Global stocks slipped Wednesday as investors weighed divisions within the Federal Reserve and closely watched earnings that could test elevated valuations in the AI sector. The AI trade is at a critical turning point with all eyes on Broadcom and Oracle as they post earnings today after markets close.
The print for these two AI bellwethers will serve as barometers for AI-driven cloud infrastructure and custom chip demand.
“What they detail on capex intentions and future funding plans could resonate across the AI space, and there are clear risks they could miss on cloud infrastructure,” said Chris Weston, head of research at broker Pepperstone.
“The options market is pricing an earnings-day move of around -/+10%, so outsized volatility is certainly expected.”
A new summary of Fed members’ economic projections will also be unveiled.
“The end-of-2025 dots will show the still divided stance of the committee, and will reveal what [Chair Jerome] Powell was up against,” said analysts at ABN Amro, in a note. “The 2026 dots will likely be dispersed, with both substantial rate cuts, rate hikes, and everything in between, reflecting the uncertainty in the outlook.”
Meanwhile, the Wall Street Journal has reported that President Donald Trump is preparing to begin the final round of interviews related to the Federal Reserve’s leadership transition in the coming days.
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.
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12. Astera Labs, Inc. (NASDAQ:ALAB)
Number of Hedge Fund Holders: 57
Astera Labs, Inc. (NASDAQ:ALAB) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, H.C. Wainwright analyst Gus Richard raised the price target on the stock to $195.00 (from $175.00) and reiterated a “Buy” rating. The firm is optimistic on the stock as it sees ALAB poised for growth amid accelerating AI infrastructure trends.
According to the firm, Astera Labs is “well-positioned as the interconnect vendor of choice and rapidly growing its opportunity per rack”. Besides stronger growth per rack, Richard also sees future upside for the stock from NVLink Fusion and copackaged optics.
“We believe that ALAB is well positioned as the interconnect vendor of choice and rapidly growing its revenue opportunity per rack. Throughout CY26 ALAB will grow its Scorpio X revenue with increasingly larger switches in 2H:26. In CY27 its NVLink Fusion product will maintain if not grow its revenue per AI accelerator chip. Longer term ALAB is well positioned as copackaged optics move into the mainstream. We are lifting our PT to $195 on multiple expansion.”
Astera Labs, Inc. (NASDAQ:ALAB) is engaged in the design, manufacture, and selling of semiconductor-based connectivity solutions for cloud and AI infrastructure.
11. Confluent, Inc. (NASDAQ:CFLT)
Number of Hedge Fund Holders: 60
Confluent, Inc. (NASDAQ:CFLT) is 12 Hot AI Stocks on Wall Street’s Radar. On December 9, Bernstein reiterated an “Outperform” rating on the stock with a $31.00 price target. The rating affirmation follows IBM’s announcement to acquire the company for $11 billion.
IBM announced Monday that it is acquiring data streaming platform Confluent. According to the release, the company will pay $31 per share in cash for all of the issued and outstanding common shares of Confluent.
In this regard, Bernstein commented how Confluent has long been an acquisition target owing to its relatively low multiple and strong market position.
Its attraction as a target deepened further after OpenAI committed to using the company’s leading open-source middleware technology, particularly Kafka and Flink, for its next-generation model infrastructure.
Bernstein noted that Confluent’s technology holds particular importance also because generative AI is more easily delivered in Cloud Native technology, such as web or mobile apps commonly built for Java VMs. The company also enjoys a very tight correlation to AWS, reinforcing its position in the tech landscape.
Confluent, Inc. (NASDAQ:CFLT) is a technology company that provides data streaming platforms.
10. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 66
International Business Machines Corporation (NYSE:IBM) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, Stifel analyst David Grossman raised the firm’s price target on the stock to $325 from $295 and kept a “Buy” rating on the shares.
The rating affirmation follows IBM’s announcement that it has acquired Confluent for $11 bn, expanding its AI platform and aligning with its hybrid cloud strategy.
“IBM announced the acquisition of Confluent for $11bn (all cash), or ~7x CY27 EV/revenue, in-line with software comps with a similar growth profile (5–9x) and a 34% premium to Friday’s close (12/05/25). Expected close mid-2026, coincidentally the anniversary of the z17 mainframe launch (similar revenue profile).”
The firm noted how CFLT runs the Apache Kafka open source data streaming platform, serving as the standard for real-time data transportation connection. While the company has penetrated 40% of Fortune 500 companies, less than 5% of its 6,500 customers generate over $1 million in annual recurring revenue.
Stifel believes that the strategic underpinnings of the acquisition are solid, and that real-time data streaming is becoming increasingly important for supporting AI use cases.
“IBM historically gets optimal leverage from targets that have challenges penetrating large enterprises and significant potential cost synergies. We estimate the acquisition is modestly dilutive to 2026 FCF (~1%) and neutral/accretive thereafter. We estimate modest EPS dilution (less than 3%) in 2026/2027 due to SBC; however, our analysis excludes any potential revenue synergies.”
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.
9. Ciena Corporation (NYSE:CIEN)
Number of Hedge Fund Holders: 70
Ciena Corporation (NYSE:CIEN) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 8, Needham raised its price target on the stock to $240.00 from $130.00 while maintaining a “Buy” rating.
The price target rating comes ahead of fiscal fourth-quarter earnings report on December 11 before markets open. Rising hyperscale AI capital expenditure and positive momentum in the telecommunications industry has led to strong demand for both Cloud and Telecom sectors for Ciena.
“Ahead of CIEN’s F4Q earnings, our industry checks indicate broad, strong demand in both Cloud and Telco, driven by rising hyperscale AI capex and positive momentum in Telco. As the industry leader in both plugs and line systems, we remain positive on CIEN heading into F26 and expect upside to 4Q results and F26 guidance.”
-Analysts led by Ryan Koontz.
Analyst sees modest upside versus consensus estimates and increased beats moving through fiscal 2026. This is supported by the company’s impressive backlog and continued network investment trends. Overall, the firm is optimistic on Ciena’s ability to sustain its strong competitive position and global market share.
Ciena Corporation (NYSE:CIEN) is a telecommunications hardware and software provider.
8. Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 77
Marvell Technology, Inc. (NASDAQ:MRVL) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, Stifel maintained its Buy rating on the stock with a $114.00 price target. Firm analysts addressed recent market rumors as baseless, reaffirming confidence in the company’s ASIC platform positioning.
Defending the company’s platform status against recent noise, the firm noted that the speculation that Marvell could lose its XPU socket to a competitor for “second and larger ASIC customer are without merit.”
“We believe news reports that Marvell could lose its XPU socket to a competitor for its second and larger ASIC customer are without merit. We also believe reports from the market landscape yesterday suggesting Marvell is not participating in its lead ASIC customer’s next generation platform are misleading.”
Citing The Information’s report that Microsoft was in talks to switch to Broadcom from Marvell for its custom chip business, the firm noted that such a move wouldn’t match typical design cycles. This is because it would take three to four years to develop the chips.
“We believe the timeline of this speculation is misaligned with this reality. Any hypothetical partner switch discussions actively occurring would not be meaningfully impactful to revenue until FY29 at the earliest.”
-Analyst Tore Svanberg.
The firm also pushed back on Benchmark’s claims that Marvell is at risk of losing business to provide the design for Amazon’s Trainium 3 and 4 chips. The firm noted that even though the company may not have the exact level of content in the new-generation chips as it did in Trainium 2, the company’s guidance appeared solid anyway.
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.
7. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 102
Vertiv Holdings Co (NYSE:VRT) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, Wolfe Research downgraded the stock from Outperform to “Peerperform” without a price target. After an extended period of outperformance, the firm sees a balanced risk-reward profile for the stock.
Wolfe Research noted that this is the first time that they are not recommending the stock since December 2022. Analysts noted that after a period of outperformance, “the stock now looks balanced in our bull vs. bear skews.”
“VRT has been the top-performing EE/MI stock over the past 3 years. Since we upgraded to OP rating in Dec-2022, the stock has risen ~14x with the NTM P/E multiple re-rating from ~13x to ~36x, on an EPS base that has quadrupled over that time frame. This has been a remarkable story.”
Vertiv Holdings Co (NYSE:VRT) is a global provider of digital infrastructure technology and services for data centers, communication networks, and commercial and industrial facilities.
6. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 105
Micron Technology, Inc. (NASDAQ:MU) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, HSBC initiated coverage of the stock with a “Buy” rating and a $330 price target. The firm believes that Micron enjoys tech leadership and benefits from robust AI-related memory tailwinds.
“Micron’s share price is up 172% [year-to-date], outperforming the NASDAQ (up 22%) but recently the share price has been subdued as the market appears overly concerned about financial risks from [neo-cloud service providers], and the Stargate Project; we believe that [cloud service providers] which invest with their own EBITDA will maintain their strong capex implementation. We see it as a good time to accumulate the stock.”
– HSBC analyst Ricky Seo wrote in a note to clients.
Seo anticipates Micron to benefit from a 4-to-5-year-long upcycle instead of the 2-3 year cycle that it has historically enjoyed. This cycle will be boosted by factors such as incremental AI spending from neo-cloud service providers, Stargate Project and the major cloud service providers. Meanwhile, limited capacity should curb any output growth.
DRAM and NAND markets are also anticipated to grow, with Micron being a prime beneficiary.
“We expect the DRAM and NAND markets to grow 69% and 62% [year-over-year] respectively, in 2026e; Micron will be one of the key beneficiaries.”
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, UBS analyst David Vogt reiterated a Neutral rating on the stock with a $280.00 price target. Firm analysts hold a neutral stance on the stock due to slowing App Store growth momentum and tough December comps despite FX tailwind.
Based on data from Sensor Tower, Apple’s App Store revenue in November grew an estimated 6% on a reported basis. This growth follows a growth of roughly 7% and 9% in September and October, respectively.
On a Foreign Exchange Neutral basis, App Store revenue increased an estimated 5% year-over-year since currency was a tailwind. The firm further noted that App Store faces an estimated 12% comparison hurdle in December. This is lower than the mid-teens comparisons from recent months but is still “not an easy hurdle in our view.”
“On a QTD basis, reported App Store is tracking at ~7% (~6% FXN). Therefore, we estimate that reported App Store will have to grow in the mid-teens for Dec-25 quarter growth to reach at least double-digits.”
Apple is a technology company known for its consumer electronics, software, and services.
4. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 119
Salesforce, Inc. (NYSE:CRM) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 5, Cantor Fitzgerald reiterated an “Overweight” rating on the stock with a $325.00 price target. The rating affirmation comes as the company clarifies its pricing strategy, formalizing and maturing its approach.
Management’s approach will likely address customer concerns about opacity that had emerged in customer and partner conversations, analysts noted. The company has structured its pricing strategy into three categories.
These include seat-based SKUs (Agentforce 1 Editions), pay-as-you-go and pre-commit options, and newer offerings such as Flex Credits and Agentic Enterprise License Agreements (AELA).
The said pricing tiers align with the typical customer lifecycle for AI-powered platform Agentforce. According to Cantor, 16 AELAs are currently in production that have an average incremental Annual Recurring Revenue exceeding $1 million each. Moreover, 10-20 new opportunities are added to the pipeline weekly.
Salesforce, Inc. (NYSE:CRM) is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce.
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 120
Tesla, Inc. (NASDAQ:TSLA) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, Piper Sandler analyst Alexander Potter reiterated an “Overweight” rating on the stock with a $500 price target. Firm analysts remain optimistic on the stock, noting significant progress in Tesla’s Full Self Driving tech driving increased investor interest.
Piper Sandler believes Tesla is “getting very close to unsupervised FSD.” This means that drivers may be able to use the system without monitoring or intervention.
Citing data from a designer of the FSD Community Tracker, which is a website that gauges the efficacy of Tesla’s FSD software, analysts noted sharp improvements in performance metrics.
In particular, the tracker’s core metric, known as the miles to critical disengagement, “exhibited a >20x improvement after FSD v14.1.x was released in October (from 441 miles in the previous version to 9200+ miles).”
The marks the largest improvement observed in four years of data collection, analysts noted.
“The tracker’s core metric, referred to as ‘miles to critical disengagement’, exhibited a >20x improvement after FSD v14.1.x was released in October (from 441 miles in the previous version to 9200+ miles). This was the biggest sequential improvement in four years of data collection. This, in addition to a subsequent down-tick in performance (v14.2.x), has sparked a recent increase investor interest.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
2. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 183
Broadcom Inc. (NASDAQ:AVGO) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, Rosenblatt analyst Kevin Cassidy raised the firm’s price target on the stock to $440 from $400 and kept a “Buy” rating on the shares.
The rating affirmation, which comes as part of an earnings preview, reflects expectations for upside from strong TPU/XPU traction and infrastructure tailwinds. Rosenblatt believes that Broadcom will beat estimates driven by accelerating shipments of TPU and additional traction with XPU. It also anticipates revenue upside from the networking business as data center networks expand.
“Based on our increased estimates we are lifting our 12-month price target to $440 and maintain our Buy recommendation.”
The company is expected* to report earnings on 12/11/2025 after market close.
Broadcom is a technology company uniquely positioned in the AI revolution owing to its custom chip offerings and networking assets.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is one of the 12 Hot AI Stocks on Wall Street’s Radar. On December 9, UBS reiterated its “Buy” rating on the stock with a $235.00 price target. The rating affirmation reflects firm optimism following reports that the company may receive permission to export certain AI chips to China.
“Reuters reported today that the US Commerce Department is considering allowing Nvidia to export Hopper H200s to China, while exports of Blackwell generation are likely off the table for now. We are not particularly surprised as we discussed on our previous notes (here and here) that it was likely that negotiations on NVDA shipments will continue given China AI compute market opportunity and limited internal supply.”
The firm believes that Nvidia’s approval will only level the playing field. This is because AMD has already secured licenses to ship its MI308 chips to China, discussing a potential 15% tax payable to the U.S. government on these shipments.
The firm sees Nvidia well-positioned for $50B+ AI TAM in 2025.
“We previously estimated the domestic China AI market at ~2MM units and NVDA estimated China TAM at $50B/yr in CY2025. Based on estimates from the US government (here and here), we continue to believe that domestic alternatives may only be able to supply something in the range of $10B or ~20% of the total market, while remaining ~80% to be supplied by global vendors (NVDA, AMD).”
NVIDIA Corporation (NASDAQ:NVDA) specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.
While we acknowledge the potential of NVDA 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 NVDA and that has 100x upside potential, check out our report about this cheapest AI stock.
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