The use of artificial intelligence technology is becoming widespread, but technology leaders and consumers are still skeptical about its use. A recent survey of 1,393 technology leaders across nine countries by IT staffing and services provider Experis reveals that two-thirds of leaders are ramping up their AI capabilities, and almost half are incorporating AI skills into existing roles rather than creating new positions.
Meanwhile, a consumer survey reveals that a staggering 83% of Americans report distrust in companies developing AI systems responsibly. 72% feel the same way about the government regulation of these technologies.
“CIOs and technology leaders are embedding AI into existing functions and roles primarily by using it to augment existing work patterns and tasks. This initial use of AI tools is expected to generate modest productivity increases. In the short term, AI operates within boundaries, enhancing current processes without fundamentally transforming them.”
-Cameron Haight, an analyst at research firm Gartner.
Then again, tech giants such as Meta are betting higher and higher in the field, and traders are optimistic that the expensive bets will pay off. Only last week, Last week, the company finalized a $14.3 billion investment in Scale AI. Scale AI’s leader is also joining a team hand-picked by Chief Executive Officer Mark Zuckerberg to pursue artificial general intelligence.
Amongst this contrast between conscious adoption and massive investment bets, one thing is clear: artificial intelligence is here to reshape the future. For investors, this raises an important question about the companies and industries they should be watching to have a lead in the AI revolution.
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 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).
12. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 57
International Business Machines Corporation (NYSE:IBM) is one of the 12 AI Stocks Every Investor is Watching. On June 16, Evercore ISI analyst Amit Daryanani raised the firm’s price target on the stock to $315 from $275 and kept an “Outperform” rating on the shares.
According to the firm, IBM can sustain mid to high single-digit sales growth and double-digit EPS and free cash flow growth over the next several years. This will enable the company to trend towards $16-$18 of EPS power over the next three years.
The analyst cited recent market multiple expansion for its raised target on the shares.
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.
11. Reddit, Inc. (NYSE:RDDT)
Number of Hedge Fund Holders: 72
Reddit, Inc. (NYSE:RDDT) is one of the 12 AI Stocks Every Investor is Watching. On June 16, the company announced the launch of two new AI-powered advertising features at the Cannes Lions 2025, designed to help brands drive greater engagement by tapping user conversations on the platform.
Powered by Reddit Community Intelligence, its first AI-driven social listening tool, “Reddit Insights”, aims to provide marketers with real-time insights for planning campaigns. This is done by identifying trends on the platform and testing campaign ideas.
The company will also be offering a “Conversation Summary Add-ons” feature. This feature will enable brands to integrate positive user comments directly beneath their advertisements to demonstrate what users think about the ad’s subject.
Together, the new AI-driven marketing capabilities will allow marketers to better leverage user discussions from the platform for improving their advertising effectiveness.
“These new products are features I’ve wanted to build since my first day at Reddit. In a world increasingly flattened by AI, the value of human content on our platform only grows. With Reddit Community Intelligence™, we’re not just surfacing insights and conversations; we’re offering deep context, perspective, and the voice of real people at scale.”
-Jen Wong, Chief Operating Officer at Reddit.
Reddit, Inc. (NYSE:RDDT) is a social media platform that leverages AI to strengthen search functionality and improve user engagement.