In this article, we will discuss the 14 Most Promising AI Stocks to Buy Right Now.
Goldman Sachs Research anticipates the US economy to have a potential growth rate of over 2% over the upcoming few years, with some additional acceleration over the coming decade. The firm’s economists expect AI to increase labor productivity growth while the expansion of the workforce slows. Furthermore, technology and related sectors such as scientific research, engineering, and consulting made significantly larger contributions to the productivity growth compared to other sectors in the previous 5 years. Goldman Sachs believes that the technology industry’s increasing productivity is probably at least partially associated with AI.
Strong Global VC Investment
As per KPMG, VC investors have been doubling down on AI in Q3 2025, while companies continue to develop AI models and platforms, which are attracting the largest funding rounds of the quarter. Also, the surge in AI investments extended beyond the US and Europe. Moving forward into Q4 2025, the firm believes that global VC investment is projected to remain relatively stable, aided by the continued momentum in AI model development, industry-specific AI applications, and AI infrastructure.
Amidst such trends, we will now have a look at the 14 Most Promising AI Stocks to Buy Right Now.
Our Methodology
To list the 14 Most Promising AI Stocks to Buy Right Now, we conducted extensive research and sifted through online rankings. After getting an extensive list, we shortlisted the ones popular among hedge funds, as of Q2 2025. Finally, the stocks are arranged in ascending order of their hedge fund sentiments.
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).
14 Most Promising AI Stocks to Buy Right Now
14. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 33
Baidu, Inc. (NASDAQ:BIDU) is one of the Most Promising AI Stocks to Buy Right Now. On October 15, Saiyi He from CMB International Securities maintained a “Buy” rating on the company’s stock, with a price objective of $148.40. The analyst’s rating is backed by a combination of factors demonstrating Baidu, Inc. (NASDAQ:BIDU)’s growth potential and value enhancement. The analyst expects that the company’s core business revenue is expected to decline because of ongoing transformations in the advertising sector.
That being said, this is projected to be counterbalanced by a healthy growth in cloud services, thanks to the increased demand related to AI technologies. Furthermore, the analyst pointed out that while the recovery in core advertising could take some time, new growth drivers like agent-related ads and digital human formats have been emerging. Such innovations are expected to help Baidu, Inc. (NASDAQ:BIDU)’s revenue. Furthermore, Baidu, Inc. (NASDAQ:BIDU)’s significant cash reserves and potential optimization in cash usage have been considered as factors that can support its valuation. As of June 30, 2025, the company’s cash, cash equivalents, restricted cash, and short-term investments came in at RMB124.2 billion ($17.34 billion).
13. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 48
Super Micro Computer, Inc. (NASDAQ:SMCI) is one of the Most Promising AI Stocks to Buy Right Now. On October 14, the company announced the availability of its Data Center Building Block Solutions® (DCBBS). The solutions, which are considered a new business line, allow companies to design, order, and build complete data centers from a single vendor, helping to reduce time-to-online (TTO) and improving the overall quality and serviceability. By offering a complete IT solution, companies can work directly with Super Micro Computer, Inc. (NASDAQ:SMCI) to simplify the entire data center buildout.
Super Micro Computer, Inc. (NASDAQ:SMCI)’s liquid-cooling options are designed as well as optimized specifically for the latest generation of GPUs, CPUs, and other electronics. Such technologies are capable of cutting data center power consumption by up to 40% when utilising the Supermicro liquid-cooling infrastructure components, as compared to the existing air-cooled data centers. In a separate release, Super Micro Computer, Inc. (NASDAQ:SMCI) highlighted that it is seeing customer demand accelerating, and it is gaining AI share. The company reiterated revenue of at least $33 billion for FY 2026.
12. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is one of the Most Promising AI Stocks to Buy Right Now. On October 23, analyst Derrick Wood from TD Cowen reiterated a “Buy” rating on the company’s stock and has a price objective of $1,200.00. The analyst’s rating is backed by a combination of factors highlighting ServiceNow, Inc. (NYSE:NOW)’s healthy performance and growth potential. As per the analyst, the company is projected to post healthy results for Q3 2025, thanks to the strong execution in the US federal bookings and a favourable outlook on AI adoption, which are expected to alleviate concerns related to the government spending uncertainties.
ServiceNow, Inc. (NYSE:NOW) exhibited strength in the enterprise segment, with higher demand for AI-related workloads as well as a healthy increase in average deal sizes because of product bundling and successful upgrades. Furthermore, ServiceNow, Inc. (NYSE:NOW)’s innovations, like the Workflow Data Fabric and AI Experience, together with strategic acquisitions, position it well for future opportunities in CRM and AI monetization.
ClearBridge Investments, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“We did see good results from AI-ecosystem holdings in IT and industrials. Within IT, ServiceNow, Inc. (NYSE:NOW) remains a leader among its software peers in the monetization of generative AI, with a target of $1 billion in annual contract value from AI-related products by 2026.”
11. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 109
AppLovin Corporation (NASDAQ:APP) is one of the Most Promising AI Stocks to Buy Right Now. On October 14, Goldman Sachs analyst Eric Sheridan lifted the price target on the company’s stock to $630 from $445, while maintaining a “Neutral” rating as part of a broader research note previewing Q3 results for the Digital Advertising names.
The analyst added that AppLovin Corporation (NASDAQ:APP) can drive sustained ad revenue growth from its core mobile gaming segment over the upcoming 3 years. This is expected to be driven by a combination of steady industry growth, favourable secular tailwinds, and modest market share gains.
For Q3 2025, AppLovin Corporation (NASDAQ:APP) expects to deliver revenue between $1.320 billion – $1.340 billion, with adjusted EBITDA in the range of $1.070 billion – $1.090 billion. The company expects an adjusted EBITDA margin of 81%. Elsewhere, S&P Global Ratings has a more favorable view of AppLovin Corporation (NASDAQ:APP)’s business prospects and expects S&P Global Ratings-adjusted net leverage to remain under 1x over the upcoming 24 months.
ClearBridge Investments, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
We did see good results from AI-ecosystem holdings in IT and industrials. AppLovin Corporation (NASDAQ:APP) delivered exceptional first-quarter results, highlighted by outsize product-led share gains with ad revenue growing 71% year over year driven by the AI-driven advertising algorithm provider’s continued strength in gaming and rising traction in e-commerce.
10. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 113
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the Most Promising AI Stocks to Buy Right Now. On October 15, analyst Matt Bryson from Wedbush lifted the price objective on the company’s stock from $190 to $270, while keeping an “Outperform” rating. The lift in price objective came after Advanced Micro Devices, Inc. (NASDAQ:AMD) announced 2 blockbuster deals with Oracle and OpenAI. The analyst believes that the company has clearly provided future certainty related to the GPU demand, announcing new agreements promising to significantly increase future GPU revenues.
The analyst made upward revisions to the forward estimates. For Q3 and Q4, Bryson lifted the forecasts marginally to reflect stronger-than-expected demand in PC and server compute, which mainly benefits Advanced Micro Devices, Inc. (NASDAQ:AMD). The analyst’s datacenter GPU projections for the period were largely unchanged. To give a brief background about deals, Oracle Cloud Infrastructure (OCI) would be a launch partner for the first publicly available AI supercluster that is powered by AMD Instinct™ MI450 Series GPUs, with an initial deployment of 50,000 GPUs beginning in calendar Q3 2026 and expanding in 2027 and beyond. Talking about the second deal, Advanced Micro Devices, Inc. (NASDAQ:AMD) and OpenAI announced a 6-gigawatt agreement to power OpenAI’s next-generation AI infrastructure throughout multiple generations of AMD Instinct GPUs.
Macquarie Asset Management, an investment management company, released its investor letter for Q3 2025. Here is what the fund said:
“Advanced Micro Devices, Inc. (NASDAQ:AMD), a US semiconductor company, was also added to the portfolio. The total addressable market for AI chips is vast and in need of a second supplier to complement NVIDIA. We believe AMD is now positioned to supply a competitive, and possibly superior, chip for inference on a price/performance basis. Additionally, its next-generation chip for AI training should be a viable option to supplement NVIDIA supply.”
9. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 121
Salesforce, Inc. (NYSE:CRM) is one of the Most Promising AI Stocks to Buy Right Now. On October 17, Monness analyst Brian White maintained a “Neutral” stance on the company’s stock, giving a “Hold” rating. The analyst’s rating is supported by a combination of factors that influence the company’s current market position. Despite Salesforce, Inc. (NYSE:CRM)’s recent advancements in AI innovations, expanded partnerships, and flexible pricing options, its growth remains modest, and the competitive landscape remains challenging, added the analyst. Also, the macroeconomic environment presents uncertainties, adding to the cautious outlook.
That being said, Salesforce, Inc. (NYSE:CRM)’s introduction of Agentforce 360 and strategic partnership with OpenAI exhibit potential to capitalize on the generative AI trend. In a separate release, Salesforce, Inc. (NYSE:CRM) announced a new long-term revenue target of over $60 billion by FY 2030, excluding Informatica. This demonstrates a 10%+ organic FY 2026 to FY 2030 CAGR. The company continues to see healthy momentum with its Data and AI offering.
Investment management company Vulcan Value Partners recently released its Q3 2025 investor letter. Here is what the fund said:
“Salesforce, Inc. (NYSE:CRM) is the world’s leading SaaS vendor for customer relationship management (CRM) and salesforce automation (SFA) software, including AI agents. Salesforce offers many other products including software for marketing automation, customer service automation, analytics, application integration, and enterprise collaboration among others. Growth guidance for the upcoming quarter was slightly lower than anticipated leading some investors to question whether Salesforce’s growth was slowing and AI investments were not bearing fruit. These questions have been amplified by a bearish industry narrative that AI will take market share from enterprise software companies like Salesforce. We believe the company is poised for sustained growth and will actually benefit from AI. Salesforce’s software is deeply embedded in the enterprise. The company is expanding its product suite with multiple cloud offerings, proprietary data, and an emphasis on being an AI innovation leader. In addition, its customers would rather focus on running their businesses instead of designing, testing, maintaining, and securing internal AI products in an ever-evolving landscape. Salesforce is deeply entrenched within its customer base, has high retention, high recurring revenue, and is a very scalable business with high margin potential. Salesforce is dominant across its offerings and is constantly innovating with new products like Agentforce to deepen customer relationships and grow the business.”
8. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 124
Oracle Corporation (NYSE:ORCL) is one of the Most Promising AI Stocks to Buy Right Now. On October 20, Monness analyst Brian White maintained a “Neutral” stance on the company’s stock, giving a “Hold” rating. The analyst’s rating is backed by a combination of factors around the company’s current financial trajectory and strategic initiatives. While Oracle Corporation (NYSE:ORCL) continues to make significant strides in the broader AI sector, with new innovations and partnerships, the analyst opines that the ambitious revenue targets of the company could require significant capital expenditures.
Furthermore, Oracle Corporation (NYSE:ORCL)’s updated financial targets, while optimistic, exhibit a high growth rate, which could be challenging to achieve considering the competitive landscape. Oracle Corporation (NYSE:ORCL)’s plans for cloud infrastructure and AI platforms are promising; however, the analyst believes that the execution of such plans amidst increased expectations and financial commitments warrants a cautious approach.
Headwaters Capital Management, an investment management company, released its Q3 2025 investor letter. Here is what the fund said:
“The catalyst for the September AI trade was Oracle Corporation’s (NYSE:ORCL) announcement of a 5-year contract with OpenAI for $300B (implying annual contract value of $60B) to host the company’s LLMs at Oracle data centers beginning in 2027. While the market has grown desensitized to these large headline numbers, it’s useful to step back and put these figures into context from the perspective of both the magnitude of spending and return on investment. It’s easiest to start with the amount of investment that five companies are collectively spending on AI. The table below outlines CAPEX spending by the five hyperscalers and compares it with the other 495 companies in the S&P 500. In 2026, these five hyperscaler companies are expected to spend $405B of CAPEX, nearly all of this related to AI infrastructure build.
In terms of the economics around this investment, details have emerged from the Oracle-OpenAI announcement that can help investors begin to untangle the economics of these contracts. It’s easiest to unpack this from the perspective of each of the players involved.
Committed to spending $60B annually with Oracle to host the Company’s LLMs. This annual expense represents the Company’s cost of goods sold for running LLMs. OpenAI is on track to generate $13B of revenue in 2025 (Source: Reuters and the Information). So just to cover the cost of operating their LLMs on this single contract, OpenAI needs revenue to grow 4.6x in 2 years, or a +115% CAGR over the next 2 years. This is a single contract for hosting services. OpenAI has numerous other hosting contracts, implying that the company needs revenue to significantly exceed $60B just to cover the company’s total cost of goods sold…” (Click here to read the full text)
7. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO) is one of the Most Promising AI Stocks to Buy Right Now. On October 13, analyst James Schneider of Goldman Sachs reiterated a “Buy” rating on the company’s stock, boosting the price objective to $380.00. The analyst’s rating is backed by a combination of factors, mainly revolving around Broadcom Inc. (NASDAQ:AVGO)’s strategic partnership with OpenAI. The analyst highlighted that this collaboration is set to deploy 10GW of custom-designed AI accelerators and networking products, cementing Broadcom Inc. (NASDAQ:AVGO)’s leadership in custom silicon technology.
As per the analyst, the partnership, which includes co-development of systems with Broadcom Inc. (NASDAQ:AVGO)’s accelerators and Ethernet solutions, is anticipated to begin deployments in H2 2026 and complete by 2029 end. The partnership not only reaffirms Broadcom Inc. (NASDAQ:AVGO)’s robust technology position compared to the competitors, but also provides a significant revenue opportunity, added Schneider. Furthermore, the analyst believes that the potential for substantial financial returns, along with industry-leading margins, can fuel stock price outperformance and offer healthy visibility into FY 2026 and FY 2027.
Polen Capital, an investment management company, released its Q3 2025 investor letter. Here is what the fund said:
“In early August we initiated positions in both NVIDIA and Broadcom Inc. (NASDAQ:AVGO), after having not owned either company over the past 2½ years following the initial wave of enthusiasm around Gen AI. While we have long admired both companies, their highly cyclical business models have made it extremely difficult to forecast future earnings growth with any degree of conviction. Given our approach of seeking durable and persistent earnings growth that compounds over long holding periods, our concern in holding either was that we would be forced to endure a punishing downcycle within our typical holding period – there is very little room that in a concentrated portfolio of 20-30 companies. In fact, pre ChatGPT, NVIDIA had two punishing down cycles over the preceding five years.
That is specifically what has occurred for NVIDIA and Broadcom. While the sheer magnitude of demand for AI chips, servers and networking equipment was something that we clearly underappreciated, new incremental data points over the past few months lead us to conclude the current boom in AI chips and related hardware will likely continue for the foreseeable future giving us greater conviction over the trajectory of future earnings for both NVIDIA and Broadcom.
Broadcom is the other major player in the AI chip market, the number one provider of custom chips, and currently receives the majority of the remaining 10c of every dollar being spent by enterprises. As Gen AI use cases mature, and as inference workloads become a bigger piece of the compute pie, we expect that custom chips (and Broadcom’s in particular) will account for a larger share of the total market. …” (Click here to read the full text)
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 187
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the Most Promising AI Stocks to Buy Right Now. On October 16, the company announced its Q3 2025 results, with consolidated revenue coming at NT$989.92 billion, net income at NT$452.30 billion, and diluted earnings per share at NT$17.44 (US$2.92 per ADR unit). As compared to Q2 2025, the company saw 6.0% growth in revenue and a 13.6% rise in net income. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s business in Q3 2025 was aided by healthy demand for its leading-edge process technologies.
In Q3 2025, while the shipments of 3-nanometer made up for 23% of total wafer revenue, 5-nanometer accounted for 37% and 7-nanometer accounted for 14%. With the structural AI-related demand continuing to be robust, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has been investing to support customers’ growth. It is narrowing its range of 2025 capex to be between USD 40 billion – USD 42 billion compared to USD 38 billion – USD 42 billion previously. Notably, ~70% of the capital budget would be allocated for advanced process technologies, and ~10% to 20% will be for specialty technologies. Notably, ~10% – 20% is expected to be spent on advanced packaging, testing, mass making, and others.
Wedgewood Partners, an investment management company, released its Q3 2025 investor letter. Here is what the fund said:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was also a leading contributor to performance during the third quarter (as well as the past few years). Approximately 60% of the Company’s revenue is generated from manufacturing AI and high-performance computing (HPC) chips for leading semiconductor design companies, including Nvidia, Apple, Broadcom, Meta, Amazon and Alphabet. The Company offers the most manufacturing capacity at leading-edge nodes, a capability in high-demand as it enables customers to design more power-efficient chips against a backdrop of increasingly power-constrained data centers. The Company’s execution over the past several years has been nearly lawless, providing its customers with significant benefits in planning multi-year road maps that the entire IT industry is now adopting. The stock recently re-rated higher, exceeding our 10% maximum portfolio weight. As a result, we slightly trimmed our positions during the quarter.”
5. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 219
Alphabet Inc. (NASDAQ:GOOGL) is one of the Most Promising AI Stocks to Buy Right Now. On October 20, Oppenheimer lifted the price target on the company’s stock to $300 from $270, while keeping an “Outperform” rating, as reported by The Fly. While the firm remains optimistic about the long-term benefits from Meta’s push into AI and proven ability to outgrow its competitors, it is more bullish on Alphabet Inc. (NASDAQ:GOOGL) for the near term. This optimism is backed by more conservative estimates and lower valuation despite not fully monetizing AI Mode or AI Overviews.
In a separate release, analyst John Blackledge from TD Cowen exhibited optimism about the company’s stock. This optimism is mainly focused on the strategic expansion of Alphabet Inc. (NASDAQ:GOOGL)’s partnership with Anthropic. Notably, the collaboration enhances Google Cloud’s capacity significantly, offering Anthropic with significant compute resources, which include access to a large number of Alphabet Inc. (NASDAQ:GOOGL)’s tensor processing unit chips. The analyst believes that the development is anticipated to fuel increased demand for Google Cloud services, cementing its market position.
Bristlemoon Capital, a global equities firm, released its Q3 2025 investor letter. Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOGL) is another stock that we felt had been undeservedly beaten down by a bearish narrative that largely ignored the fundamentals of the business. We began accumulating GOOGL in June and continued adding to our position in Q3 as we waited for the market narrative to flip on its head. Alphabet needs no introduction, so we will jump straight into why we thought the AI disruption and terminal value fears were overblown.
Google failing to innovate? The notion that Google has lost the ability to innovate is a common refrain that we have heard over the past several years – essentially since the November 2022 ChatGPT moment – and one that we subscribed to ourselves at one stage. The genesis of this complaint is easy to understand: • Despite (or perhaps because of) being a tremendous monetary success, the Google Search experience has been degrading for years as sponsored links, shopping ads, algorithm changes and rampant SEO abuse made it increasingly tedious for users to find answers to their queries. • Google has nine services with over 1 billion users each, yet these are all over one or two decades old, and the company has failed to launch a new service or product with massive adoption in recent years despite its distribution advantages. At least Mark Zuckerberg has the distinction of copying well…” (Click here to read the full text)
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
NVIDIA Corporation (NASDAQ:NVDA) is one of the Most Promising AI Stocks to Buy Right Now. On October 16, Bloomberg reported that NVIDIA Corporation (NASDAQ:NVDA) is partnering with Australian startup Firmus Technologies Ltd. in a bid to create a massive fleet of renewable energy-powered AI data centers throughout the country. The construction is in progress on 2 data centers in Melbourne and Tasmania for Project Southgate, which is A$4.5 billion ($2.9 billion) undertaking utilising 150 megawatts of power.
The facilities would use NVIDIA Corporation (NASDAQ:NVDA)’s GB300 chips and are anticipated to come online by April, noted Bloomberg. Earlier, in September 2025, OpenAI and NVIDIA Corporation (NASDAQ:NVDA) announced a letter of intent for the landmark strategic partnership. Notably, NVIDIA Corporation (NASDAQ:NVDA) plans to invest up to $100 billion in OpenAI progressively as each gigawatt gets deployed.
Polen Capital, an investment management company, released its Q3 2025 investor letter. Here is what the fund said:
“In early August we initiated positions in both NVIDIA Corporation (NASDAQ:NVDA) and Broadcom, after having not owned either company over the past 2½ years following the initial wave of enthusiasm around Gen AI. While we have long admired both companies, their highly cyclical business models have made it extremely difficult to forecast future earnings growth with any degree of conviction. Given our approach of seeking durable and persistent earnings growth that compounds over long holding periods, our concern in holding either was that we would be forced to endure a punishing downcycle within our typical holding period – there is very little room that in a concentrated portfolio of 20-30 companies. In fact, pre ChatGPT, NVIDIA had two punishing down cycles over the preceding five years.
That is specifically what has occurred for NVIDIA and Broadcom. While the sheer magnitude of demand for AI chips, servers and networking equipment was something that we clearly underappreciated, new incremental data points over the past few months lead us to conclude the current boom in AI chips and related hardware will likely continue for the foreseeable future giving us greater conviction over the trajectory of future earnings for both NVIDIA and Broadcom.
NVIDIA produces the fastest chips that are able to process compute intensive tasks like Gen AI training models extremely efficiently, are very flexible so can be used for any type of workload, and as a result are the chips in highest demand as the hyperscalers build out their Gen AI infrastructure (NVIDIA currently receiving 90c of every dollar spent on AI accelerated semiconductors). Their business has a very strong competitive moat, which is partly about the speed of their chips, but also the entire ecosystem they have built around them (programing language, training models and associated network effects)…” (Click here to read the full text)
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 260
Meta Platforms, Inc. (NASDAQ:META) is one of the Most Promising AI Stocks to Buy Right Now. On October 22, Brian White, an analyst from Monness, maintained a “Buy” rating on the company’s stock, and the associated price target was same at $860.00. The analyst’s rating is backed by a combination of factors demonstrating Meta Platforms, Inc. (NASDAQ:META)’s robust growth potential and strategic positioning. Meta Platforms, Inc. (NASDAQ:META) continues to aggressively expand its AI initiatives, which can open new growth avenues in the generative AI era.
The analyst believes that this expansion is complemented by the company’s ability to capitalize on the digital advertising trend, which can fuel significant revenue growth. As per the analyst, Meta Platforms, Inc. (NASDAQ:META)’s advertising revenue is expected to rise, thanks to its strong market position. Also, the company’s recent innovations, which include AI-driven personalization and new product launches, further cement the competitive edge. Despite the regulatory challenges and a tough macroeconomic environment, such strategic moves place the company well for future success, added White.
Rowan Street Capital, an investment management company, released its Q3 2025 investor letter. Here is what the fund said:
“Meta Platforms, Inc. (NASDAQ:META) has been our largest holding for several years and remains one of the best examples of what long-term ownership in an exceptional business ca deliver. Since our initial purchase more than seven years ago, Meta has compounded over 21% annually — a testament to its enduring competitive advantages, operation excellence, and the compounding power of time. We’ll keep our commentary brief here, as we’ve discussed Meta extensively in prior letters — its journey illustrates the benefits of patience, conviction, and alignment with a world-class founder-operator.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 294
Microsoft Corporation (NASDAQ:MSFT) is one of the Most Promising AI Stocks to Buy Right Now. On October 20, BofA analyst Brad Sills maintained a “Buy” rating on the company’s stock, which is supported by the price objective of $640.
As per the analyst, capex revisions are expected to act as a catalyst for Microsoft Corporation (NASDAQ:MSFT)’s stock. The company is taking a deliberate and strategic approach to expand the AI infrastructure, maintaining a balance between scaling capacity and ensuring energy independence.
Also, the analyst remains optimistic about the increasing visibility around the compute investments, including Microsoft Corporation (NASDAQ:MSFT)’s role in the Aligned Data Centers acquisition alongside BlackRock and Nvidia, and the durable demand for compute, demonstrated by the Azure capacity constraints.
Furthermore, the analyst opines that there are other potential catalysts, including the possibility of faster commercial Office growth, thanks to the continued momentum in E3/E5 adoption and Copilot demand through the year. Summing up, the analyst believes that Microsoft Corporation (NASDAQ:MSFT) remains well-placed to participate in the AI cycle in the application and infrastructure markets.
Wedgewood Partners, an investment management company, released its Q3 2025 investor letter. Here is what the fund said:
“Microsoft Corporation (NASDAQ:MSFT) has also spent quite heavily on capex over the past several years, having stood up more than 2 gigawatts of data center capacity over the past 12 months alone, yet it has also produced very attractive cash low returns. It exited its fiscal 2025 with almost $370 billion in gross property plant and equipment and capitalized leases, up a remarkable $260 billion from fiscal 2020. Meanwhile, gross cash low grew from $60 billion a year in 2020 to more than $140 billion per year in 2025. When we add in the rest of the assets on Microsoft’s balance sheet, we calculate its gross cash lows to be a consistent returns on capital in the high 20s. That is an extraordinary attractive return for such massive amounts of investing.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 335
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Most Promising AI Stocks to Buy Right Now. On October 24, Wedbush analyst Scott Devitt lifted the price target on the company’s stock from $250 to $280, while maintaining a “Buy” rating on Amazon.com, Inc. (NASDAQ:AMZN)’s stock ahead of its Q3 earnings report. As per the analyst, the company’s long-term growth story is intact, thanks to a robust cloud backlog and significant investments in new data centers. Furthermore, the analyst highlighted the steady momentum in Amazon.com, Inc. (NASDAQ:AMZN)’s retail business and strength in advertising.
In a separate release, Accenture announced the expansion of its collaboration with Amazon.com, Inc. (NASDAQ:AMZN)’s AWS to deliver transformative digital services to public sector, defense, and national security organizations. Through Accenture AWS Business Group, the companies would be collaborating to create new solutions, which use cloud and AI services to reduce the operating costs, optimize resource allocation, and improve the quality of citizen services and defense capabilities.
Mairs & Power, an investment advisor, released the Q2 2025 investor letter. Here is what the fund said:
“The Fund also started a new position in Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter, where the company is well positioned to continue capturing market share in retail while also growing its market leading cloud business. The Fund took advantage of weakness in the stock during April to start the position as tariff news and a precipitous market decline provided an opportunity to build a position.”
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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