US stock futures sank on Thursday after AI bellwether Oracle reported lower-than-expected quarterly revenue despite thriving demand for its artificial intelligence infrastructure.
Shares plummeted more than 10% in premarket trading for the cloud computing and database software maker, dragging down other AI-related names and reigniting investor concerns about the durability of the AI trade.
Oracle has been under the radar in recent months after raising $18 billion in one of the largest tech bond sales on record and striking a $300 billion deal with OpenAI.
Coupled with the company’s moves into cloud infrastructure, investors have begun to question whether Oracle needs such extraordinary levels of debt to execute.
“Frankly, the report was not dramatically bad, but it came to confirm concerns around heavy AI spending, financed by debt, with an unknown timeline for revenue generation,” Ipek Ozkardeskaya of Swissquote said in a commentary.
Investors have been closely watching earnings of AI giants for signs of an AI bubble.
“We have mixed feelings about the scale of data center investments Oracle has planned over the coming years. If enthusiasm for AI diminishes over the long term and key customers like OpenAI reduce their computing demand, it could be difficult for Oracle to attract workloads that can substitute for AI model training and inference.”
-Morningstar analysts
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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11. UiPath Inc. (NYSE:PATH)
Number of Hedge Fund Holders: 48
UiPath Inc. (NYSE:PATH) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, RBC Capital raised its price target on the stock to $19.00 from $16.00 while maintaining a “Sector Perform” rating on the stock.
The rating affirmation follows post-Q3 FY26 investor meetings with the management, with analysts expressing confidence regarding PATH’s potential for continued stabilization in net new annual recurring revenue (NNARR) and better profitability metrics. However, execution remains critical amid the agentic AI market debate.
“The market continues to debate UiPath’s positioning in an increasingly agentic world, but if recent stable business trends can continue, the stock has the potential to move higher. Increase PT to $19 from $16 on a higher likelihood for stabilization to continue into Q4/26.”
UiPath Inc. (NYSE:PATH) is a well-known software as a service (SaaS) enterprise that develops AI-powered automation platforms to help businesses transform their operations.
10. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 66
International Business Machines Corporation (NYSE:IBM) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, Bernstein SocGen Group reiterated its Market Perform rating on the stock with a price target of $280.00.
Firm analysts remain neutral on the stock despite IBM’s acquisition announcement noting that even though it sees strategic alignment, overall view and valuation remains unchanged.
“IBM + Confluent (CFLT): A match made in heaven?”
According to Bernstein, IBM will acquire all outstanding common shares of Confluent for $31 per share in cash. This represents an enterprise value of $11 billion. The transaction is expected to close by mid-2026, and will be subject to normal regulatory and closing conditions.
“The boards of both companies have approved the deal, and Confluent’s largest shareholders, representing roughly 62% of the company’s voting power, have already signed voting agreements committing to support the transaction and oppose any alternative offers.”
International Business Machines Corporation (NYSE:IBM) is a multinational technology company and a pioneer in artificial intelligence, offering AI consulting services and a suite of AI software products.
