David Grain, Founder & CEO of Grain Management, joined CNBC on May 1 to discuss the AI-driven demand for data centers and tariff uncertainty. The main concerns regarding tariffs are the potential impact on costs, the resilience of supply chains, and the overall effect on business operations and their expansion. He also shared his perspective on why investors are still confident in the broadband and digital infrastructure sector. He characterized broadband as universally essential and emphasised that the demand for faster connectivity has not slowed, which is why the regulatory support for broadband expansion is globally robust. Grain noted that the administration has also met expectations for lighter regulation in the infrastructure sector, which makes it easier to advance projects and close deals. He described the admin’s stance as pro-growth and supportive of secure and competitive networks. Grain also observed that infrastructure, especially broadband, is an area where there is bipartisan support, given its positive impact on economic growth at both the state and local levels.
DeepSeek’s announcement was also followed by reports that suggested that some companies might be pulling back on data center spending. However, the latest earnings reports appeared to settle at least this debate and confirmed that the investments in this sector were still ongoing. David Grain elaborated on the current trends in data center investments and also stated that the demand for data centers is rising due to the increasing expansion of AI, as it requires vast amounts of computing power. He explained that while the demand here is not slowing, the feasibility of building new data centers is still influenced by the availability of reliable and high-capacity electricity.
That being said, we’re here with a list of the 11 hidden AI stocks to buy right now.
An overhead aerial shot of a bustling financial trading floor, focused on the buying and selling of stocks.
Our Methodology
We sifted through financial media reports to compile a list of the top hidden AI stocks with AI-related operations and opportunities. 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 Q4 2024.
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 Hidden AI Stocks to Buy Right Now
11. Sterling Infrastructure Inc. (NASDAQ:STRL)
Number of Hedge Fund Holders: 28
Sterling Infrastructure Inc. (NASDAQ:STRL) provides e-infrastructure, transportation, and building solutions in the US and operates through three segments. It also constructs and develops data centers, which are essential for supporting the rapidly surging AI workloads. The company was formerly known as Sterling Construction Company Inc. until June 2022.
In Q4 2024, Sterling Construction’s e-infrastructure revenue increased by 8% year-over-year. This was due to growth in the data center market, the revenue for which increased by more than 50%. The e-infrastructure backlog ended 2024 at over $1 billion, which was up 27%, with mission-critical work, such as data centers, which represent over 60% of the backlog. For 2025, Sterling Infrastructure Inc. (NASDAQ:STRL) expects strong e-infrastructure revenue growth above 10%.
The stock is down so far in 2025 due to the general slowdown of hype surrounding AI and data centers. However, on February 26, DA Davidson analyst Brent Thielman upgraded the stock to Buy from Neutral with an unchanged price target of $185. The firm stated that the recent share pullback is a good buying opportunity.
NCG Small Cap Strategy stated the following regarding Sterling Infrastructure, Inc. (NASDAQ:STRL) in its Q2 2024 investor letter:
“Sterling Infrastructure, Inc. (NASDAQ:STRL) is a construction and infrastructure services provider for the buildout of data centers, manufacturing facilities, warehouses, transportation, and residential and commercial buildings. Over the years, the company improved their financial performance by shifting focus to higher growth end markets which allowed for better visibility and project economics. We believe revenue growth and margin expansion should continue as end market tailwinds persist.”
10. Samsara Inc. (NYSE:IOT)
Number of Hedge Fund Holders: 40
Samsara Inc. (NYSE:IOT) provides solutions to connect physical operations data to its connected operations platform in the US and internationally. Its Connected Operations Platform includes the Data Platform, which ingests, aggregates, and enriches data from its IoT devices. The company also integrates AI into its data platform and video-based safety applications.
Samsara’s large operational data asset is crucial for its AI initiatives. It processes over 14 trillion data points annually. AI is now being applied across areas like predictive maintenance, real-time route adjustments, and automated driver safety. Samsara is developing and deploying Manhattan Assist features across its platform, which uses GenAI. The company also plans to preview more Agentic AI capabilities at its upcoming Beyond customer conference.
For the full fiscal year 2025, the company made $1.25 billion in revenue, which was up 33% year-over-year. The annual recurring revenue in the period totaled $1.46 billion, which was up 33%. Samsara Inc. (NYSE:IOT) highlights that AI has become 100 times less expensive in the last two years and is becoming increasingly accessible. On February 3rd, Berenberg analyst Nay Soe Naing initiated coverage of Samsara with a Hold rating and a $57 stock price target.
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding Samsara Inc. (NYSE:IOT) in its Q3 2024 investor letter:
“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that are growing their shares of corporate IT budgets. Samsara Inc. (NYSE:IOT) develops Internet connected sensor systems. Strong results boosted the stock by 43%. The quarter was highlighted by new customer wins and revenue growth. Samsara’s value proposition is their products create tangible return on investment. Its client space spans across construction, field services, utilities, transportation, and logistics.”
9. Modine Manufacturing Co. (NYSE:MOD)
Number of Hedge Fund Holders: 43
Modine Manufacturing Co. (NYSE:MOD) provides thermal management products and solutions. It operates through Climate Solutions and Performance Technologies segments. The company also provides data center products consisting of IT cooling solutions, such as precision air conditioning units for data center applications.
The surge in demand for HPC due to AI/ML applications increases the need for cooling solutions for data centers. Modine’s expertise in this area positions it as a leading data center cooling business. In FQ3 2025, Modine’s data center revenues grew by 176% year-over-year. This was partly fueled by the acquisition of Scott Springfield, which contributed $63 million to this data center revenue.
The company recently also secured a $180 million order from a leading AI infrastructure developer for its specialized Airedale by Modine data center cooling systems. On March 31, DA Davidson reiterated a Buy rating on the stock but lowered the price target to $140 from $155. Modine Manufacturing Co. (NYSE:MOD) now projects to grow data center sales by 110% to 120% for the full FY2025.
SouthernSun Small Cap Strategy highlighted Modine’s positive turnaround driven by new CEO Neil Brinker’s strategic shift towards HVAC and stated the following regarding Modine Manufacturing Company (NYSE:MOD) in its Q1 2025 investor letter:
“Modine Manufacturing Company (NYSE:MOD) is an over 100-year-old thermal management company based in Racine, WI. The company started out producing heat exchangers for tractors but quickly expanded into the automotive market and became a major supplier of heat exchangers to leading car manufacturers. As demand for automobiles increased significantly throughout the 20th century, Modine expanded operations globally. However, as the automotive market matured and became more competitive, MOD’s growth slowed, and the company went through numerous restructurings to take cost out of the business. The company attempted to diversify into the HVAC industry by buying Airedale in 2005 and Luvata in 2016, but management lacked a clear strategic vision, and the legacy automotive business continued to attract most of the time and resources.
In December 2020, MOD’s board decided new leadership was needed and hired Neil Brinker as CEO. Brinker was previously COO at Advanced Energy (AEIS) and had experience working at Idex Corporation (IEX) and Danaher (DANH) – both high performing industrials (we have been owners of AEIS and IEX and think highly of their business culture). After assessing the business, Brinker decided the company needed to move away from its legacy automotive parts businesses and shift resources into HVAC. He quickly implemented operational changes including reorganizing the business into 6 business units, hiring new general managers, implementing 80/20, and divesting low growth, low-margin automotive businesses. The changes yielded quick results with Adjusted EBITDA rising roughly 80% over three years…” (Click here to read the full text)
8. Celestica Inc. (NYSE:CLS)
Number of Hedge Fund Holders: 44
Celestica Inc. (NYSE:CLS) provides supply chain solutions in North America, Europe, and Asia. It operates through two segments: Advanced Technology Solutions and Connectivity & Cloud Solutions. The company is riding the AI wave through business in AI/ML servers, 1.6 Terabyte switches, and advanced liquid cooling systems.
On February 21, JPMorgan initiated coverage of the stock with an Overweight rating and a $166 price target. The firm believes that Celestica would benefit from AI infrastructure investments, particularly in custom ASIC servers and white box switches, due to ties with major hyperscalers. The hyperscaler data center segment within Celestica’s CCS (Cloud and Connectivity Solutions) division drove the division’s revenue to improve by 28% year-over-year in Q1 2025, which totaled $1.84 billion.
The communications end market, which largely serves these hyperscalers, saw an 87% revenue increase as well. Within the CCS segment, the demand for HPS revenue grew by 99% in Q1, reaching just over $1 billion and accounting for 39% of the company’s total revenue. This growth also came from hyperscalers’ demand for Celestica’s 400G networking switches and the ramp-up of newer 800G switch programs.
Renaissance International Small Cap Strategy stated the following regarding Celestica Inc. (NYSE:CLS) in its Q4 2024 investor letter:
“The top contributor to our portfolio performance during the quarter was Celestica Inc. (NYSE:CLS) (Canada), as the provider of electronic manufacturing services benefits from ongoing investments in AI infrastructure and high-bandwidth networking solutions. Celestica is well positioned to capitalize on emerging opportunities in next-generation data centers and networking technologies.”
7. Super Micro Computer Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 45
Super Micro Computer Inc. (NASDAQ:SMCI) develops and sells high-performance server and storage solutions. These solutions are crucial for AI/ML workloads. The company also offers a range of IT solutions, like complete servers, storage systems, modular blade servers, and full-rack scale solutions.
The company’s servers integrate NVIDIA GPUs, which are needed by AI and data centers. SMCI recently projected massive revenue growth and forecasted $40 billion in FY26 sales. One of the reasons behind this outlook is the demand for AI-optimized servers, particularly those incorporating NVIDIA’s advanced chips. It’s also fueled by SMCI’s direct-liquid cooling technology.
However, Goldman Sachs downgraded the stock from Buy to Sell on March 24 and reduced its price target from $40 to $32 due to the increased competition in AI servers. The firm sees risks in valuation, with the stock trading at 16x projected FY25 earnings, and expects its premium over peers to narrow due to limited product differentiation. Analyst Michael Ng also noted that SMCI’s market leadership in AI servers may weaken as rivals ramp up R&D investment.
6. Ciena Corp. (NYSE:CIEN)
Number of Hedge Fund Holders: 52
Ciena Corp. (NYSE:CIEN) is a network technology company that provides hardware, software, and services for various network operators. It focuses on the telecommunication industry and large cloud service providers. The company also uses AI, particularly through the Blue Planet and Navigator Network Control Suite, to transform customer support, network management, and service operations.
In Q1 2025, direct revenue from cloud providers constituted 32% of Ciena’s total revenue of $1.07 billion. The cloud provider segment drives growth for the company partly due to its connection to AI infrastructure. Notably, 5 cloud providers were among Ciena’s top 10 customers in Q1. The company’s WaveLogic 6 Extreme solution offers increased capacity and reduced space and power requirements. These are crucial for the massive scale of cloud data centers supporting AI.
In Q1, Ciena added 20 new customers for WaveLogic 6E. The WaveLogic 5 solution also continues to be a foundational technology, with over 160,000 modems shipped worldwide. It underpins the network backbones for the AI and cloud economy. Ciena saw a 2.9% year-over-year increase in revenue to $1.07 billion in Q1 2025 as it benefited from the recalibration of AI-driven network architecture deployments.
Diamond Hill Mid Cap Strategy stated the following regarding Ciena Corporation (NYSE:CIEN) in its Q4 2024 investor letter:
“On an individual holdings’ basis, top contributors to return in Q4 included Ciena Corporation (NYSE:CIEN) and WESCO. Networking systems company Ciena is benefiting from continued demand from cloud customers and stabilization from service providers, giving a boost to shares in the quarter.”
5. Deere & Co. (NYSE:DE)
Number of Hedge Fund Holders: 57
Deere & Co. (NYSE:DE) manufactures and distributes various equipment worldwide. The company operates through four segments: Production & Precision Agriculture, Small Agriculture & Turf, Construction & Forestry, and Financial Services. The company’s Precision Agriculture segment also leverages AI for its operations.
The company’s Production & Precision Agriculture business unit in total reported net sales of $3.067 billion in Q1 2025. Deere’s commitment to integrating AI into its agricultural machinery and solutions is evident through actions like the adoption of Precision Agriculture Essentials kits and JDLink Boost, which is a satellite connectivity solution powered by Starlink in the Brazilian market with over 1,500 and 1,200 orders, respectively, in Q1.
Through AI-powered tools and services, Deere aims to drive value for its customers. On February 10, JPMorgan raised the price target for the stock to $500 from $470, expecting short sellers to continue exiting their positions. One of the reasons behind this sentiment was the recent rise in agricultural equipment stocks, which included a $30 billion aid package that could boost US farm income by about 30% in 2025, just below previous highs.
Nightview Capital expressed strong optimism about Deere’s transition into a tech leader and stated the following regarding Deere & Company (NYSE:DE) in its Q4 2024 investor letter:
“In January, we purchased shares of Deere & Company (NYSE:DE) based on a simple thesis: the 185-year-old company is evolving from a machinery manufacturer into a technology leader in an industry that urgently needs innovation.
Deere’s vision of autonomous tractors, dump trucks, and mowers address critical labor shortages, enabling farmers, builders, and landscapers to maintain productivity with fewer workers.”
Deere’s potential to transform the multi-trillion-dollar agriculture market is significant. Technologies like its See & Spray system, which reduced herbicide use by nearly 60% across over one million acres in 2024, demonstrate its ability to drive efficiency and environmental benefits. Its connected ecosystems, such as the John Deere Operations Center, are integrating machinery and data to improve decision-making and outcomes for customers.
The company has also implemented structural improvements to weather challenging market conditions. In 2024, Deere generated $6.9 billion in operating cash flow from equipment operations, achieving 18.2% operating margins despite lower shipment volumes. These measures support reinvestment in technology and steady shareholder returns, while maintaining operational discipline.
Deere’s continued pivot toward technology-driven solutions and recurring revenue models, such as pay-per-use and software licensing, enhances its ability to serve modern farmers and contractors effectively. We are optimistic about the company’s ability to lead innovation in its markets and will share further updates as we continue to evaluate its long-term prospects.”
4. GE HealthCare Technologies Inc. (NASDAQ:GEHC)
Number of Hedge Fund Holders: 64
GE HealthCare Technologies Inc. (NASDAQ:GEHC) manufactures and markets products, services, and digital solutions for the diagnosis, treatment, and monitoring of patients. It operates through four segments. The company also provides new-age medical technology, cloud-first AI-enabled solutions, and data analytics services.
In Q1 2025, the company’s AVS (Advanced Visualization Solutions) segment reported revenue growth of 3% year-over-year, with particularly strong performance in the US. This growth, while currently a smaller portion of the overall $4.8 billion revenue, is important as GE HealthCare’s product roadmap for AVS is increasingly centered on accelerating recurring revenue through digital and AI-powered solutions across its ultrasound and Interventional Guided Therapy product portfolios.
GE HealthCare Technologies Inc. (NASDAQ:GEHC) is actively investing in R&D within the AVS segment to further advance its AI capabilities. On January 8, Jefferies analysts recently raised the stock’s rating from Hold to Buy due to a bullish outlook for the company. The analysts emphasized GE HealthCare’s ability to acquire market share in diagnostic imaging and prenatal diagnostics, which Jefferies regarded as increasing and under-modeled for future development.
Oakmark Fund stated the following regarding GE HealthCare Technologies Inc. (NASDAQ:GEHC) in its Q4 2024 investor letter:
“GE HealthCare Technologies Inc. (NASDAQ:GEHC) is a leading global medical technology company that was spun off from General Electric in January 2023. As a standalone company, we expect GE HealthCare to benefit from increased focus, better aligned management and incentives, and an improved corporate culture. We believe these changes will help drive higher margins and organic growth. In addition, we think GE HealthCare is well-positioned to capitalize on technology trends as a greater portion of the value proposition comes from AI-enabled software and a shift toward precision care. A lack of appreciation for the company’s self-help potential coupled with short-term concerns around weak demand in China provided us with the opportunity to purchase shares at a low valuation relative to other high-quality medical technology companies and at the lowest price relative to the S&P 500 since the IPO.”
3. Coherent Corp. (NYSE:COHR)
Number of Hedge Fund Holders: 71
Coherent Corp. (NYSE:COHR) develops, manufactures, and markets engineered materials, optoelectronic components & devices, and optical & laser systems & subsystems. These are used in industrial, communications, electronics, and instrumentation markets worldwide. The company benefits from the demand for AI-related components like optical transceivers, which are required by data centers.
The company made record datacom revenue in FQ2 2025, particularly fueled by the strong adoption of Coherent’s 800G transceivers. This revenue showed an improvement of 79% year-over-year. To further support this growth, indium phosphide production tripled year-over-year. Indium phosphide is a binary semiconductor composed of indium and phosphorus. It’s used in lasers and other optoelectronic devices, used for high-speed data transmission in applications like AI-driven data centers.
On March 24, Raymond James revised its datacom optical model and forecasted $22.2 billion in AI backend transceiver sales by 2030, with a ~30% annual growth rate. Its 2027 estimate for AI backend revenue increased to $7.5 billion from $7.1 billion. Raymond James analyst Simon Leopold also upgraded the stock from Outperform to Strong Buy but lowered the price target to $91 from $110.
Diamond Hill Select Strategy stated the following regarding Coherent Corp. (NYSE:COHR) in its Q4 2024 investor letter:
“Among our other top Q4 contributors were Amazon, WESCO and Coherent Corp. (NYSE:COHR). Coherent is a global leader in materials, networking and lasers for the industrial, communications, electronics and instrumentation markets. Demand for optical transceivers used in AI datacenter buildouts has been robust, benefiting Coherent and resulting in higher earnings and new orders which suggest momentum is likely to continue.”
2. Vertiv Holdings Co. (NYSE:VRT)
Number of Hedge Fund Holders: 92
Vertiv Holdings Co. (NYSE:VRT) designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, among other applications. The company’s AI-ready power, cooling, and IT infrastructure offerings are also designed to run AI workloads even during outages, which minimizes dependency on utility providers.
In Q1 2025, Vertiv’s net sales were up 25% year-over-year, partly due to the growth in its data center market. The backlog also expanded to $7.9 billion, which was up $1.6 billion year-over-year. The company is partnering with players like NVIDIA, as shown by the collaboration on the iGenius project to deliver fully prefabricated AI factories.
Bank of America Securities analyst Andrew Obin recently reiterated a Buy rating on the stock with a $165 price target. This sentiment comes from factors that highlight the promising long-term demand outlook for Vertiv Holdings Co. (NYSE:VRT). Despite the short-term challenges, the company’s growth in the Americas is a strong point.
Hardman Johnston Global Equity Strategy stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its Q4 2024 investor letter:
“From a sector standpoint, the main drivers of the portfolio’s outperformance during the fourth quarter were Industrials and Materials. Within Industrials, Howmet Aerospace, Inc. and Vertiv Holdings Co (NYSE:VRT) were the largest contributors to outperformance. Vertiv has been a stellar performer for the past year and beyond. The global leader in data center thermal and electrical equipment continued to execute on its record backlog, with strong order flow largely related to AI-driven data center demand. Data center operators and hyperscalers are partnering with the company to develop next generation designs to optimize power and thermal efficiency. Vertiv’s global service network is uniquely positioned to help clients design and maintain these important data centers.”
1. Oracle Corp. (NYSE:ORCL)
Number of Hedge Fund Holders: 105
Oracle Corp. (NYSE:ORCL) offers products and services that address enterprise IT environments worldwide. Its Oracle cloud Software as a Service (SaaS) offering includes various cloud software applications. The company offers one of the industry’s broadest and deepest suites of AI-powered cloud applications.
The company also has established cloud partnerships with major tech players like OpenAI, xAI, Meta, NVIDIA, and AMD. Its cloud segment, which includes Infrastructure as a Service (IaaS) and SaaS, made a total of $6.2 billion, which marked an improvement of 23% year-over-year. IaaS revenue alone rose by 49% to make $2.7 billion.
TD Cowen maintained a buy rating on the stock on March 7, with a $210 price target. The firm has a bullish outlook on the company’s new Stargate partnership. This partnership is expected to invest around $500 billion in AI infrastructure in the US over 4 years. Oracle is also securing multibillion-dollar contracts for GPU clusters, which further positions it as a leader in the AI sector.
Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q1 2025 investor letter:
“Oracle Corporation (NYSE:ORCL) provides products and services that address enterprise information technology (IT) environments. The company’s products and services include enterprise applications and infrastructure offerings that are delivered worldwide through a variety of flexible and interoperable IT deployment models. The company operates in three segments: Cloud and License, Hardware and Services.
We believe Oracle’s cloud infrastructure product, OCI 2.0, will continue to demonstrate strong revenue growth over several quarters. Additionally, we see the rapid growth of artificial intelligence (AI) computing needs as being a differentiated growth driver for Oracle. We believe that Oracle will continue to drive positive outcomes for the Cerner business through a better margin structure, as well as top-line sales synergies.”
As we acknowledge the growth potential of Oracle Corp. (NYSE:ORCL), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ORCL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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