In this article, we will look at the 12 AI Stocks Wall Street Is Watching Now: Nvidia, Micron, and More.
Wedbush’s Dan Ives told CNBC’s Squawk Box on Monday that the Nasdaq will rise to 30,000 points in the next year. He asserted that a strong earnings momentum will continue to fuel investor enthusiasm for AI stocks.
Earlier in the year, investor anxiety regarding the AI trade rose to a troubling level, with many treating AI bubble as a top global risk. According to a Bank of America Global Fund Manager Survey, a record number of investors believe that the AI bubble is a primary risk.
However, a strong tech earnings season has seemingly calmed down these jitters.
“These earnings have validated the AI bullish thesis,” Ives said. “Demand and supply is 10-1 for chips. We are in the early days still of the AI revolution. The haters will hate, and we know that.”
Ives believes that the AI rally is yet to continue for another two years. It’s the memory super-cycle, he noted, discussing the demand for memory chips ignited by a rapid AI infrastructure buildout.
“It’s about playing the hyperscalers — of course chips, then you have to play software, cybersecurity, infrastructure [and] power. You can’t just own one subsector, you have to own the derivative plays,” Ives said.
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 Q4 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
12. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 33
Arm Holdings has drawn renewed interest from KeyBanc as the firm sees robust AI and data center demand accelerating licensing growth. The stock is twelfth on our list of 12 AI Stocks Wall Street Is Watching Now.
On May 7, KeyBanc analyst John Vinh raised the price target on Arm Holdings to $300 from $170 and maintained an Overweight rating. The company reported results for the fourth quarter and fiscal year ended 2026, having a record quarterly revenue of $1.49 billion driven by robust demand for cloud AI solutions.
Despite FQ4 revenue and EPS exceeding expectations, Keybanc noted mixed results for the semiconductor company. Licensing revenue beat forecasts, a big portion of Arm’s revenue. The company licenses its technology to companies such as Nvidia and Apple, collecting royalty payments on design use.
However, it missed on royalty revenue due to a contraction in smartphone Total Addressable Market. This was mainly due to memory shortages and higher prices. KeyBanc noted ARM guiding 20% year-over-year royalty growth in the fiscal first quarter. This growth is driven by the migration to Armv9, CSS, and Data Center, noted the firm, which doubled in revenues again.
ARM also indicated it sees $2B in demand for its AGI CPU in FY28, vs. its $1B outlook, but is supply constrained currently and unable to meet demand. Despite mixed results, we raise ests and our PT to $300 due to licensing upside DC drivers.
Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and licenses semiconductor technology and related products.
11. Snap Inc (NYSE:SNAP)
Number of Hedge Fund Holders: 52
Another one of the AI Stocks Wall Street Is Watching Now is Snap Inc., with analysts looking at its AI infrastructure plans, improving growth metrics, and robust momentum in direct sales.
On May 7, Bernstein SocGen Group analyst Mark Shmulik reiterated a Market Perform rating and $7.00 price target on the stock. According to the firm, Snap is facing some complex challenges despite improvements in some of its key metrics.
If you want attention in this tape, announcing an Allbirds-like AI transformation might do the trick. As it stands, the self-described “crucible moment” for Snapchat remains incredibly complex.
While Snap may be trying to reframe its story around AI, the firm believes that its current position remains rather complicated because of metrics such as US and EU DAUs, ad revenues, and GAAP profitability, which continue to lag.
This is despite other metrics, such as revenue, global users, and FCF growth, having improved for the company.
The strongest part of Snapchat’s business appears to be its ability to grow direct sales, noted the firm, which now account for almost 20% of revenues. Even though this isn’t the primary business it wanted, Bernstein believes that it may be the business it is best suited to deliver.
Snap Inc (NYSE:SNAP), based in California, is a technology and social media company founded in 2011.
