Speaking on CNBC’s “The Exchange,” Stacey Rasgon, senior U.S. semiconductor analyst and managing director at Bernstein, said that while artificial intelligence worries have been climbing, demand remains off the charts.
In particular, sustainability-related concerns tied to AI have been rising as huge numbers start to draw disbelief, while the scale of Nvidia’s ecosystem investments have also been raising eyebrows.
Despite these concerns, the firm remains bullish on the sector for now. At some point, there may be some air pockets, Rasgon noted, but it is not now, probably not this year or the next.
Wedbush analyst Dan Ives holds similar views, projecting that tech stocks may be up over 20% in 2026.
“Heading into 2026 the tech world and investors are both excited and nervous about the AI Revolution. On one hand this is a 4th Industrial Revolution taking shape with the US leading China on tech for the first in 30 years…while on the other hand the trillions of dollars needed to reach the heights of enterprise/consumer AI Revolution have caused nervousness and doubters among investors.”
-Analysts led by Dan Ives.
While Ives believes both sides could be right at the same time, it “ultimately speaks to 2026 being an inflection point year for the AI Revolution buildout.”
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.
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).
12. Pony AI Inc. (NASDAQ:PONY)
Number of Hedge Fund Holders: 27
Pony AI Inc. (NASDAQ:PONY) is one of the 12 AI Stocks in the Spotlight for Investors. On December 16, Barclays analyst Jiong Shao initiated coverage of the stock with an Equal Weight rating and $15 price target.
According to the firm, robotaxi technologies are mostly ready in China and there is a viable business model for them. While challenges facing the industry cannot be overlooked, the future potential of PONY AI lies in robo, not in taxi.
A day earlier, Macquarie initiated coverage on the stock with an Outperform rating and set a price target of $29. The firm believes 2026 is a turning point for robotaxi profits.
Firm analyst sees Pony AI at the forefront of robotaxi commercialization in China. It believes that 2026 is the starting point for the robotaxi push, with fleet size set to triple as well as witness a 20% decline in hardware costs that will push forward toward profitable operations.
“Our benchmarking suggests robotaxis could reach 45% of the China mobility market share by 2035E. Our base case is Pony remains a top-two China robotaxi player, which implies a $12.6B equity value.”
– Analyst Eugene Hsiao
Pony AI Inc. (NASDAQ:PONY) specializes in autonomous mobility, offering AI-driven robotruck and robotaxi services, intelligent driving software, and vehicle integration solutions.
11. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 42
SentinelOne, Inc. (NYSE:S) is one of the 12 AI Stocks in the Spotlight for Investors. On December 15, Citizens reiterated its “Market Outperform” rating on the stock with a $23.00 price target. The firm is cautiously positive on the stock, noting room for re-rating despite slower growth.
Citizens maintains its positive outlook on SentinelOne despite its “lack of scale relative to peers” and “declining top-line growth rate relative to profitability expectations.”
“SentinelOne currently trades at a CY26E EV/revenue multiple of 3.7x, while our $23 price target assumes a CY26E EV/revenue multiple of 6.0x, which is a discount to the peer group median multiple of 11.1x. We believe this is justified given SentinelOne’s lack of scale relative to peers, combined with a declining top-line growth rate relative to profitability expectations.”
The firm believes that there is room for re-rating provided execution improves, even if revenue growth remains moderated.
SentinelOne, Inc. (NYSE:S) is one of the leading artificial intelligence-powered cybersecurity providers.
Hedge Fund Resource Center