is one of the 10 Trending AI Stocks on Wall Street. On July 23, Erste Group analyst Hans Engel downgraded the stock from Buy to Hold due to uncertainty revolving around its revenue growth prospects for 2026.
ASML’s revenue and profit growth are both expected to be lower than in 2025. The firm believes that ASML maintains “a monopoly position in state-of-the-art lithography systems,” particularly highlighting the company’s leading market position in advanced chipmaking equipment.
As per the research note, ASML’s third quarter guidance for total net sales is between EUR 7.4 billion and EUR 7.9 billion. The firm added that it also anticipates a slightly lower gross margin of 50% to 52% in the third quarter in comparison to the previous quarter.
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
Apple Inc. (NASDAQ:AAPL) is one of the 10 Trending AI Stocks on Wall Street. On July 28, Bank of America maintained a “Buy” rating on the stock with a price target of $235. The firm believes that Apple faces a tough setup as it heads into its third fiscal quarter results due on July 31st. Investors continue to watch closely for margin pressures from tariffs and ongoing regulatory concerns.
“We see client sentiment as fairly negative given uncertain impact from tariffs, U.S. DOJ investigation (Google (NASDAQ:GOOGL) TAC payments), App Store headwinds, and slow progress in AI.”
-BofA analysts wrote in a note.
The firm believes that gross margins (GM) are going to be the highlight of the earnings report, with the June quarter guide of 46% at the mid-point, which includes the “impact of $900mn of tariff-related costs.”
It models the September quarter period as the “trough,” anticipating gross margins to improve on the back of a “better mix of higher ASP products, including the slim iPhone (‘Air’), which we expect Apple to launch this fall.”
While margin concerns exist, the firm anticipates in-line results for the current quarter and also potentially a slight revenue beat. Upcoming product cycles may also prove to be good for the company, as “iPhone form factor changes have helped drive higher replacement rates in the past.”
Apple is a technology company known for its consumer electronics, software, and services.
4. 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 25, JPMorgan reiterated the stock as “Overweight,” stating that the stock remains a top pick in AI networking.
“Overall, we believe Broadcom, NVIDIA, Astera Labs, and Marvell are all expected to benefit from the incremental SAM [segment anything model] opportunity in scale-up networking. The strong growth in the scale-up network should represent a strong revenue tailwind over the coming years.”
Analysts on Wall Street currently have a consensus “Buy” rating on the stock. The average price target of $185 implies a 6.63% upside, however, the Street-high target of $250 implies an upside of 44%.
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. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 227
Alphabet Inc. (NASDAQ:GOOGL) is one of the 10 Trending AI Stocks on Wall Street. On July 24, DA Davidson analyst Gil Luria raised the price target on the stock to $180 from $160 and kept a “Neutral” rating on the shares.
According to the analysts, Alphabet’s Q2 earnings were better than expected, with an acceleration in revenue across the board. The firm highlighted how Alphabet’s management is continuously highlighting the positive impact of their “full-stack AI approach.” This approach is helping in adoption across the company’s various business lines.
The company’s Search business has witnessed double-digit growth, reflecting on the strong quarter that it has had. Google Cloud has also been accelerating, which have further contributed to the positive results.
However, the firm continues to believe that breaking up the business would allow investors to own the components that they desire. It would also help them unlock additional shareholder value currently not reflected in the entity that is currently combined.
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the 10 Trending AI Stocks on Wall Street. On July 25, Wedbush reiterated the stock as “Outperform” with a $600 price target. The firm said it is bullish on the stock heading into Microsoft earnings on July 30, anticipating robust Q4 results.
“We are expecting more good news next week from Redmond as we believe Nadella & Co. will deliver another robust quarter on Wednesday after the bell driven by the AI Revolution with all the Street and tech world watching closely.”
Analysts are optimistic that Microsoft is on its path to $4T market cap and then $5 trillion over the next 18 months. Deal conversions for broader enterprise-scale AI deployments have been “accelerating” in the field, backed by the AI Revolution. Moreover, many Microsoft customers are now focused on deploying enterprise use cases across several verticals.
“We strongly view this as Microsoft’s “shining moment” with AI set to change the cloud growth trajectory in Redmond.”
The stock is yet to price in the next wave of cloud and AI growth coming to the Redmond story with a robust, competitive cloud edge.
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 on Wall Street. On July 28, UBS analyst Stephen Ju raised the price target on the stock to $271.00 (from $249.00) while maintaining a Buy rating. The price target increase reflects UBS’s decision to roll back some of the decreases in estimates it had made three months ago when it was expecting increased demand destruction from tariffs.
The firm has raised its Gross Merchandise Value (GMV) estimates for 2026 by an estimated 2%, along with a 2% increase in gross profit projections. Moreover, it has also raised its 2026 and 2027 advertising segment forecasts by an estimated 3% due to better-than-expected advertising performance. Meanwhile, AWS growth estimates were maintained at 16% for the second quarter of 2025.
Based on the revisions, there is a 1% increase in 2026 revenue estimates and a 5% increase in EBIT (Earnings Before Interest and Taxes) projections. For the year 2027, the firm projects a 0.1% revenue increase and a 7% EBIT increase.
The firm also raised its 2025 CapEx forecast to $112 billion from the previous $107 billion after the company disclosed its first-quarter 2025 capital expenditures.
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.
READ NEXT: 10 AI Stocks on Wall Street’s Radar and 10 AI Stocks Analysts Are Tracking Closely
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
Hedge Fund Resource Center