According to Wells Fargo’s senior equity analyst Aaron Rakers, the semiconductor industry is poised to grow to one trillion dollars in revenue in 2026. This is up 29% year-on-year, followed by another year of double-digit expansion in 2027.
“I think we’re still seeing that we’re moving from a heavy AI training investment cycle to inferencing starting to proliferate, and that’s carrying the chip sector,” said Rakers, in an interview with CNBC TV.
In the CNBC interview, Rakers pointed to strong quarterly results from TSM, an evidence of broad-based strength across AI chips. This has reinforced the firm’s bullish outlook on several notable names such as AMD, Nvidia, and Broadcom.
The evolving demand mix is helping extend the AI-driven upcyle as inferencing workloads are increasingly driving chip utilization across sectors.
On Nvidia and Broadcom, the firm noted how it wants to be involved with both these names. Broadcom is diversifying its custom AI base of business, and Nvidia is anticipated to have a good print this next cycle.
“We think that they are playing a different ballgame. This notion of extreme co-design up and down the stack makes them a clear, differentiated platform provider, so we continue to like that name as well.”
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. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 42
HP Inc. (NYSE:HPQ) is one of the 11 AI Stocks Analysts Are Watching Closely. On January 15, Barclays downgraded the stock to “Underweight” from Equal Weight, stating that it sees too many “secular challenges” across both HP’s PC and printing businesses.” The firm has reduced its price target to $18.00 from $24.00.
“While we see the stock as inexpensive, we believe secular challenges across both PCs and Printing, combined with a lack of catalyst, will cause the stock to remain pressured in 2026. Additionally, we expect the current memory cycle to pressure HPQ’s PC business (~30% of Personal Systems is Consumer) with further downside potential in the year.”
The firm highlighted the current memory cycle as a factor anticipated to pressure HP’s PC business. They noted that an estimated 30% of the company’s Personal Systems segment is consumer-focused, which may face further downside potential this year.
Analysts on Wall Street have a consensus “Buy” rating on the stock. The average price target of $25 implies a 22.73% upside; however, the Street-high target of $30 implies an upside of 47.28%.
HP Inc. (NYSE:HPQ) is a technology company that specializes in personal computing and printing solutions.
10. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 51
Dell Technologies Inc. (NYSE:DELL) is one of the 11 AI Stocks Analysts Are Watching Closely. On January 15, Barclays upgraded the stock to “Overweight” from Equal Weight with an unchanged price target of $148. Firm analysts see DELL poised for upside, driven by AI server momentum, enterprise recovery, and disciplined operating expenses.
Dell holds robust strength in AI server orders, with analysts growing more comfortable with the margin profile of its AI server business. While gross margins remain pressured, operating margins have been resilient.
“We are more positive on DELL given the strength in AI server orders, stability of AI op margins, expanding opportunities in enterprise server and storage, and DELL’s consistent disciplined opex management. We are encouraged by what we are seeing now and upgrading the name to OW from EW as we see more upside to come. We maintain our price target of $148.”
The firm noted how it was previously concerned about the dilutive gross margins associated with AI servers. While they are still likely to be in the high-single-digit-range, the dynamic is largely understood now with analysts adding that they are encouraged by the company’s ability to deliver mid-single-digit operating margins in the AI server business.
Dell’s plans to ship an estimated $9.4 billion of AI servers in Q4, which would lift full-year AI server shipments to $25 billion. Firm analyst now models 155% and 60% growth in AI orders in fiscal 2026 (FY26) and FY27.
“Enterprise server/storage. We believe both end markets are recovering. DELL continues to increase the mix of its IP offerings in storage. For traditional servers, DELL still has 70% of the installed base consisting of old gen products, which calls for considerable upgrade opportunities to come. We think DELL’s supply chain leadership can help better navigate the current commodity environment.”
Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.
9. Atlassian Corporation (NASDAQ:TEAM)
Number of Hedge Fund Holders: 60
Atlassian Corporation (NASDAQ:TEAM) is one of the 11 AI Stocks Analysts Are Watching Closely. On January 15, BTIG analyst Allan Verkhovski reiterated a “Buy” rating on the stock with a $220.00 price target. The rating affirmation follows Atlassian’s announcement of updated pricing for existing Data Center subscriptions.
Firm analysts highlighted in an investor note how Atlassian updated its new pricing for existing data center subscriptions on list pricing plans. There will be a 15% increase on list and lower tier pricing for Jira, Confluence, and Jira Service Management across all user tiers, effective February 17, 2026.
Analysts noted how this increase is considerably lower than the 25% price hike announced during the same period last year.
Explaining why the company hasn’t increased its DC pricing as much as the previous year, they highlighted how Atlassian announced on September 8, 2025 that it plans to end-of-life its Data Center deployment offering by March 28, 2029. Atlassian is currently transitioning customers to its Cloud services through its Ascend program.
Owing to positive customer response on TEAM’s Ascend program, migrations have contributed more than expected
“Last quarter, TEAM highlighted customer response to Ascend (program that helps customers jumpstart their migration planning) has been incredibly positive, and as such, increased its FY26 Cloud revenue growth outlook to reflect migrations driving a mid-to-high single-digit contribution to Cloud revenue growth, up from the prior expectation of a mid-single-digit contribution. We believe the smaller magnitude of this year’s Data Center price increase reflects positive traction among Data Center customers migrating to Cloud, reducing the need for TEAM to push pricing as aggressively. We had factored in a ~15% pricing increase in our base case, so our estimates are not under review.”
Atlassian Corporation (NASDAQ:TEAM) is a global software company that designs, develops, licenses, and maintains various software products worldwide.
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