In this article, we look at the 15 AI Stocks Analysts Are Watching: Microsoft, Nvidia, and More.
Semiconductor and AI stocks pulled Wall Street lower on Tuesday, with the NASDAQ and the S&P 500 slipping to their lowest levels in more than a week. Markets were particularly shaken by the scrutiny of debt-funded AI spending and the possibility of a more hawkish Federal Reserve.
Nvidia (NVDA), Micron Technology (MU), and AMD (AMD) were amongst the most notable decliners in the tech sector sell-off. Nvidia fell more than 4%, while Micron dropped 13% ahead of its report on Wednesday. Asian chip makers also bore the impact, with SK Hynix and Samsung Electronics both declining.
Meanwhile, Marvell Technology (MRVL) and Advanced Micro Devices lost between 5% and 9%.
“Some of the news lately about AI raises questions about all the spending that’s being done and the capex and ramping of the capacity for semiconductors.”
-Thomas Martin, senior portfolio manager at Globalt.
According to James Reilly, senior markets economist at Capital Economics, these moves are part of a growing trend of rising volatility in tech stocks generally.
“This volatility is, in our view, evidence of excessive froth and calls into the question the sustainability of this rally.”
Market analysts have also been pointing to concerns sparked by Google and SpaceX. A high-profile leader has moved to OpenAI, while SpaceX is also facing some post-IPO anxieties.
While tech stocks have fallen, the broader market rally remains intact.
“AI and valuations for tech-related companies are returning to the spotlight, as equity markets shift their focus from the Middle East war towards the sustainability of tech-related spending amid rising global interest rates,”
– Mason Mendez, global real assets analyst at Wells Fargo Investment Institute, said in a note.
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 Q1 2026.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
15. Space Exploration Technologies Corp. (NASDAQ:SPCX)
Number of Hedge Fund Holders: –
On June 22, KeyBanc initiated the stock as Sector Weight; noting that it is fairly valued and that it doesn’t see a clear reason to buy or sell the stock at current levels.
SPCX possesses significant disruptive growth avenues, though we believe this is reflected in current valuation and risk/reward appears balanced, in our view.
While SpaceX has huge plans through its Starlink and Starship rocket, the firm is not yet enthusiastic about them. It noted how Starship, the giant reusable rocket, is yet to mature and has suffered setbacks, pushing back timelines several years.
While we believe Starship will ultimately achieve success, we take a conservative approach on its development timeline. Risk/reward appears balanced until we achieve greater visibility on Starship’s progress.
A more immediate concern, the firm noted, is how the structured lockup schedule will gradually release additional shares into the market over time. This will increase the number of shares available for trading, but also lead to “near-term liquidity uncertainty.”
In separate news, Reuters reported how AI startup Reflection AI has signed a deal with SpaceX that will grant the startup access to additional computing capacity at the company’s Colossus 2 data center. This move makes Reflection AI the latest outside company to secure AI computing capacity at SpaceX’s Colossus infrastructure.
Space Exploration Technologies Corp. primarily provides satellite-based broadband services. However, its businesses also span rocket launch services, satellite internet and connectivity, artificial intelligence (AI), and cloud computing.
14. NICE Ltd. (NASDAQ:NICE)
Number of Hedge Fund Holders: 24
On June 18, DA Davidson analyst Clark Wright upgraded NICE Systems Ltd (NASDAQ:NICE) to Buy from Neutral on Thursday, maintaining its price target of $110. The firm believes that investor concerns related to AI disruptions in the contact center industry may be overstated.
DA Davidson said in the investor note that it has upgraded NICE shares to buy following conversations with customers at the company’s annual user event. The discussions revealed how the actual impact of AI in contact center appears less disruptive than investors fear.
The firm’s upgrade is also a reflection of potential value from possible sale of Actimize, its specialized business unit and subsidiary, monetization of AI feature usage, and discounted valuation. Overall, the firm believes that the stock’s overall valuation is favorable even though concerns exist regarding AI.
Following an analysis of the value unlock potential from the sale of Actimize, monetization of AI feature usage, and discounted valuation on a relative and historical basis @ <7X CY27 EPS, we believe the risk/reward skews positive at current levels.
NICE Ltd is a provider of AI-powered cloud platforms for customer engagement, financial crime and compliance, as well as digital evidence management.
Hedge Fund Resource Center