In this article, we will discuss the 13 Most Promising AI Stocks to Buy Now.
As per BlackRock, AI and geopolitics are 2 of the most influential forces that have been shaping the global markets in 2025, and the momentum can continue to accelerate. As AI gets smarter, power demand, labor market, and capital expenditure can be the areas on the watchlist, providing growth opportunities throughout the full AI value chain. Furthermore, the geopolitical fragmentation continues to rapidly change the landscape for tech, infrastructure, defense spending, and the dollar, offering opportunities for investors.
Key Trends Impacting the Broader AI Industry
J.P. Morgan Wealth Management highlighted that AI capital spending continues to increase among the hyperscalers, a move with inherent risks. As per the firm, the AI theme possesses immense potential to disrupt industries. The firm, while highlighting Census Bureau data, noted that the AI adoption and expectations have doubled in the past year, fueling market shifts.
Furthermore, Goldman Sachs Research highlighted that the next milestone in the development of Generative AI would be the unlocking of business productivity via AI agents capable of performing sequences of actions. As per the firm, this transition can expand the software market over the upcoming years.
Amidst such trends, we will now have a look at the 13 Most Promising AI Stocks to Buy Now.
Our Methodology
To list the 13 Most Promising AI Stocks to Buy Now, we sifted through several online rankings and shortlisted the stocks catering to the broader AI space. Next, we chose the ones popular among hedge funds. Finally, the stocks were arranged in the ascending order of their hedge fund sentiments, 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).
13 Most Promising AI Stocks to Buy Now
13. GLOBALFOUNDRIES Inc. (NASDAQ:GFS)
Number of Hedge Fund Holders: 31
GLOBALFOUNDRIES Inc. (NASDAQ:GFS) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs began coverage of the company’s stock with a “Neutral” rating and a price objective of $40, as reported by The Fly. The firm initiated on the US semiconductor capital equipment, storage, and foundry sectors with a balanced view. The semiconductor capital equipment industry remains in mid-cycle, and headwinds and tailwinds continue to create relatively stable revenue dynamics, added the firm’s analyst. According to Goldman Sachs, China exhibits more opportunity than threat for companies.
GLOBALFOUNDRIES Inc. (NASDAQ:GFS) announced plans to invest $16 billion to expand its semiconductor manufacturing and advanced packaging capabilities. This investment is a response to strong growth in AI. The AI revolution continues to drive strong, durable demand for the company’s technologies that enable futuristic datacenters, including GLOBALFOUNDRIES Inc. (NASDAQ:GF)’s leading silicon photonics and GaN for power applications. GLOBALFOUNDRIES Inc. (NASDAQ:GFS) also announced a definitive agreement to acquire MIPS, which is a leading supplier of AI and processor IP. MIPS will be bringing a strong heritage of delivering efficient, scalable compute IP, which is tailored for performance-critical applications and strategically aligns with the increasing demands of AI platforms.
GLOBALFOUNDRIES Inc. (NASDAQ:GFS) is a leading player in the broader AI space because it enables the production of specialized AI processors and plays a key role in the AI hardware supply chain.
12. CoreWeave, Inc. (NASDAQ:CRWV)
Number of Hedge Fund Holders: 36
CoreWeave, Inc. (NASDAQ:CRWV) is one of the Most Promising AI Stocks to Buy Now. Needham downgraded the company’s stock from “Buy” to “Hold,” highlighting the valuation concerns despite the strategic benefits of the announced CORZ acquisition. The firm’s analysts opine that the acquisition can unlock between 150MW and 200MW of additional IT capacity, which is valuable for CoreWeave, Inc. (NASDAQ:CRWV)’s growing high-performance computing as well as AI workloads.
That being said, Needham is of the view that most of the benefits are already priced into CoreWeave, Inc. (NASDAQ:CRWV)’s stock, leading to the downgrade. The demand for CoreWeave, Inc. (NASDAQ:CRWV)’s platform remains strong and has been accelerating, with AI leaders seeking the highly performant AI cloud infrastructure needed for the most advanced applications. In Q1 2025, the company’s revenue backlog came in at $25.9 billion as of March 31, 2025.
The critical customer wins throughout AI labs, hyperscalers, and enterprises include a strategic deal with OpenAI, adding $11.2 billion in revenue backlog. Furthermore, the company saw rapid scaling of its purpose-built AI Infrastructure, which includes the addition of new compute capacity, totalling ~420 MW of active power and ~1.6 GW of contracted power at the end of the quarter.
11. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 49
NXP Semiconductors N.V. (NASDAQ:NXPI) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs initiated coverage on the company’s stock with a “Buy” rating and a price objective of $276.00. The firm identifies NXP Semiconductors N.V. (NASDAQ:NXPI) as the leading global company in automotive processors, including in China. While Goldman Sachs has acknowledged that visibility throughout the automotive and industrial end markets is limited, it suggested that the magnitude of the downturn in microcontroller units (MCUs) and other segments offers numerous opportunities for a cyclical recovery.
NXP Semiconductors N.V. (NASDAQ:NXPI)’s through-cycle margin expansion potential via operational improvements was cited as one of the factors aiding the favourable outlook from the firm. The company entered into a definitive agreement to acquire Kinara, Inc., which is an industry leader in high-performance, energy-efficient, and programmable discrete neural processing units (NPUs). Such devices enable a wide range of edge AI applications, which include multi-modal Gen AI models.
This acquisition can enhance and strengthen NXP Semiconductors N.V. (NASDAQ:NXPI)’s ability to offer complete and scalable AI platforms, from TinyML to Generative AI. This can be done by bringing discrete NPUs and robust AI software to NXP Semiconductors N.V. (NASDAQ:NXPI)’s portfolio of processors, connectivity, security, and advanced analog solutions.
NXP Semiconductors N.V. (NASDAQ:NXPI) is a leading company in the broader AI industry as it offers a robust edge-AI ecosystem.
10. Seagate Technology Holdings plc (NASDAQ:STX)
Number of Hedge Fund Holders: 55
Seagate Technology Holdings plc (NASDAQ:STX) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs initiated coverage on the company’s stock with a “Buy” rating and a price objective of $170.00. The firm highlighted Seagate Technology Holdings plc (NASDAQ:STX)’s technological leadership, mainly with respect to its HAMR-based drives, which can help it regain nearline HDD market share. Elsewhere, Mizuho upped the price target on Seagate Technology Holdings plc (NASDAQ:STX)’s stock to $155 from $130, noting that HAMR ramps are driving better ASPs and GMs, with demand looking robust into 2026E amidst increased capacity drives.
Furthermore, Mizuho also added that Seagate Technology Holdings plc (NASDAQ:STX) continues to benefit from robust HAMR leadership/ramp, and added that large language models, such as GPT-5, continue to fuel AI server demand. Seagate Technology Holdings plc (NASDAQ:STX) highlighted that technology innovation and AI continue to fuel exponential data growth and drive demand for the hard drive storage industry. The company remains well-placed to capture this opportunity with its Mozaic portfolio powered by market-leading HAMR technology.
Seagate Technology Holdings plc (NASDAQ:STX) happens to be an AI-focused business by developing purpose-built hard drives such as SkyHawk AI.
9. Microchip Technology Incorporated (NASDAQ:MCHP)
Number of Hedge Fund Holders: 56
Microchip Technology Incorporated (NASDAQ:MCHP) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs began coverage on the company’s stock with a “Buy” rating and a price objective of $88.00. The firm sees Microchip Technology Incorporated (NASDAQ:MCHP) as a leading global supplier of microcontrollers and analog products throughout diverse markets. This places the company for growth as the sector sees recovery. As per the firm, the microcontroller market remains in the early stages of a recovery. It is presently shipping at levels that are well below end demand, which creates growth potential that can surpass Wall Street estimates.
The strong growth of AI has been transforming data centers, which creates an unprecedented demand for high-performance, secure, reliable, and innovative solutions. Microchip Technology Incorporated (NASDAQ:MCHP) remains focused on addressing such evolving market needs through developing advanced technologies for data center connectivity, storage, and data retrieval. From accelerating high-speed connectivity as well as storage rates to optimizing power and management systems, Microchip Technology Incorporated (NASDAQ:MCHP) believes that its innovations support next-generation AI workloads and provide scalability for customers.
ClearBridge Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Also within the IT sector, we added Microchip Technology Incorporated (NASDAQ:MCHP), which supplies analog and mixed-signal microprocessors for use in the automotive, industrial, computing and other industries. We took advantage of recent weakness in the stock to add to the position. We believe that the return of the company’s prior CEO and efforts to rebuild relationships with customers has resulted in Microchip recovering market share to prior levels, and that it represents an attractive cyclical improvement story with asset optimization improvements and good business visibility.”
8. Cadence Design Systems, Inc. (NASDAQ:CDNS)
Number of Hedge Fund Holders: 59
Cadence Design Systems, Inc. (NASDAQ:CDNS) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs initiated coverage of the company’s stock with a “Buy” rating and a price objective of $380, as reported by The Fly. The firm believes that Cadence Design Systems, Inc. (NASDAQ:CDNS) is one of the most high-quality compounding businesses in its coverage universe. Furthermore, it noted the company’s exposure to multiple growth drivers across the semiconductor industry.
The firm initiated the US digital semiconductor and electronic design automation software group, highlighting that it remains constructive on merchant silicon and EDA vendors tied to AI-related capital spending. As per the firm analyst, the AI investment cycle is in a transition state, but it can sustain growth from current levels. Cadence Design Systems, Inc. (NASDAQ:CDNS)’s core EDA revenue increased 16% YoY in Q1 2025. AI-driven Cadence Cerebrus saw strong momentum with ~50 new logos in the quarter. Cadence Design Systems, Inc. (NASDAQ:CDNS)’s resilient software business model, healthy backlog, and AI-driven product innovations place it well in navigating the dynamic macro environment.
As the fast-evolving AI landscape continues to expand the market opportunities and reshape the entire chip and system development process, the company’s Cadence.AI portfolio provides unparalleled PPA, productivity, and time-to-market benefits.
Cadence Design Systems, Inc. (NASDAQ:CDNS) provides electronic design automation (EDA) software, which is used in designing and optimizing AI chips and systems. Rothschild & Co Wealth Management, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“In the first quarter we made two new investments, building positions in semiconductor design software provider Cadence Design Systems, Inc. (NASDAQ:CDNS) and leading aerospace company General Electric Aerospace. No divestments were made, leaving the portfolio with 25 ownership stakes.
Cadence, alongside its peer Synopsis, is the leading provider of software used to design semiconductor chips, also known as electronic design automation (EDA) software. Together, they control over two thirds of their target market. EDA solutions are absolutely mission critical to the semiconductor industry – particularly as chip complexity increases further – yet they only account for a small share of customer spend. This, coupled with an increased focus on value based pricing, positions Cadence well for further sales growth in the double digits and continued meaningful margin improvements. What’s more, the majority of sales are delivered via recurring subscriptions, thus providing strong visibility on future revenues, its notoriously volatile end market notwithstanding. The recent pullback allowed us to build a position in a business with durable double digit growth at just over 30x one year forward earnings.”
7. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders: 61
KLA Corporation (NASDAQ:KLAC) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs analyst James Schneider initiated coverage of the company’s stock with a “Neutral” rating and a price objective of $980. The firm initiated on the US semiconductor capital equipment, storage, and foundry sectors and has a balanced view. While the firm expects more downside than upside risks, it sees stable revenue through 2026. The strong growth of AI technologies continues to fuel unprecedented demand for advanced semiconductors. Furthermore, this trend is favorable for KLA Corporation (NASDAQ:KLAC), with AI applications requiring complex and precise semiconductor manufacturing processes.
Notably, the company’s process control and yield management solutions remain important for producing the high-performance chips required for AI systems. Moving forward, with AI penetrating numerous industries, spanning data centers to edge computing devices, the demand for KLA Corporation (NASDAQ:KLAC)’s advanced tools is expected to grow, leading to expanded market opportunities, higher revenue, and increased profit margins.
Parnassus Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“We also added several new positions, including two in Information Technology: Workday, a category leader for enterprise cloud applications for finance and human resources, and KLA Corporation (NASDAQ:KLAC), a leader in semiconductor process control. KLA, a leader in semiconductor process control, benefits from inherently high switching costs, structurally higher demand for advanced semiconductors and increasingly complex semiconductor manufacturing. The company has a strong management team that is positioning it well for long-term growth. Concerns about weaker demand in China have impacted KLA’s stock price recently, but we believe the secular growth in other regions could offset the risk in the longer term.”
6. Synopsys, Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 67
Synopsys, Inc. (NASDAQ:SNPS) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs analyst James Schneider initiated coverage of the company’s stock with a “Buy” rating and a price objective of $620, as reported by The Fly. The firm initiated a US digital semiconductor and electronic design automation software group, and is constructive on merchant silicon and EDA vendors tied to AI-associated capital spending. The analyst also highlighted that the AI investment cycle remains in a state of transition. That being said, it can sustain growth from present levels.
Goldman Sachs highlighted that a broadening customer base continues to drive outsized growth in Synopsys, Inc. (NASDAQ:SNPS)’s intellectual property franchise, with physical electronic design automation (EDA) demonstrating a meaningful growth opportunity. Synopsys, Inc. (NASDAQ:SNPS) believes that the mega trends of AI, software-defined systems, and silicon proliferation are driving its growth. The company announced its ongoing close collaboration with Samsung Foundry in order to power the next generation of designs for advanced edge AI, HPC, and AI applications.
Notably, the adoption of Edge AI applications continues to drive the need for advancements in semiconductor technologies to allow complex computational tasks, improve efficiency, and enhance AI capabilities throughout industries and applications.
Synopsys, Inc. (NASDAQ:SNPS) is a critical player in the broader AI landscape because it developed Synopsys.ai, which is a full-stack, AI-driven EDA suite using reinforcement learning and Gen AI. Parnassus Investments, an investment management company, released the Q1 2025 investor letter. Here is what the fund said:
“Synopsys, Inc. (NASDAQ:SNPS), a provider of semiconductor design software, experienced a similar investor reaction as other semiconductor and technology-focused companies during the quarter, as tariffs, inflation and AI concerns weighed on sentiment.
Synopsys is a leader in electronic design automation, operating in a consolidated software market characterized by high switching costs. We believe the company’s acquisition of Ansys, coupled with its extensive intellectual property profile, will enhance its competitive edge as semiconductor design grows more complex, AI accelerators proliferateand non-semiconductor companies develop their own specialized chips.”
5. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 69
Texas Instruments Incorporated (NASDAQ:TXN) is one of the Most Promising AI Stocks to Buy Now. TD Cowen upgraded the company’s stock to “Buy” from “Hold” with a price objective of $245, up from the prior target of $200, as reported by The Fly. The firm added confidence that the industrial semiconductor de-stocking has been ending. Texas Instruments Incorporated (NASDAQ:TXN) remains well-positioned to outperform in either a sharp or gradual recovery, added the firm’s analyst. The firm also added that the company’s U.S.-based manufacturing provides it with an edge as demand stabilizes.
Texas Instruments Incorporated (NASDAQ:TXN) has also announced that it is working with NVIDIA to develop power management and sensing technologies for 800V high-voltage direct current (HVDC) power distribution systems for the data center servers. Notably, the new power architecture enables more scalable and reliable next-gen AI data centers. NVIDIA and Texas Instruments Incorporated (NASDAQ:TXN) have the same goal to revitalize US manufacturing through building more of the infrastructure for AI factories. NVIDIA’s CEO remains optimistic about continuing the collaboration with the company by developing products for advanced AI infrastructure.
Overall, growth in the broader AI industry is expected to continue to drive demand for Texas Instruments Incorporated (NASDAQ:TXN)’s analog and embedded chips, critical for power management, sensing, as well as connectivity in AI-driven systems such as data centers and industrial automation. Mairs & Power, an investment advisor, released its Q1 2025 investor letter. Here is what the fund said:
“Our preference for stable cash flow companies led to additional outperformance in the sector, with heavy overweights to Texas Instruments Incorporated (NASDAQ:TXN) and Motorola Solutions (MSI) benefiting relative returns. Texas Instruments has been on a multi-year business transition, investing heavily in semiconductor manufacturing facilities which are based in the U.S. Domestic facilities combined with general industrial end market weakness has kept the company from experiencing the same excitement as many of the other semiconductor companies.”
4. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 79
Analog Devices, Inc. (NASDAQ:ADI) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs initiated coverage of the company’s stock with a “Buy” rating and a price objective of $285, as reported by The Fly. The firm initiated the US analog and radio frequency semiconductor sector with a relatively bullish outlook, noting the cyclical opportunities it expects. As per the analyst, the analog industry is expected to move towards trendline shipments over the upcoming 12-18 months. Furthermore, the firm remains most bullish on companies that are shipping furthest below trend and the ones that have managed supply chains well.
Goldman Sachs analyst James Schneider exhibited confidence and believes that, despite uncertain near-term macroeconomic conditions, Analog Devices, Inc. (NASDAQ:ADI) can continue to deliver strong growth, margin generation, and FCF generation relative to its peers. This view is aided by Analog Devices, Inc. (NASDAQ:ADI)’s solid financial health.
Furthermore, the analyst noted the company’s competitive differentiation and opines that this key factor can enable it to maintain and potentially enhance its market presence, primarily as the China market is becoming increasingly competitive. Analog Devices, Inc. (NASDAQ:ADI)’s commitment to innovation and customer success enables it to continue to extend its leadership at the increasingly AI-driven Intelligent Edge.
Analog Devices, Inc. (NASDAQ:ADI) supports AI by offering high-precision sensors, signal processing, as well as low-power chips, allowing data collection as well as edge computing for AI applications.
Aristotle Atlantic Partners, LLC, an investment advisor, released its Q1 2025 investor letter. Here is what the fund said:
“Analog Devices, Inc. (NASDAQ:ADI) is a global semiconductor leader dedicated to solving customers’ most complex engineering challenges. The company delivers innovations that connect technology to human breakthroughs and play a critical role at the intersection of the physical and digital worlds by providing the building blocks to sense, measure, interpret, connect and power. Analog designs, manufactures, tests and markets a broad portfolio of solutions. These solutions include integrated circuits, software and subsystems that leverage high-performance analog, mixed-signal and digital signal processing technologies. Its comprehensive product portfolio, deep domain expertise and advanced manufacturing span high-performance precision and high-speed mixed-signal, power management and processing technologies, including data converters, amplifiers, power management, radio frequency, integrated circuits, edge processors and other sensors. The company’s customers include original equipment manufacturers and customers that build electronic subsystems for integration into larger systems.
We see the company’s analog products providing exposure to high-growth trends, including automotive electrification and driver assistance systems, factory intelligence and automation, the Intelligent Edge, Internet of Things device proliferation and sustainable energy. We expect the company to return excess free cash flow, benefiting shareholders.”
3. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 83
Applied Materials, Inc. (NASDAQ:AMAT) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs initiated coverage on the company’s stock with a “Buy” rating and a price objective of $225.00. As per the firm, Applied Materials, Inc. (NASDAQ:AMAT) remains well-positioned to benefit from the semiconductor industry’s ongoing pivot towards 3D architectures, which need more intensive etching and deposition processes. Furthermore, the firm noted that the company has established a portfolio of critical equipment tools.
Even though the firm acknowledges that competition from Chinese manufacturers is intense in the broader semiconductor equipment space, it believes that the market share gains of these competitors will mainly be limited to serving the local Chinese demand. As per Applied Materials, Inc. (NASDAQ:AMAT), high-performance, energy-efficient AI computing is the dominant driver of semiconductor innovation, while it remains focused on accelerating the industry’s roadmap. Amidst a highly dynamic macro environment, Applied Materials, Inc. (NASDAQ:AMAT)’s broad capabilities and connected product portfolio continue to drive healthy results in 2025.
Applied Materials, Inc. (NASDAQ:AMAT) delivered strong Q2 2025 results, with healthy YoY revenue growth, gross margin expansion, and record EPS. These results were aided by increased leading-edge foundry-logic investments, considering the strong end-market demand for AI-enabling semiconductors. Notably, the large-scale deployment of AI would need major advances in computing performance and energy efficiency, which can only be achieved by disruptive innovation throughout the technology stack.
Applied Materials, Inc. (NASDAQ:AMAT) is a critical enabler of AI by offering the advanced semiconductor manufacturing equipment required to produce AI chips as well as high-performance computing hardware.
Vltava Fund, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials, Inc. (NASDAQ:AMAT) and Lam Research. Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Applied Materials provides manufacturing equipment, services, and software for the semiconductor, display, and related industries. Its principal business activities are semiconductor systems and Applied Global Services. Its largest customers are Samsung and Taiwan Semiconductors, but its overall clientele is more diversified than is that of Lam Research. At first glance, it would appear that Applied Materials has a somewhat less tangible and definable competitive advantage compared to KLA Corporation and Lam Research, but the numbers do not support such a view. Net margins likewise in the neighborhood of 27% and ROCE around 30% are outstanding. Basically, it can be said that all three companies we own have very similar underlying profitability metrics. Even their valuations, growth, and potential are similar. All have strong free cash flow and strong balance sheets, and they are regularly buying back their own shares over the long term and in large volumes…” (Click here to read the full text)
2. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 91
Lam Research Corporation (NASDAQ:LRCX) is one of the Most Promising AI Stocks to Buy Now. Goldman Sachs initiated coverage on the company’s stock with a “Buy” rating and a price objective of $115.00. The firm cited the company’s high relative exposure to deposition and etch processes as the key factors. These are the areas where intensity can increase in semiconductor manufacturing, added the firm. Furthermore, it noted that Lam Research Corporation (NASDAQ:LRCX) has a leading share of NAND equipment upgrades, positioning it to benefit as NAND suppliers emphasize upgrading the existing equipment instead of adding new capacity.
Also, the firm anticipates Lam Research Corporation (NASDAQ:LRCX) to outperform its peers as the broader NAND market sees recovery from a low base. The company can benefit disproportionately from this recovery, added Goldman Sachs. The firm also cited Lam Research Corporation (NASDAQ:LRCX)’s market leadership in High Bandwidth Memory (HBM) as an additional factor that can augment the performance. The company’s integration of AI in its own service offerings, like predictive maintenance and the Dextro Cobot, exhibits its commitment to leveraging AI for operational improvements. Apart from enhancing the value proposition to customers, it also positions Lam Research Corporation (NASDAQ:LRCX) to capitalize on the growing intersection between AI and semiconductor manufacturing.
The acceleration of AI technologies can fuel demand for advanced semiconductor devices and can ramp up the need for Lam Research Corporation (NASDAQ:LRCX)’s cutting-edge fabrication tools, mainly those important for TSV (Through-Silicon Via) formation, as well as advanced packaging processes important for AI chip production.
Lam Research Corporation (NASDAQ:LRCX) is an AI-business enabler that produces advanced wafer fabrication and packaging tools critical for manufacturing sophisticated AI chips. Columbia Threadneedle Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“The portfolio’s holding in semiconductor equipment manufacturer Lam Research Corporation (NASDAQ:LRCX) contributed positively to performance as the stock moved higher during the first quarter. We are excited about the prospects for Lam Research, as the firm recently announced its ATLUS Halo, a tool that harnesses the capabilities of the metal molybdenum in the production of leading-edge semiconductors. Tungsten-based atomic layer deposition, pioneered by Lam, has been the predominant metallization technique for semiconductor chip deposition for over two decades, but the switch to molybdenum will help create memory and logic semiconductors for the future. Chip makers will need to shift beyond what is currently possible with tungsten, and this change will require many to update with Lam equipment, leading to increased sales. The fund also held a position in Japanese semiconductor company Renesas Electronics, which contributed to performance relative to the benchmark. The first quarter saw a large rotation to international stocks outperforming domestic securities, due primarily to concerns about U.S. tariffs, and the fund’s exposure to international firms like Renesas proved beneficial.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Most Promising AI Stocks to Buy Now. JPMorgan increased the price target on the company’s stock to $255 from $240, while keeping an “Overweight” rating. Notably, the firm updated estimates and price targets in the internet space. While the estimate increases exhibit better channel checks and favorable currency moves, increased share multiples demonstrate the reduced recession risk. Amazon.com, Inc. (NASDAQ:AMZN) is considering another multibillion-dollar investment in AI firm Anthropic, which can help strengthen the strategic partnership, as highlighted by Reuters while quoting the Financial Times.
Notably, it invested $4 billion into Anthropic in November last year to capitalize on the Gen AI technology, added Reuters. This brought Amazon.com, Inc. (NASDAQ:AMZN)’s total investment in Anthropic to $8 billion.
Amazon.com, Inc. (NASDAQ:AMZN) remains focused on bolstering its reputation in AI development, after competitors like OpenAI and Google took an early lead, mainly with the consumer-focused models, noted Reuters. Notably, the integration of AI technologies in AWS can enhance the cloud offerings, ramping up growth in this high-margin segment. Furthermore, AWS’s focus on developing AI-powered tools and services remains in line with the growing enterprise demand for advanced cloud capabilities. Overall, the integration of AI technologies in AWS can enhance Amazon.com, Inc. (NASDAQ:AMZN)’s cloud offerings.
Alphyn Capital Management, an investment management firm, released its Q2 2025 investor letter. Here is what the fund said:
“Amazon.com, Inc.’s (NASDAQ:AMZN) structural edge keeps widening. Its high-return, capital-light businesses compound without depending on the retail cycle. AWS is growing at mid-teens rates with nearly 40% segment margins and now contributes more than half of the group’s operating income. Advertising, an asset-light adjunct to the marketplace, is expanding even faster at 19% and directly impacts the bottom line. Meanwhile, the core retail business continues to benefit from the regionalized fulfilment network built over the last two years. North American retail margins would have reached roughly 7% absent tariff-related charges.
Amazon generated approximately $25 billion of trailing free cash flow, more than enough to cover stepped-up investments in artificial intelligence and robotics, while also funding Project Kuiper, whose first production satellites launched in April and can extend AWS into connectivity white spots around the world. I view Amazon as a self-funded, multi-legged compounding machine that trades at what appears to be a mid-teen multiple of normalized free cash flow.”
While we acknowledge the potential of AMZN to grow, 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 AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
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