According to data from financial markets platform Dealogic, global technology companies have pushed debt issuance to record levels this year. Even cash-rich firms have been increasingly tapping credit markets as the race toward building artificial intelligence capacity intensifies.
Technology companies issued $428.3 billion of bonds in 2025 through the first week of December. U.S. firms led the surge with $341.8 billion, while European and Asian tech companies followed with $49.1 billion and $33 billion, respectively.
Data from Dealogic implied how big names, who traditionally relied on internal cash generation, are now tapping credit markets driven by strong investor demand and relatively lower borrowing costs.
Michelle Connell, president at Portia Capital Management, notes how this rise in debt-funded AI spending reflects a structural shift in the industry. This shift, characterized by short chip lifecycles and technological obsolescence, has been forcing companies to reinvest continuously.
The heavy debt issuance has in turn lifted leverage at some firms, raising concerns about how balance sheets will fare if AI spending ends up disappointing. The largest tech firms, however, tend to remain profitable and well-positioned to absorb potential risks.
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. Serve Robotics Inc. (NASDAQ:SERV)
Number of Hedge Fund Holders: 10
Serve Robotics Inc. (NASDAQ:SERV) is one of the 12 AI Stocks Making Waves on Wall Street. On December 18, Oppenheimer initiated coverage on the stock with an “Outperform” rating and a $20.00 price target. The firm sees SERV as a “Physical AI leader” with an edge in last-mile delivery.
Oppenheimer highlighted SERV’s leadership in navigating complex environments, particularly sidewalks, where large-scale and real-world data collection has enabled it to enable faster learning cycles than peers.
The firm believes this data depth is leading to efficient software development and optimized hardware design, creating structural cost advantages.
“We see Serve Robotics as a Physical AI pioneer targeting last-mile delivery as its first application. We believe it is leveraging its global data leadership in complex environments, notably sidewalks, into advantaged hardware design and software efficiency to drive structural cost advantages and accelerated learning cycles versus peers. We initiate coverage with an Outperform rating and a $20 PT.”
Serve Robotics Inc. (NASDAQ:SERV) designs, develops, and operates low-emission robots.
11. WhiteFiber, Inc. (NASDAQ:WYFI)
Number of Hedge Fund Holders: 18
WhiteFiber, Inc. (NASDAQ:WYFI) is one of the 12 AI Stocks Making Waves on Wall Street. On December 22, H.C. Wainwright reiterated a “Buy” rating on the stock with a $34.00 price target. The rating affirmation follows the company’s announcement of a major colocation agreement with Nscale, validating its fast-deploy model.
WYFI announced that it secured a premium AI deal with Nscale on December 18. The deal involves a 10-year colocation agreement for 40MW of critical IT load at its NC-1 AI data center campus in Madison, North Carolina.
H.C. Wainwright noted how the agreement, representing an estimated $865M in contracted revenue, was chosen by WhiteFiber after careful consideration. Nscale has a proven track record of “delivering large-scale hyperscaler deployments,” it noted.
“We see the deal validating deliberations in review of competing offers for readily available HPC hosting power before selecting Nscale, a counterparty with a proven track record of delivering large-scale hyperscaler deployments.”
The firm further said that it believes that this new agreement with Nscale will be the beginning of a long-term partnership with a specialized AI infrastructure and cloud services provider.
“The new Nscale agreement forms the foundation of WhiteFiber’s potentially long-term partnership with a specialized AI infrastructure and cloud services provider that serves leading investment-grade technology customers such as Microsoft (MSFT; not rated) and OpenAI…”
WhiteFiber, Inc. (NASDAQ:WYFI) is an AI infrastructure company that designs, develops, and operates data centers and provides artificial intelligence (AI) infrastructure solutions.
10. Five9, Inc. (NASDAQ:FIVN)
Number of Hedge Fund Holders: 29
Five9, Inc. (NASDAQ:FIVN) is one of the 12 AI Stocks Making Waves on Wall Street. On December 22, Needham maintained its Buy rating on the stock, keeping its price target at $40.00.
Firm analysts remain confident on FIVN following contact center as a service (CCaaS) specialist consultations, noting that AI demand will sustain long-term growth.
“We connected with two CCaaS experts including the CRO at a firm specializing in BPO & CCaaS solutions and a Senior Account Executive at a pure-play Contact Center conversational & Agentic AI platform who both painted a positive yet mixed view on FIVN.”
Discussions have revealed that migration from on-premises solutions to cloud platforms remains a meaningful long-term opportunity for the company, particularly among large enterprises with complex legacy systems.
The firm’s research contradicts the bearish views surrounding Five9’s technology, which is why it has deemed the concerns as overblown. On the contrary, it believes that the company’s integration capabilities are a competitive advantage in the market.
AI adoption continues to remain a focus in the industry, even though customer confusion regarding pricing and deployment has been extending sales cycles for vendors such as Five9.
“Experts characterized core CCaaS functionality as largely parity across top vendors suggesting recent Bear concerns around Five9’s technology as outdated are largely noise with FIVN’s integration capabilities a plus. AI adoption remains a focus, but customer confusion around pricing & deployment is extending sales cycles but ultimately driving more dollars to CC vendors as customers seek to reduce complexity keeping AI tied to CC platforms.”
Five9, Inc. (NASDAQ:FIVN) is a technology company that offers cloud software solutions for contact centers.
9. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 36
Rivian Automotive, Inc. (NASDAQ:RIVN) is one of the 12 AI Stocks Making Waves on Wall Street. On December 19, Wedbush reiterated the stock as “Outperform” and raised its price target to $25.00 (from $16.00).
The firm is optimistic on Rivian ahead of the R2 launch in 1H26, autonomy progress, and cost discipline despite tariff headwinds.
“We are raising our price target of RIVN from $16 to $25 while maintaining our OUTPERFORM rating as 2026 represents a significant year for the company with the launch of R2 in 1H26 expected to drive improving delivery metrics…”
Besides improving delivery metrics, the R2 launch will also likely improve Rivian’s autonomy roadmap to tap in alternative revenue sources while managing its cost structure.
The firm’s analysis factors in the company’s requirement to navigate tariff risks while sustaining investments.
Rivian Automotive, Inc. (NASDAQ:RIVN) is an automaker that creates and manufactures electric vehicles, as well as software and services.
8. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 77
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the 12 AI Stocks Making Waves on Wall Street. On December 22, Citigroup added a “Positive Catalyst” watch on the stock with a price target of $114.
The firm said that it is bullish on the stock ahead of the Consumer Electronics Show in early January. The show will be demonstrating an increasing adoption of Marvell’s scale-up networking solutions.
“We hosted Marvell’s SVP of Finance Steve Vermillion and SVP of Investor Relations Ashish Saran for investor meetings in Asia last week. Meetings reinforced positive conviction in our core thesis of accelerating Y/Y sales growth in 2026/27 driven by AI data centers.”
According to Citi, concerns about competition from XPU at two major hyperscale clients appear to be unfounded, and that the recent share price drop is an opportunity to buy.
Its discussions with the management have also reinforced its belief that Marvell will experience significant sales growth acceleration in 2026 and 2027. This growth will largely be driven by advancements in AI data centers.
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
7. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
Micron Technology, Inc. (NASDAQ:MU) is one of the 12 AI Stocks Making Waves on Wall Street. On December 18, Morgan Stanley analyst Joseph Moore raised the price target on the stock to $325 from $180, citing a constructive long-term outlook as memory cycle enters its next phase, supported by AI-driven demand.
The firm acknowledged that the recent strength in the stock is a reflection of extreme movements in DRAM pricing over the past quarter. Supply constraints have been so severe that an estimated 30% of end demand appears to be going unmet.
These imbalances are anticipated to be normalized by mid-2026 as new production capacity comes online, the firm noted. While the stock’s rapid run-up may trigger volatility and pullbacks, it views these opportunities to buy rather than signals to exit.
Meanwhile, the longer-term thesis focuses on multi-year data center expansion cycle driven by AI workloads. Memory suppliers are planning for data center capacity ramp, reflecting confidence in sustained demand from cloud service providers.
“We’d be buyers into a pull-back and would stay long for an extended period of time. We believe memory/storage vendors are planning for a 2-3 year data center capacity ramp. As new capacity comes online, we expect supply dislocations to normalize while driving up operating profits. Given the huge run-up, we expect sharp drawdowns. We would be looking at selloffs as buying opportunities. We derive our bullishness from a differentiated narrative vs the Street. Rather than look to price dislocation alone as an indicator of end demand, we look to the rising supply over the next 2-3 years as indicative of memory suppliers’ confidence in the underlying demand from AI data centers as CSPs enter the next phase of AI build-out. Into an upcycle we expect memory suppliers to be judicious in their capex decisions. We are raising our earnings estimates and taking up our PT to $325 vs. our previous target of $180 set 3 months ago. Our PT is based on 13x EPS multiple over our CY27 estimate of $76bn/$25. We expect further expansion of revenue/eps into 2028.”
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.
6. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 119
Salesforce, Inc. (NYSE:CRM) is one of the 12 AI Stocks Making Waves on Wall Street. On December 15, Truist Securities reiterated its Buy rating on the stock with a price target of $380.00. The rating affirmation follows Salesforce’s Agentforce customer event.
According to the research firm, 3QFY26 represented “a solid progress report” on Agentforce and the company’s Agentic Enterprise strategy. These are gaining broader adoption across the company’s customer and partner ecosystem.
The firm further noted that accelerating net new annual order value is an indicator that Salesforce’s subscription and support revenue growth may improve into fiscal year 2027 and beyond.
Overall, the firm’s rating reflects optimism in the company’s strategic direction and growth potential.
Salesforce, Inc. (NYSE:CRM) is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce.
5. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 120
Tesla, Inc. (NASDAQ:TSLA) is one of the 12 AI Stocks Making Waves on Wall Street. On December 16, Goldman Sachs reiterated its Neutral rating on the stock with a $400.00 price target.
Firm analysts noted Tesla’s commencement and progress on robotaxi testing without safety monitors in Austin, maintaining their cautious stance amid competitive and execution risks.
According to several posts on X by key Tesla executives, the automaker has begun testing robotaxi rides in Austin without safety monitors. This marks a major step for Tesla in the development of its autonomous technology.
The firm noted how this testing aligns with the company’s previously stated plans of launching its ridehail service with robotaxi technology in 8-10 metropolitan areas by the end of the year. It also aimed to have the safety observer out by year-end in Austin.
According to Goldman Sachs, the removal of monitors for testing is a big step forward that Tesla is making with its autonomous technology. Investors will now be keeping an eye on how fast the company can scale its driverless operations and how profitable these services can be.
“We also believe Tesla is making progress with its autonomy software for consumer vehicles (which is FSD). We continue to expect autonomy (both FSD and robotaxis) to be key drivers of Tesla’s growth, but we expect competition to gate the level of profitability improvement, and we are Neutral rated on the stock.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
4. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 122
Oracle Corporation (NYSE:ORCL) is one of the 12 AI Stocks Making Waves on Wall Street. On December 17, Citizens maintained its “Market Outperform” rating on the stock with a $342.00 price target. The firm remains confident in Oracle’s cloud business model, contract economics, and funding structure, despite ongoing debt-related concerns.
Citizens highlighted the increasing cost of insuring Oracle debt and some general investor confusion surrounding its OCI business model. Even though the media has focused on these debt signals as a measure of business risk, the firm believes that the reality is far more complex.
Citizens believes that the long-term contracts of Oracle are highly valuable and that the company is still able to finance projects efficiently.
“We believe the NPV of Oracle’s take-or-pay contracts remains very positive (assuming they are like CRWV), and that the ability to match project finance debt against underlying contract duration at 80% loan to cost remains robust at a cost of capital well below the development yield.”
Oracle Corporation (NYSE:ORCL) is a database management and cloud service provider.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is one of the 12 AI Stocks Making Waves on Wall Street. On December 22, Reuters reported that Nvidia has told its Chinese clients that it aims to start shipping its H200 AI chips to China before the Lunar New Year holiday in mid-February.
According to sources familiar with the matter, the AI chipmaker will fulfil initial orders from existing stock, with shipments anticipated to total 5,000 to 10,000 chip modules. This is equivalent to about 40,000 to 80,000 H200 AI chips.
Meanwhile, the company plans on adding new production capacity for the chips. Orders for the new capacity will open in the second quarter of 2026, the sources revealed.
While Nvidia is gearing up to export its second-most powerful AI chips to its Chinese clients, uncertainty still looms as Beijing is yet to approve any H200 purchases and the said timeline is contingent on government decisions.
“The whole plan is contingent on government approval. Nothing is certain until we get the official go-ahead.”
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
2. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 243
Alphabet Inc. (NASDAQ:GOOGL) is one of the 12 AI Stocks Making Waves on Wall Street. On December 16, BMO Capital raised its price target on the stock to $343.00 from $340.00 while maintaining an “Outperform” rating.
The firm remains confident in Google Cloud’s acceleration and long-term AI monetization following cloud-focused expert calls with former AWS employees.
One of the AWS employees holds direct visibility into $4.7B+ of annual cloud spending, the firm noted. Following these positive checks, it raised its growth estimates for Google Cloud to 39%/40% growth from previous projections of 38%.
BMO highlighted four key takeaways for the stock. These include expanding cloud commitments, AI agents supporting cloud commitments, Claude emerging as a preferred model among developers, and enterprise AI applications scaling in 2027.
“Key Takeaways: 1) Accelerating cloud commitments; 2) Agents supporting incremental cloud commitments; 3) Claude: The developer model of choice; 4) Enterprise AI apps to scale in 2027E. Reiterate Outperform and Top Pick; Raise Estimates and Target Price to $343 from $340.”
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 312
Microsoft Corporation (NASDAQ:MSFT) is one of the 12 AI Stocks Making Waves on Wall Street. On December 22, Wedbush reiterated the stock as “Outperform,” with a $625 price target. The firm believes that the stock is a “core winner,” likely to surprise Wall Street with the strength of its AI-driven growth.
“Microsoft remains a core winner in the IVES AI 30 list.”
Analyst Dan Ives said that investors have been underestimating the Azure growth story, remaining skeptical of Microsoft’s AI-led expansion as it heads into 2026.
“The Street is underestimating the Azure growth story in our view and AI driven shift about to happen in Redmond heading into 2026 making Microsoft one of our favorite large cap tech names to own over the coming year. Investors remain skeptical of Microsoft’s AI driven growth profile, which is setting the stage for [Satya] Nadella & Co. to prove the doubters wrong, as this hyperscaler cloud stalwart is in the sweet spot of enterprise strategic AI deployments.”
-Wedbush analyst Dan Ives wrote in a note to clients.
In contrast, the firm’s channel checks have been “incrementally strong” pertaining to the deployment of Azure and Copilot among Microsoft customers. This may push the company’s revenue in fiscal 2026 by another $25B.
“Our thesis remains that the cloud and AI monetization is going to comprise a bigger and bigger piece of Redmond going forward and will ultimately spur growth and margins over the coming years.”
Microsoft Corporation (NASDAQ:MSFT) provides AI-powered cloud, productivity, and business solutions, focusing on efficiency, security, and AI advancements.
While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT:12 Hot AI Stocks on Wall Street’s Radar and 12 AI Stocks in the Spotlight for Investors.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
