Lauren Taylor Wolfe, co-founder of activist investment firm Impactive Capital, recently told CNBC’s Squawk Box that the surge in enthusiasm around artificial intelligence is bearing all the signs of a bubble.
“We are absolutely in an AI bubble now. It is going to burst. I don’t know when, I don’t know the order of magnitude. A lot of people are going to lose money.”
Wolfe believes that most investors betting on the surge are underestimating the risks of heightened AI-related spending by major technology companies.
“There are trillions of dollars that are being earmarked to be spent relative to hundreds of billions of dollars of free cash flow generated by the Mag 7,” she said, referring to the group of large-cap tech stocks that dominate the S&P 500. “They’re going to have to borrow to invest in all this CapEx, and we have yet to see the returns on investment.”
With tech giants spending exorbitantly higher than their profit potentials, current valuations are becoming difficult to justify, she said.
“Show me the trillions of dollars of profits that are going to be generated in the next five years,” she said. “And you just can’t. The math doesn’t work.”
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 Q2 2025.
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10. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 44
Bloom Energy Corporation (NYSE:BE) is one of the 10 Trending AI Stocks on Wall Street’s Radar. On October 20, BofA Securities analyst Dimple Gosai raised the price target on the stock to $26.00 (from $24.00) while maintaining an Underperform rating.
The raised price target follows Bloom’s new partnership with Brookfield, which the firm describes as a “blue chip counterparty” and strengthens Bloom’s position in the AI-driven power resiliency sector.
The partnership positions the company as Brookfield’s preferred onsite-power provider for grid-constrained data centers, reflecting an estimated 1.8GW at BofA’s forward pricing estimates.
“Bloom’s new Brookfield partnership adds a blue-chip counterparty and reinforces its position at the center of the AI-driven power-resiliency build-out. The up-to-$5B partnership (~1.8GW at our forward pricing) positions Bloom Energy (BE) as Brookfield’s preferred onsite-power provider for grid-constrained data centers, but it remains an early-stage memorandum—not contracted backlog. Brookfield’s prior data-center programs—$20B for 1GW in France through 2030 and $10B for 750MW in Sweden over 10–15 years—point to a long rollout horizon. We see the initial deployments as gradual, not a near-term earnings catalyst. Still, the stock’s 33% rally (+$6.6B in market cap) implies investors are already treating this as executable backlog, effectively valuing the potential Brookfield earnings stream at 33–66× EBITDA vs Bloom’s ~14× five-year average. A strategic win, yes—but the market is paying today for a decade of delivery.”
Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers.
9. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 54
Dell Technologies Inc. (NYSE:DELL) is one of the 10 Trending AI Stocks on Wall Street’s Radar. On October 22, Piper Sandler initiated the stock as “Overweight” and a $172 price target. The firm believes that Dell’s opportunities are “strong.”
According to analysts at Piper Sandler, Dell should be one of the “primary beneficiaries” of a robust enterprise data center refresh, which “looks particularly strong for 2026.”
It also pinpointed to AI infrastructure buildout and the forthcoming Windows 10 end-of-life as additional catalysts, stating that “~50% of units still need to be refreshed.” With shares “up ~3.5x since November 2022,” Dell is now viewed as an AI beneficiary, having 45% of its server business AI-related.
However, the company continues to face “a secular headwind in the shift towards cloud by enterprises” and probable market share losses in PCs.
“Positively, Dell should be one of the primary beneficiaries of upcoming enterprise datacenter refresh that looks particularly strong for 2026, AI infrastructure buildouts, and Win-10 end-of-life in which ~50% of units still need to be refreshed or remain vulnerable.”
Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
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