Keith Lerner, co-chief investment officer at Truist Wealth, joined CNBC’s “Closing Bell” on June 27 to discuss how the bull market’s dominant theme is AI. Due to several factors, which include improved dealings with tariffs, calming geopolitics for the time being, declining inflation, and the expectation of a Fed rate cut in September, Keith Lerner stated that the market should continue to move higher, although he cautioned that valuations might limit the extent of the rise. He pointed out that the market has been moving sideways for the past 7 months, but a key development is the re-emergence of AI as the dominant theme of this bull market.
He noted that while the S&P 500 is just reaching new highs, the tech sector has already achieved new highs, which suggests that it will likely pull the rest of the market up. Lerner also mentioned that the last earnings season exceeded expectations, particularly for growth sectors like tech and communications. He reiterated the positive tailwinds of lower interest rates, decreasing inflation, and the prevailing tech theme. Lerner confirmed that Truist Wealth has been overweight in communication services all year and recently became overweight in tech. He remains positive on growth stocks. Additionally, he expressed a positive outlook on industrials and viewed them as an indirect AI play due to their role in power generation and cooling for data centers, which are essential for AI infrastructure.
That being said, we’re here with a list of the 11 best AI stocks to buy according to hedge funds.
A doctor in a laboratory, overseeing the development of Artificial Intelligence (AI).
Methodology
We sifted through ETFs and financial media reports to compile a list of the top AI stocks. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q1 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Best AI Stocks to Buy According to Hedge Funds
11. Perfect Corp. (NYSE:PERF)
Number of Hedge Fund Holders: 10
Perfect Corp. (NYSE:PERF) is one of the best AI stocks to buy according to hedge funds. On June 27, Perfect Corp. announced that its AI Skin Analysis technology has won the Newsweek AI Impact Award in the “Brand & Retail: Best Outcomes, Customer Experience” category. This prestigious award recognizes Perfect Corp.’s Real-Time Skin Analysis solution for its impact on customer engagement and personalized skincare experiences.
The Newsweek AI Impact Awards celebrate the most innovative and effective applications of AI across various industries and focus on solutions that deliver measurable business outcomes and enhance user experiences. Perfect Corp.’s Real-Time Skin Analysis was particularly recognized for its ability to offer consumers instant, AI-powered skin assessments. Perfect Corp.’s AI Skin Analysis solution employs state-of-the-art AI algorithms that are trained on over 70,000 medical-grade skincare images.
The extensive training enables the technology to accurately detect key skin concerns such as moisture levels, oiliness, fine lines, wrinkles, spots, and acne. The software then provides personalized skincare recommendations in real-time. Beyond AI Skin Analysis, Perfect Corp. offers cutting-edge AI solutions, such as virtual try-ons for makeup, hairstyles, eyewear, jewelry, watches, and fashion accessories, as well as advanced AI-driven analyzers for hair.
Perfect Corp. (NYSE:PERF) is an artificial intelligence software as a service company that provides AI/AR-powered solutions for the beauty, fashion, and skincare industries worldwide.
10. Lantronix Inc. (NASDAQ:LTRX)
Number of Hedge Fund Holders: 13
Lantronix Inc. (NASDAQ:LTRX) is one of the best AI stocks to buy according to hedge funds. On June 26, Lantronix announced a multi-year agreement with a Tier-1 US mobile network operator. The agreement is set to digitally transform the management of over 50,000 backup power systems located at wireless cell sites across the US.
The deployment will utilize Lantronix’s Edge gateways, specifically the FOX Series, and its cloud-based Percepxion platform. The solutions will enable real-time monitoring of generator health, which includes critical metrics like fuel levels, battery status, oil pressure, and coolant temperature. This aims to enhance network reliability, reduce service disruptions, and cut operational costs by moving away from traditional and inefficient manual inspections.
The company was selected from a competitive field of more than 20 competitors, which shows the strength and scalability of its solutions for large and distributed asset networks. Volume shipments for the contract have already commenced and indicate immediate revenue generation for Lantronix.
Lantronix Inc. (NASDAQ:LTRX) develops, markets, and sells industrial and enterprise IoT products and services. The company specializes in Edge AI.
