Chinese AI startup DeepSeek continues to draw attention in the tech world. Only recently has a senior US official alleged that DeepSeek is aiding China’s military and intelligence operations. According to a Reuters report, the firm sought to use Southeast Asian shell companies to access high-end semiconductors, which cannot be shipped to China under U.S. rules.

These conclusions have, in turn, led the US to firmly believe that DeepSeek may have overstated its abilities and relied heavily on US technology.

“We understand that DeepSeek has willingly provided and will likely continue to provide support to China’s military and intelligence operations. This effort goes above and beyond open-source access to DeepSeek’s AI models.”

-A senior State Department official told Reuters in an interview.

DeepSeek has also been alleged to have shared user information and statistics with Beijing’s surveillance apparatus. The official also stated how the AI startup may have access to “large volumes” of U.S. firm Nvidia’s H100 chips. Since 2022, these chips have been under U.S. export restrictions to keep China from advancing its military capabilities or leaping ahead in the AI race.

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. Snowflake Inc. (NYSE:SNOW)

Number of Hedge Fund Holders: 94

Snowflake Inc. (NYSE:SNOW) is one of the 10 Trending AI Stocks on Wall Street Right Now. One of the biggest analyst calls on Tuesday, June 24, was for Snowflake stock. Morgan Stanley upgraded the cloud software maker to “Overweight” from “Equal Weight” and increased its price target by $62 to $262, a 22% upside from Monday’s close.

The rating change seems justified since the stock has outperformed the broader market in 2025. Moreover, the analysts said in a research note how Snowflake has become a “better executing and faster innovating company” under its new CEO, Sridhar Ramaswamy.

“After several years of sharply decelerating growth and mounting investor concerns on its positioning for AI/ML, Snowflake’s secular growth prospects have improved under the leadership of CEO Sridhar Ramaswamy… While it is still early in AI/ML and in the application market, infusing AI-based innovation in the core coupled with a rising priority for customers to modernize their data infrastructure as a necessary step to execute on their AI initiatives has resulted into a stabilization in the core data warehousing business.”

-Analyst Sanjit Singh

Singh further stated how AI will boost growth in the core data warehousing business, with market expansion into both data engineering and AI offering a compound annual growth rate of at least 20% through 2030. Other catalysts paving the way for gains include new customer growth and an improving AI portfolio.

“We have identified large customers with potential six-figure AI workloads on Snowflake, proving out the product-market fit and making us more confident that Snowflake can hit reported targets of ~$100 million AI run rate by year end, setting up this part of the business to contribute meaningfully in FY27 and beyond.”

Snowflake Inc. (NYSE:SNOW) is a cloud-based data storage company providing a data analysis, storage, and sharing platform.

9. 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 Right Now. On June 23, Analyst Ben Reitzes from Melius Research upgraded shares of AI stock to “Buy” and raised his price target by $65 to $175. Reitzes believes AMD stock can surge 36.5%.

“Many things have changed for the better since the beginning of the year. If we are right, the stock has a lot more to go, despite missing the initial move off the bottom.”

The firm has cited growing opportunities tied to graphics processing units for 2026 to 2028, pointing to “a sustainable surge in inferencing,” which analysts believe has been much bigger of a business than initially expected.

AMD’s platform appears to be increasingly attractive for hyperscalers and sovereigns.

“We have increased conviction that investors will gain more confidence in GPU momentum over the next year, which means we could be just in the middle of a historic run in the stock.”

The firm anticipates continued growth in AMD’s artificial intelligence-related business segments, projecting that its EPS may “top $8 within 2 years.”

Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.