According to LSEG data, tech giants including Microsoft, Alphabet, Amazon, and Meta are poised to report revenue rising at a swift pace in the July-September quarter. These companies will also likely announce further investments in AI, as per a Reuters report, due to the promise that AI holds in the long run.
A day before its earnings release, Microsoft reached a deal that allows OpenAI to restructure as a public benefit corporation, while providing Microsoft with a 27% stake in the company.
Meanwhile, Apple stock briefly surpassed the $4 trillion mark before closing the day on Tuesday, mostly unchanged. This was driven by strong demand for the newest iPhones, easing concerns that Apple is falling behind in the AI race.
With Big Tech scheduled to report results later in the week, investors will be on the lookout for any AI-related updates to justify high valuations and substantial investments.
“It’s been pretty impressive from our view that we continue to hit all-time highs. Tech and AI and the Big Seven have been driving performance as of late, but earnings have been good as well.”
-Jack Herr, primary investment analyst at Guidestone.
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 Q2 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 77
Palo Alto Networks, Inc. (NASDAQ:PANW) is one of the 11 Must-Watch AI Stocks on Wall Street. On October 27, Citizens JMP analyst Trevor Walsh raised the firm’s price target on the stock to $250 from $212 and kept an Outperform rating on the shares.
Walsh believes that PANW is a key name to watch ahead of earnings, particularly because of the under-recognized positive reaction it has received to its CyberArk acquisition.
The new price target represents a modest premium to the peer group mean of 33.2x. This premium valuation, the firm believes, is justified given PANW’s “ambitious platform strategy and intelligent product expansion efforts.”
These efforts are designed to capture a larger portion of the total addressable cybersecurity market.
“Palo Alto Networks currently trades at 32.9x CY26E EV/FCF multiple, while our revised $250 price target implies 38.0x CY26E EV/FCF (our prior $212 price target assumed a 32.1x CY26E EV/FCF multiple). This represents a modest premium to the mean multiple of 33.2x CY26E EV/FCF for the peer group. We believe this valuation is warranted given the company’s ambitious platform strategy and intelligent product expansion efforts to consolidate a wide swath of the total addressable cyber security market.”
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leader in AI-powered cybersecurity.
10. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 78
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the 11 Must-Watch AI Stocks on Wall Street. On October 28, Citi reiterated the stock as “Neutral” and raised its price target ahead of earnings week to $190 per share from $177.
The firm anticipates that Palantir will report robust Q3 results after positive channel checks across Palantir’s government and commercial businesses.
“Our intra-Q checks from partners and customers were positive, including checks from Oracle and Snowflake conferences intra-Q, where partners reported uptick in collaborative deals.”
In other news, RBC has maintained its Underperform rating and $45 price target for the stock. The firm believes that Palantir’s premium valuation appears unsustainable unless it delivers a substantial beat-and-raise quarter.
“We maintain our Underperform rating and $45 price target on Palantir ahead of Q3 earnings scheduled for November 3th after market close. We see unfavorable risk/reward. Shares of PLTR are up ~20% over the past three months (vs. ~4% for IGV). Heading into Q3 earnings, among our RBC All-SaaS constituents, Palantir is one of three names we track trading >20x EV/CY26E revenue (see here). We cannot rationalize why Palantir is the most expensive name in our software coverage. Absent a substantial beat-and-raise quarter elevating the NT growth trajectory, valuation seems unsustainable.”
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems.
Hedge Fund Resource Center