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.
9. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 77
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, Stifel reiterated its Buy rating on the stock with a price target of $114.00. The rating affirmation underscores the firm’s positive stance on MRVL, supported by its comprehensive data-center interconnect capabilities.
Analysts at Stifel highlighted Marvell’s unique end-to-end connectivity stack spanning every layer of data-center interconnect technology.
The company’s portfolio includes “VSR electrical links for chip-to-chip and board-level communication; scale-up technologies such as AECs, custom fabrics, and emerging photonic interconnects that tightly couple GPUs and XPUs within a rack; scale-out optical PAM4 DSP platforms (800G–1.6T) that connect racks and clusters across the data hall; scale-across coherent-lite solutions that link buildings within expanding AI campuses; and DCI coherent/ZR pluggables for multi-site and metro AI data-center connectivity.”
All of these offerings make Marvell one of the only vendors with a truly comprehensive connectivity stack.
“Together, this positions Marvell as one of the only vendors offering a comprehensive, vertically integrated connectivity stack for the full architecture of modern AI systems.”
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
8. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 81
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, William Blair analyst Louie DiPalma reiterated a Market Perform rating on the stock. The rating affirmation follows Palantir’s $448 million contract with the U.S. Navy to manage the supply chain of its nuclear submarine fleet.
“Yesterday, the U.S. Navy awarded Palantir a $446 million contract to provide its software to two shipbuilders and over 100 suppliers in the submarine industrial base to accelerate submarine production.”
While the Navy contract award holds the potential to become one of Palantir’s largest, even larger than Maven, the firm remains neutral on the stock amid broader valuation and growth considerations.
Over the past few years, the US Navy has taken measures to resolve bottlenecks that pushed submarine production rates to fall below its targets for both the Virginia-and Columbia class (two plus one).
These initiatives have begun to bear fruit. General Dynamics reported on its third earnings call that its maritime division reported 14% revenue growth in the third quarter after rising 22% growth in the previous quarter. Meanwhile, major Navy supplier Curtiss-Wright also improved its Navy outlook in each of the past two quarters.
“The U.S. Navy indicated that there is also the potential to expand the software beyond the submarine industrial base to other platforms. Palantir already has maritime supply chain partnerships with Hyundai Heavy Industries, Babcock, Saildrone, and Saronic.”
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems.
7. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 82
ASML Holding N.V. (NASDAQ:ASML) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, Bank of America named ASML a “Top Pick,” stating that the semis company is a “Top Idea” in 2026.
“ASML is one of our “25 stocks for 2026″ and is on our Europe 1 list of top ideas. With the stock trading on 20.6x ’27 EV/EBITDA, we expect the stock to re-rate as 2027 marks an inflection.”
On the same day, Andrew Gardiner from Citi maintained a “Buy” rating on the stock with a price target of €1,200.00. The rating affirmation comes as part of a 2026 outlook for the European semiconductor equipment group.
According to the firm, AI-driven demand is likely to bring about healthy growth for ASML along with positive estimate revision momentum.
Despite the upbeat analyst outlooks, fresh geopolitical scrutiny for the stock has emerged. A recent report from Dutch television program Nieuwsuur said that customers of ASML include at least one firm with links to the Chinese military.
The report noted that ASML had sold parts to a subsidiary of state-owned China Electronics Technology Group. The said entity is an important supplier to the Chinese army.
ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing.
6. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 108
GE Vernova Inc. (NYSE:GEV) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, RBC Capital analyst Christopher Dendrinos upgraded the stock from Sector Perform to “Outperform” with a price target of $761.00. The firm believes GE Vernova’s growth and margin tailwinds support higher valuation.
While RBC had previously downgraded the stock after underestimating growth and margin opportunity, the firm acknowledges that GEV is showing no signs of slowing down. This acknowledgement follows the company’s stronger than expected updated outlook.
GEV’s growth trajectory will drive margin expansion through multiple channels, noted the firm. In the short term, these improvements will stem from expanding equipment margins and productivity improvements. Meanwhile, additional long-term benefits may come from a growing services backlog and expansion of the electrification product portfolio
“Our updated PT of $761 (from $630) is based on a 13x 2030E EBITDA multiple (from 12.5x). Multiple expansion reflects a strong bias that estimates could continue to trend higher.”
GE Vernova Inc. (NYSE:GEV) is a global energy company and a soaring AI stock driven by the demand for energy to power artificial intelligence technology.
5. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 122
Oracle Corporation (NYSE:ORCL) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 11, Stifel analyst Brad Reback lowered the price target on the stock to $275.00 (from $350.00) while maintaining a “Buy” rating. The price target cut follows Oracle’s Q2 earnings report.
The AI bellwether reported lower quarterly revenue than expected despite booming demand for its artificial intelligence infrastructure.
Oracle reported earnings per share of $2.26, beating expectations of $1.64. Meanwhile, revenue came in at $16.06 billion, slightly below the anticipated $16.21 billion.
Looking ahead, the company called for $1.70 to $1.74 in adjusted earnings per share and 19% to 21% revenue growth for the fiscal third quarter. Analysts polled by LSEG included $1.72 in earnings per share and $16.87 billion in revenue, implying 19% growth.
Stifel noted a “lackluster print” for Oracle, with modest improvement in RPO growth of 15% quarter-over-quarter overshadowed by considerably higher than anticipated capital expenditure plans.
Meanwhile, the increase in fiscal year 2026 capital expenditure guidance by $15 billion to a total of $50 billion has raised concerns about how the company is going to fund its data center expansion.
According to the management, the company remains committed to maintaining an investment-grade credit rating and highlighted that it has various funding options.
Infrastructure as a Service (IaaS) revenue of an estimated $4.1 billion met expectations but didn’t exceed it, noted Stifel. Meanwhile, EPS, excluding the Ampere benefit, appeared to be 10-15 cents below guidance.
Despite near-term concerns, the firm believes that current capital investments are likely to support accelerating Oracle Cloud Infrastructure (OCI) growth in coming quarters. This will be supported by the company’s expanding and increasingly diverse IaaS customer base, leading to potentially improved EPS growth rates in fiscal year 2027.
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 194
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, Bernstein SocGen Group reiterated its “Outperform” rating on the stock with a $330.00 price target. The firm is positive on Taiwan Semi, with analyst noting 4Q25 revenue tracking ahead of guidance and consensus.
Bernstein’s analysis reveals that 4Q25 sales are tracking ahead of consensus and guidance. The company’s revenue for November came in at NT$343.61 billion ($11 billion), declining 6.5% from October’s NT$367.47 billion but up 24.5% year-over-year.
The combined October and November revenue totaled NT$711 billion, accounting for 71% of the company’s fourth-quarter 2025 guidance mid-point in New Taiwan dollars. This positions it in the upper end of the historical range of 65-72%.
The firm further noted that if December follows seasonal patterns, the company’s 4Q25 revenue would be 3–4% above the guidance mid-point and consensus. Meanwhile, actual foreign exchange rates has provided a 1% tailwind, analysts said.
“Actual FX likely presented 1% tailwind, but is not enough to fully explain the beat.”
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells advanced chips used in artificial intelligence applications.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, Bank of America reiterated the stock as “Buy” with a $275 price target. The firm said it’s sticking with the stock due to its leading share in AI compute/networking markets.
“Our $275 PO is based on 28x CY27E PE ex cash, within NVDA’s historical 25x-56x forward year PE range, which we believe is justified by NVDA’s leading share in fast-growing AI compute/networking markets, offset by lumpiness in global AI projects, cyclical gaming market, and concerns around access to power.”
The stock has also recently been in the spotlight following reports that US President Donald Trump has given Nvidia the green light to sell its H200 AI chips to China.
While the company was previously banned from selling advanced AI chips to China, the revised approval come with a revenue-sharing requirement and is designed to prevent China from accelerating its own chip industry.
Analysts on Wall Street currently have a consensus Buy rating on the stock. The average price target of $250 implies a 36% upside, however, the Street-high target of $432 implies an upside of 135.49%.
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 243
Alphabet Inc. (NASDAQ:GOOGL) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, Citizens reiterated its “Market Outperform” rating on the stock with a price target of $340.00. The rating affirmation reflects firm optimism in Waymo’s long-term positioning following the 1Q25 earnings call.
Boone highlighted CEO Sundar Pichai’s comments on the “optionality around personal ownership,” a sign that Alphabet understands that the power of distribution combined with leading technology can lock in “business moats”.
Licensing AV technology to auto manufacturers will allow automakers to expand supply for their ride-sharing network, strengthen distribution, and also reduce production costs through OEM partnerships.
“The benefit of licensing AV technology to auto manufacturers is that you can preference your own ride-sharing network to capture more vehicle supply as the owners of self-driving vehicles can opt into ride-sharing networks when they are not using their cars.”
The firm acknowledges that this is extremely early, and that Waymo must maintain best-in-class safety standards to avoid the same fate as other AV programs who have had accidents. The likes of Uber and GM had to close such operations after accidents that led to deaths.
“Waymo’s ability to partner and gain distribution is another first-mover advantage available to it. The other benefit of partnering with an OEM would be scaled vehicle production with sensors, which could bring down the upfront cost of vehicles for Waymo and greater production capacity as we expect it will be capacity constrained at its Arizona facility that can only produce “tens of thousands” of vehicles annually.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 332
Amazon.com, Inc. (NASDAQ:AMZN) is one of the 11 AI Stocks Analysts Are Watching Closely. On December 10, TD Cowen analyst John Blackledge reiterated a “Buy” rating on the stock with a $300 price target, calling Amazon the firm’s “Top Mega Cap Internet Pick.” The firm’s optimism reflects structural tailwinds in artificial intelligence, Ads momentum, and margin expansion.
TD Cowen noted that it sees three key drivers for Amazon shares in 2026. These include accelerating AWS revenue growth, eCommerce and advertising momentum, and continued operating margin expansion.
AWS revenue growth is anticipated to accelerate in 4Q25 and accelerate further in both ’26 and ’27. This growth is being fueled by “Core and AI workload demand and higher AI capacity amid the historic AI infrastructure build.”
Amazon’s retail and ad businesses are also likely to gain momentum. The firm believes that the retail segment should see strong growth in ’26 driven by cont’d record delivery speed (which drives purchase conversion), expansion of same day perishables biz, & investment in rural markets.
Meanwhile, it forecasts that Amazon’s 2026 advertising revenue will grow at a high teens pace year over year. This growth will be powered by sponsored products, demand-side platform momentum, and an expanding Prime Video ad business.
Lastly, the firm forecasts continued margin expansion for Amazon.
“ Continued Margin Expansion: We forecast AMZN ’26 Op Inc of $104BN, ~4% above consensus, yielding 12.8% Op Inc (GAAP) margins, as high margin Ads and AWS businesses continue ramping while eCommerce margins benefit from lower cost to serve.”
Amazon.com Inc. (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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