In this piece, we will discuss the 15 Best AI Stocks to Watch in December 2025.
Amid rising valuations, increased capital spending, and cautionary signals from global investors and policymakers, the AI sector continues to draw attention. The intense competition that is shaping the sector was highlighted by Bill Gates, who spoke at Abu Dhabi Finance Week on November 8, 2025. He warned that not all companies with high valuations will end up as winners, even though he regards AI as “a deeply profound technology that will reshape the world.” While stating that “some of them will go down,” he reflected on the growing investor concern about overvaluations, which have taken some AI-focused stocks far beyond traditional price-to-earnings benchmarks.
Speaking to CNBC on November 8, 2025, BlackRock’s Ben Powell said the AI infrastructure ecosystem, including chipmakers and energy and copper-wire suppliers, will benefit most from ongoing investment. While discussing how hyperscalers are investing heavily to stay ahead in AI performance and offerings, driving what he called a “capex super boom,” he suggested that substantial gains may lie more with the underlying hardware and energy providers supporting the AI buildout than with the model developers themselves.
Meanwhile, European regulators urge caution. Concentrated exposure among U.S. hyperscalers, including Nvidia, Alphabet, Microsoft, and Meta, was highlighted in the European Central Bank’s 2025 Financial Stability Review, released in late November. While acknowledging that valuations are supported by strong earnings, it cautioned that market sentiment could change drastically if growth expectations stall. Noting a mix of FOMO-driven investment and solid earnings growth, strategists highlight the need for differentiation across AI picks.
With this backdrop in mind, we will jump to our list of the 15 Best AI Stocks to Watch in December 2025.
Our Methodology
To curate our list of the 15 best AI stocks to watch in December 2025, we relied on financial media, ETFs, and screeners to identify Artificial Intelligence (AI) stocks with significant upside potential as of December 5, 2025, and hedge fund interest as of Q3 2025. We considered not only pure-play AI stocks but also companies leveraging AI to enhance their business. Next, we used Insider Monkey’s hedge fund database to assess hedge fund sentiment across these stocks, which tracks 978 hedge funds. Finally, we present our list of the best AI stocks in ascending order based on the number of hedge funds holding stakes in each stock.
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).
15. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 64
Upside Potential: 25.31%
With significant hedge fund interest and upside potential, Workday, Inc. (NASDAQ:WDAY) secures a spot on our list of the 15 best AI stocks to watch in December 2025.
On December 2, 2025, Workday, Inc. (NASDAQ:WDAY) saw DA Davidson’s Robert Simmons reiterate his “Hold” rating with a $235 price target. Reflecting mixed signals in the company’s growth trajectory, he pointed toward its Core HCM segment, which is expanding at a slower pace due to market saturation and intensifying competition, despite remaining Workday’s largest revenue driver. Although the Financial Management portfolio and international operations are experiencing rapid growth, the analyst believes they have yet to improve the company’s overall growth profile meaningfully.
At the same time, Simmons highlighted cross-selling and up-selling efforts, which remain strong contributors to bookings. He believes margins are expected to go up, further supporting his price target. However, the analyst noted that Workday, Inc. (NASDAQ:WDAY) remains more expensive than its peers on a revenue multiple basis, justifying his “Hold” rating as he awaits a more compelling entry point.
A week earlier, on November 25, Workday, Inc. (NASDAQ:WDAY) reported its fiscal Q3 2026 results. The quarter saw revenue growth of 12.6%, driven by 14.6% growth in subscription revenue, along with improved operating margins and stronger cash flows. Thanks to new customers, expanded enterprise relationships, and contributions from recent acquisitions such as Paradox, the subscription revenue backlog recorded double-digit growth. While the quarter also featured multiple AI-focused product launches and partnerships reinforcing the company’s innovation pipeline, the analyst’s short-term growth concerns remain unchanged.
Workday, Inc. (NASDAQ:WDAY) offers an enterprise AI platform that manages people, money, and agents.
14. Block, Inc. (NYSE:XYZ)
Number of Hedge Fund Holders: 64
Upside Potential: 37.47%
Block, Inc. (NYSE:XYZ) is one of the 15 best AI stocks to watch in December 2025.
On December 3, 2025, UBS analyst Timothy Chiodo reiterated his “Buy” rating on Block, Inc. (NYSE:XYZ) with a $90 price target. The analyst’s bullish stance reflects sustained momentum across both the Square and Cash App ecosystems.
Despite seasonal trends pointing to some Gross Payment Volume (GPV) deceleration, Block, Inc. (NYSE:XYZ) reiterated its Q4 2025 outlook, which translates into strong gross profit and adjusted operating income growth. Within the Square ecosystem, the analyst sees further domestic and international scaling potential as expanded investments in telesales and field sales continue to generate strong returns.
Moving on to the Cash App ecosystem, the analyst sees it as a key growth driver, with management further bolstering his optimism by projecting a mid-teen gross profit CAGR over the next three years. Moreover, rising active users and deeper monetization across bitcoin offerings and pre-purchase BNPL features continue to drive growth expectations. The analyst also highlighted Block, Inc. (NYSE:XYZ)’s ability to enhance consumer spending flexibility and apply internal data to strengthen underwriting.
Meanwhile, Block, Inc. (NYSE:XYZ) shared its longer-term guidance for key business performance metrics on November 19, 2025. Projecting mid-teens annual gross profit growth through 2028, the company projects it will reach $15.8 billion. At the same time, it projected an approximately 30% annual growth in adjusted operating income and adjusted EPS. Furthermore, management believes the company will achieve the Rule of 40 in 2026. By 2028, non-GAAP cash flow is expected to reach 25% of gross profit, or more than $4.0 billion on a non-GAAP cash flow basis.
Block, Inc. (NYSE:XYZ) also boosted its share repurchase program by $5 billion, which reflects leadership’s confidence in the company’s financial trajectory.
Block, Inc. (NYSE:XYZ) leverages Artificial Intelligence (AI) to develop technology that broadens economic access through Square, Cash App, Afterpay, Bitkey, and Proto. It supports global commerce, financial services, digital payments, and bitcoin innovation.
13. Nebius Group N.V. (NASDAQ:NBIS)
Number of Hedge Fund Holders: 65
Upside Potential: 66.40%
With significant hedge fund interest and upside potential, Nebius Group N.V. (NASDAQ:NBIS) secures a spot on our list of the 15 best AI stocks to watch in December 2025.
Appearing in an interview with Reuters on December 3, 2025, Nebius Group N.V. (NASDAQ:NBIS)’s co-founder Roman Chernin spoke with optimism. He argued that demand for AI infrastructure can potentially expand ten- to hundred-fold once enterprises start to adopt rapidly evolving AI models. He shared that the company is building high-margin services and long-term customer relationships to prepare itself for potential downturns. This, he believes, positions the company to act as a consolidator if market conditions tighten.
Nebius Group N.V. (NASDAQ:NBIS)’s expansion strategy includes multibillion-dollar agreements with Microsoft and Meta. These include a $17 billion Microsoft deal signed in September and a $3 billion Meta partnership announced in November. Thanks to these strategic plays, NBIS has risen 248% so far in 2025, with its market cap surpassing the $25-billion mark. Chernin added that these efforts will now be leveraged to expand the company’s client base across traditional enterprises and emerging AI companies amid concerns about an AI bubble.
Meanwhile, the significance of these partnerships was highlighted in earlier analyst commentaries.
Reaffirming its “Buy” rating on November 13, BWS Financial cited strong demand for Nebius Group N.V. (NASDAQ:NBIS)’s AI cloud services and sees the Meta agreement as evidence of growing market confidence, despite short-term operational headwinds.
On the other hand, Citizens JMP initiated coverage of Nebius Group N.V. (NASDAQ:NBIS) on November 19, 2025, setting a $175 price target and an “Outperform” rating. The investment firm noted a shift in broader sentiment, with analysts now seeing the company as a credible ecosystem player, thanks to the Microsoft and Meta deals. The firm added that partnerships with these tech giants dismissed investor concerns tied to the company’s historical links to Yandex.
Through its Avride and TripeTen assets, as well as stakes in Toloka and ClickHouse, Nebius Group N.V. (NASDAQ:NBIS) delivers advanced AI infrastructure solutions to support large-scale compute and data workloads.
12. Wix.com Ltd. (NASDAQ:WIX)
Number of Hedge Fund Holders: 71
Upside Potential: 66.78%
Wix.com Ltd. (NASDAQ:WIX) is one of the 15 best AI stocks to watch in December 2025.
As of December 8, 2025, roughly 90% of analysts remain bullish on Wix.com Ltd. (NASDAQ:WIX) with a median price target of $170.00. The consensus price target implies 70% upside.
The most recent analyst commentary came from CFRA on November 24, 2025, where the firm reiterated its “Buy” rating but lowered its price target from $200 to $140. With slower revenue growth expected through 2026, the firm projects a two-year revenue CAGR of 13%, compared with a five-year CAGR of 18% through 2024.
Nevertheless, CFRA projects premium subscriptions will continue to grow, driven by ongoing product enhancements and marketing initiatives targeting high-intent users. Moreover, the investment firm expects Wix.com Ltd. (NASDAQ:WIX) to achieve higher average revenue per subscription through increased product pricing, a shift toward higher-priced plans, broader product offerings, and greater adoption of Business Solutions features.
Amid pressure from increased investments in AI, product development, and scaling and integration of Base44, CFRA expects modest operating margin compression in 2025 and 2026. However, it expects operational efficiency efforts and cost-management initiatives to partially offset these margin headwinds. While CFRA maintained its 2025 non-GAAP EPS estimate of $7.43, it lowered its 2026 EPS forecast from $8.75 to $7.82. The reduced EPS forecast reflects revised margin expectations associated with higher anticipated investment spending.
Operating a cloud-based website design and development platform, Wix.com Ltd. (NASDAQ:WIX) offers web templates, a web editor, a web builder, search engine optimization tools, a logo maker, web hosting, and email marketing services.
11. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 72
Upside Potential: 40.00%
With significant hedge fund interest and upside potential, Datadog, Inc. (NASDAQ:DDOG) secures a spot on our list of the 15 best AI stocks to watch in December 2025.
As of December 8, 2025, roughly 90% of analysts remain bullish on Datadog, Inc. (NASDAQ:DDOG) with a median price target of $219.00. The consensus projected price target implies 41.95% upside.
Meanwhile, a recent analyst update on Datadog, Inc. (NASDAQ:DDOG) came from Robert W. Baird’s analyst William Power on November 24, who reiterated a “Buy” rating with a $220 price target. This update comes despite recent stock volatility, with the company’s share price declining 23.61% in the past month.
The company’s resilience in the observability market was highlighted by Power, who noted that competitive noise, including PANW’s acquisition of Chronosphere, has had no impact on Datadog, Inc. (NASDAQ:DDOG)’s position. AI players’ heavy reliance on the company’s monitoring capabilities was cited by the analyst, who pointed to a significant contract extension with a major AI customer, widely believed to be OpenAI, as supporting evidence. Meanwhile, the analyst sees the recent pullback as a compelling entry point, expressing optimism about the company’s consistent growth across both AI and non-AI customer segments.
Building on this momentum, Datadog, Inc. (NASDAQ:DDOG) unveiled a range of AI, observability, and security products at AWS re:Invent on December 3, alongside a new Strategic Collaboration Agreement (SCA) with AWS. With this expanded partnership, both companies look to deepen joint solution development, enhance marketplace reach, and introduce advanced tools, including LLM observability, automated remediation, and cloud cost-optimization features. These tools will help enterprises manage increasingly complex, AI-driven cloud environments.
Providing a unified SaaS platform for observability and cloud security, Datadog, Inc. (NASDAQ:DDOG) integrates monitoring, logging, application performance insights, and AI-driven tools. With this, it helps organizations manage and secure complex cloud environments in real time.
10. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 88
Upside Potential: 29.26%
With significant hedge fund interest and upside potential, Adobe Inc. (NASDAQ:ADBE) secures a spot on our list of the 15 best AI stocks to watch in December 2025.
On December 9, 2025, Adobe Inc. (NASDAQ:ADBE) saw Mizuho Securities’ Gregg Moskowitz reiterate a “Buy” rating with a $450 price target.
Meanwhile, on the previous day, TD Cowen’s Derrick Wood reaffirmed a “Hold” rating on Adobe Inc. (NASDAQ:ADBE) with a $420 price target. Maintaining a cautiously balanced outlook, the analyst expects growth deceleration in 2026, consistent with broader market expectations. However, Wood believes the company’s upcoming Q4 results will remain steady. The company is scheduled to release its Q4 results after market close on December 10.
The analyst believes competitive pressures are rising, even though Adobe Inc. (NASDAQ:ADBE) continues to see growing demand for its AI-driven products. Furthermore, the analyst highlighted a lack of sufficient financial disclosures and fresh long-term targets. As a result, investor concerns continue to rise amid uncertainty, despite strong Q3 results and encouraging partner feedback. Wood predicts the stock will remain range-bound until clarity on how AI will reshape the company’s long-term business model emerges.
Nevertheless, Adobe Inc. (NASDAQ:ADBE) remains robust from a strategic perspective.
On November 19, 2025, the company announced a $1.9 billion all-cash deal to acquire Semrush. With this acquisition, the company plans to expand its footprint in brand visibility, Generative Engine Optimization (GEO), and Search Engine Optimization (SEO). These tools are becoming increasingly crucial as consumers shift to LLM-based search platforms.
Moreover, on the same day, Adobe Inc. (NASDAQ:ADBE) partnered with HUMAIN, a Saudi-based AI powerhouse. With this partnership, the company aims to develop culturally rooted multimodal generative AI models. This collaboration also strengthens the company’s global AI ambitions and anchors its commitment to the fast-growing Middle Eastern digital ecosystem.
Adobe Inc. (NASDAQ:ADBE) delivers creative, document, and digital-experience software globally. It provides cloud-based tools helping individuals and enterprises create, manage, and optimize content and customer experiences across platforms.
9. Arista Networks Inc. (NYSE:ANET)
Number of Hedge Fund Holders: 92
Upside Potential: 27.60%
Arista Networks Inc (NYSE:ANET) is one of the 15 best AI stocks to watch in December 2025.
On December 7, 2025, Rosenblatt Securities’ Michael Genovese reiterated a “Hold” rating on Arista Networks Inc. (NYSE:ANET) with a $140 price target.
In the lead-up to this update, Arista Networks Inc (NYSE:ANET) has presented a strong growth narrative, driven by artificial intelligence and data-center expansion. Reaffirming its strong market position at Wells Fargo’s 9th Annual TMT Summit on November 18, the company outlined an ambitious 20% growth target for the next fiscal year. This reflects the company’s accelerating AI momentum, with Arista projecting $2.75 billion in AI-related revenue next year.
Furthermore, Arista Networks Inc. (NYSE:ANET) plans to acquire 25 to 40 new AI clients, including enterprises and sovereign entities. This comes on the back of surging demand, with the company’s deferred revenue jumping 87% in Q3, thanks to AI data-center projects.
This growth narrative for Arista Networks Inc. (NYSE:ANET) is well supported by analysts, with Citi emphasizing expected 28% sales growth in fiscal 2026 and reiterating its “Buy” rating on November 10. Moreover, Arista Networks Inc. (NYSE:ANET) also saw Barclays lift its target to $183 on November 5, which highlighted long-term tailwinds from AI and cloud computing adoption. UBS analyst David Vogt also cited a robust outlook and minimal short-term risks, while reiterating a “Buy” rating on Arista Networks Inc. (NYSE:ANET) and setting a $155 price target on December 3.
With the Extensible Operating System (EOS) platform, Arista Networks Inc (NYSE:ANET) delivers data-driven cloud, AI, and data-center networking solutions, serving global enterprises, service providers, and government clients.
8. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 96
Upside Potential: 19.53%
Intuit Inc. (NASDAQ:INTU) is one of the 15 best AI stocks to watch in December 2025.
As of December 8, 2025, roughly 80% of analysts remain bullish on Intuit Inc. (NASDAQ:INTU) with a median price target of $823.00. The consensus price target implies 25.41% upside.
On November 21, Intuit Inc. (NASDAQ:INTU) saw Goldman Sachs analyst Kash Rangan reaffirm his “Buy” rating with an $860 price target. This followed the company’s fiscal Q1 2026 results, announced the day before.
In fiscal Q1 2026, Intuit Inc. (NASDAQ:INTU) demonstrated the strength of its expanding AI-expert platform. Thanks to broad-based momentum across the company’s ecosystem, revenue climbed 18% YoY to $3.9 billion. The Global Business Solutions segment reported an 18% YoY increase to $3.0 billion. Meanwhile, the Online Ecosystem segment rose 21% and the QuickBooks Online Account segment surged 25%. A 27% increase at Credit Karma and steady gains at TurboTax and ProTax helped the Consumer segment record a 21% growth to $894 million.
The quarter also saw profitability accelerating sharply, with GAAP operating income increasing 97% and GAAP EPS rising 127% to $1.59. Meanwhile, non-GAAP EPS rose 34% to $3.34. During the quarter, Intuit Inc. (NASDAQ:INTU) also repurchased $851 million in stock and raised its quarterly dividend by 15%.
Looking ahead, Intuit Inc. (NASDAQ:INTU)’s management reaffirmed its full-year fiscal 2026 guidance. Accordingly, revenue growth of 12-13%, GAAP operating income growth of 17-19%, and non-GAAP EPS of $22.98-$23.18 are expected. The maintained guidance reflects management’s confidence in sustained expansion as the company boosts its AI capabilities across its product portfolio.
On the results, Intuit Inc. (NASDAQ:INTU)’s CEO Sasan Goodarzi commented,
“We delivered an exceptional first quarter as we continue to execute on our AI-driven expert platform strategy. Intuit is creating a system of intelligence, leveraging data, data services, AI, and human intelligence to fuel the success of consumers, small and mid-market businesses, and accountants. We launched significant done-for-you innovations across our platform that are helping businesses manage from lead to cash, and consumers manage credit building to wealth building, all in one place.”
With its TurboTax, Credit Karma, QuickBooks, and Mailchimp products, Intuit Inc. (NASDAQ:INTU), a global financial technology platform, offers AI-powered tax, credit, accounting, and marketing solutions.
7. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 104
Upside Potential: 34.29%
With significant hedge fund interest and upside potential, ServiceNow, Inc. (NYSE:NOW) secures a spot on our list of the 15 best AI stocks to watch in December 2025.
On December 8, 2025, ServiceNow, Inc. (NYSE:NOW) announced a CA$110 million investment, deepening its long-term commitment to Canada. With this investment, the company aims to accelerate AI adoption across the country’s public sector, funding Canadian-hosted, AI-ready digital infrastructure with advanced data, security, and operational controls. ServiceNow will also establish a new Canada Centre of Excellence, creating roughly 100 high-skilled jobs.
The Group Vice President and General Manager of ServiceNow Canada, Chris Ellison, stated,
“This is a major investment in Canada’s digital future. We’re deepening our commitment to the Canadian economy – creating high-skilled jobs, expanding our local footprint, and helping the Canadian public sector to modernize how it serves citizens. Our customers are asking for greater efficiency and the ability to scale with AI, and this investment ensures we can continue to deliver exactly that, securely and quickly.“
The investment reflects ServiceNow, Inc. (NYSE:NOW)’s growing partnerships with federal departments, provincial governments, crown corporations, and major cities. With this, the company aims to expand its ability to modernize public services through secure, AI-driven automation. Management sees the move as a critical step toward strengthening digital sovereignty and helping governments operate with greater efficiency in an AI-enabled future.
Meanwhile, on December 3, 2025, Barclays analyst Raimo Lenschow reiterated a “Buy” rating with a $1,225 price target. This came the day after ServiceNow, Inc. (NYSE:NOW) announced its plans to acquire Veza, a leader in identity security. With this deal, the company aims to integrate Veza’s patented Access Graph into the ServiceNow AI Platform, providing enterprises with enhanced control over human, machine, and AI-agent permissions. The integration of Veza will also strengthen security operations and enhance the AI Control Tower with unified, end-to-end identity governance.
ServiceNow, Inc. (NYSE:NOW) unifies systems, data, and workflows across enterprises with its AI-powered platform, which enables autonomous operations and secure, end-to-end arrangement of work for organizations globally.
6. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 119
Upside Potential: 25.48%
Salesforce, Inc. (NYSE:CRM) is one of the 15 best AI stocks to watch in December 2025.
As of December 8, 2025, roughly 80% of analysts remain bullish on Salesforce, Inc. (NYSE:CRM) with a median price target of $327.50. The consensus price target implies 26.19% upside.
Earlier, on December 5, 2025, The Fly reported that RBC Capital reiterated its “Sector Perform” rating on Salesforce, Inc. (NYSE:CRM) with a $250 price target. The update came following the company’s quarterly Customer Momentum & Success virtual update. The investment firm highlighted the company’s strong execution, growing momentum in AI-driven workflows, and rising adoption of its agentic enterprise framework. The collaborative ecosystem has already boosted bookings and net-new ARR. The firm expects a modest short-term financial impact of AI, but it believes the company is well-positioned to capture expanding enterprise demand for intelligence automation.
Meanwhile, on December 3, 2025, Salesforce, Inc. (NYSE:CRM) reported its fiscal Q3 2026 results. The quarter saw a 9% YoY revenue increase to $10.3 billion, meeting analyst expectations. Operating cash flow rose by 17% YoY to $2.3 billion, with free cash flow increasing 22% YoY to $2.2 billion. The strong top-line growth was driven by strength in the Agentforce and Data Cloud (Data 360) portfolios, where ARR surged 114%. This reflects the company’s strong momentum across its AI-focused product suite.
The strong quarterly performance also drew the attention of CMB International’s Saiyi He, who reiterated a “Buy” rating on Salesforce, Inc. (NYSE:CRM) with a $392 target. The analyst’s bullish stance stemmed from the company’s expanding product breadth, operating leverage, and confidence in its long-term financial trajectory.
Leveraging its secure platform that drives automation, intelligence, and growth, Salesforce, Inc. (NYSE:CRM) enables organizations to operate as agentic enterprises, unifying humans, AI agents, apps, and data.
5. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 122
Upside Potential: 52.72%
With significant hedge fund interest and upside potential, Oracle Corporation (NYSE:ORCL) secures a spot on our list of the 15 best AI stocks to watch in December 2025.
Thanks to the company’s expanding AI footprint, Bernstein’s analyst Mark Moerdler reiterated a “Buy” rating on Oracle Corporation (NYSE:ORCL) on December 8, 2025, with a $364 price target. The analyst believes the company’s significant incremental business indicates momentum heading into the next quarter, despite recent stock volatility and lingering concerns about capital expenditure and free cash flow trends. Moerdler believes Oracle, the world’s third-largest hyperscaler, is well-positioned to capitalize on the accelerating enterprise demand for AI infrastructure. Furthermore, he thinks management’s upcoming clarity on spending should help rebuild investor confidence.
Meanwhile, Oracle Corporation (NYSE: ORCL)’s strategic expansion in Europe continued, which reinforced the analyst’s bullish view. On November 19, 2025, the company launched its second public cloud region in Turin, Italy. The launch is expected to meet fast-growing demand for AI and cloud services. The launch of the new cloud region is part of the company’s distributed cloud strategy, providing Italian enterprises, startups, and public sector entities access to modern AI capabilities (generative AI and multicloud tools) while ensuring data sovereignty. The Turin facility, along with Oracle’s existing Milan region, is expected to significantly expand the company’s AI infrastructure capacity across key industries, supporting its broader European growth agenda.
The company is scheduled to release its Q2 FY 2026 results after market close on December 10.
Oracle Corporation (NYSE: ORCL) enables enterprises worldwide to modernize workloads, manage data, and deploy advanced AI and multicloud solutions through integrated cloud applications and autonomous infrastructure services.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 234
Upside Potential: 37.42%
NVIDIA Corporation (NASDAQ:NVDA) is one of the 15 best AI stocks to watch in December 2025.
On December 8, 2025, Reuters reported that the U.S. had approved NVIDIA Corporation (NASDAQ:NVDA)’s exports of the H200 processor to China, subject to a 25% fee on such sales. President Donald Trump, announcing the decision on Truth Social, described it as a strategic compromise designed to “protect national security, create American jobs, and keep America’s lead in AI.” However, exports of Nvidia’s flagship Blackwell chips have still not been allowed, with this arrangement avoiding a full ban that strategists feared would accelerate Huawei’s rise in China’s AI chip market.
NVIDIA Corporation (NASDAQ:NVDA) expressed optimism toward the move, calling the H200 export framework “a thoughtful balance that is great for America.” However, the outlook for demand remains uncertain amid Beijing’s ongoing pressure on domestic firms to avoid U.S. technology. Following the announcement, Nvidia’s shares rose 2% after hours, after recording a 3% rally earlier in the day.
This update came following CEO Jensen Huang’s comments on December 6, 2025. Huang warned that China’s structural advantages in construction speed and energy capacity could move past U.S. infrastructure readiness in the AI era. He urged that this imbalance must be addressed urgently by the U.S. despite the company’s multigenerational lead in AI chips.
Meanwhile, analyst sentiment surrounding NVIDIA Corporation (NASDAQ:NVDA) remains strong, with Bernstein reiterating an “Outperform” rating with a $275 price target. The firm sees the company’s internal rebuttal to bearish commentary as “broadly valid.” Accordingly, it dismissed concerns around Nvidia’s financial position.
NVIDIA Corporation (NASDAQ:NVDA) is focused on the development of advanced GPUs, AI systems, and accelerated computing platforms for data centers, gaming, automotive, robotics, and enterprise applications globally.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 273
Upside Potential: 24.60%
With significant hedge fund interest and upside potential, Meta Platforms, Inc. (NASDAQ:META) secures a spot on our list of the 15 best AI stocks to watch in December 2025.
As of December 8, 2025, roughly 90% of analysts remain bullish on Meta Platforms, Inc. (NASDAQ:META) with a median price target of $845.00. The consensus price target implies 26.72% upside.
On December 5, 2025, Rosenblatt Securities’ Barton Crockett reiterated a “Buy” rating on Meta Platforms, Inc. (NASDAQ:META) with a $1,117 price target.
Earlier on December 5, 2025, Meta Platforms, Inc. (NASDAQ:META) acquired the AI-wearables startup Limitless. The startup is known for its pendant-style device that boasts the capability to record conversations and generate searchable transcripts. Reinforcing the company’s existing partnerships with EssilorLuxottica brands, Ray-Ban, and Oakley for smart glasses, the acquisition is in line with Meta’s vision to deliver “personal superintelligence.”
Meta Platforms, Inc. (NASDAQ:META) plans to accelerate its next-generation device development by leveraging Limitless’ technology. Furthermore, the recent hiring of longtime Apple design executive Alan Dye signals the company’s increased focus on consumer hardware. Under the revised privacy terms, existing Limitless users will continue to receive support, while new sales will cease. Previously, the startup raised over $33 million from investors, including Sam Altman and A16z.
Moreover, on December 3, 2025, Meta Platforms, Inc. (NASDAQ:META)’s board declared a quarterly cash dividend of $0.525 per share, payable on December 23 to shareholders of record on December 15. This demonstrates the company’s continued shareholder returns amid massive AI investment plans.
Meta Platforms, Inc. (NASDAQ:META) is focused on developing AI-powered social platforms and immersive technologies, including Messenger, Instagram, and WhatsApp.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 312
Upside Potential: 29.44%
Microsoft Corporation (NASDAQ:MSFT) is one of the 15 best AI stocks to watch in December 2025.
Accelerating its global AI push, Microsoft Corporation (NASDAQ:MSFT) announced a $23 billion investment plan on December 9, 2025. A $17.5 billion investment leads the plan in India alone, its largest commitment in Asia. The company’s CEO, Satya Nadella, believes the four-year plan, starting in 2026, will see the construction of the country’s largest cloud computing presence. This includes a new hyperscale data center in Hyderabad and expansions in Chennai and Pune. Supporting India’s “AI-First future,” the company will double its pledge to train 20 million Indians in AI skills by 2030 through this initiative.
Microsoft Corporation (NASDAQ:MSFT)’s investment plan extends to Canada, where over $5.42 billion will be invested in new cloud capacity over the next two years. Deployments are expected in the second half of 2026. Furthermore, its partnership with Canadian AI startup Cohere will help the company deliver advanced AI models on Azure. Together, these moves reflect the company’s multi-regional cloud leadership.
Meanwhile, Microsoft Corporation (NASDAQ:MSFT) continues to draw analyst attention, as Morgan Stanley’s Keith Weiss reiterated a “Buy” rating with a $560 price target. The analyst’s bullish stance reflects price increases for Microsoft 365, AI-driven upgrades, and Copilot adoption. On that bullish note, Weiss projects $2-$6 billion in incremental revenue from FY27-FY29.
Additionally, on December 2, 2025, Microsoft Corporation (NASDAQ:MSFT) announced a quarterly dividend of $0.91 per share, payable on March 12, 2026. This demonstrates the company’s commitment to shareholder returns despite aggressive AI investments.
With its Azure, Microsoft 365, and AI platforms, Microsoft Corporation (NASDAQ:MSFT) delivers cloud, AI, software, and computing solutions globally.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 332
Upside Potential: 28.54%
With significant hedge fund interest and upside potential, Amazon.com, Inc. (NASDAQ:AMZN) secures a spot on our list of the 15 best AI stocks to watch in December 2025.
On December 9, 2025, The Fly reported that Guggenheim initiated coverage of Amazon.com, Inc. (NASDAQ:AMZN) with a “Buy” rating and a $300 price target. The investment firm acknowledged that the retail sector continues to be perceived as “structurally sick,” despite strong holiday sales. The firm also noted that the sector has dealt with tariffs without major damage to profitability. Moreover, Guggenheim highlighted that investors are not paying attention to the fact that the majority of the retail stocks the firm covers are operating at high gross margins, close to their peak.
Similarly, Amazon.com, Inc. (NASDAQ:AMZN) saw Rosenblatt Securities reiterate a “Buy” rating with a $305 price target. The update followed the company’s AWS re:Invent event. The firm highlighted October bookings, which exceeded third-quarter 2025 results, reflecting strong enterprise adoption. Moreover, the company’s growing role in AI and cloud markets, seen through its seven-year $38 billion deal with OpenAI and a $50 billion, 1.3 GW AI infrastructure build-out, boosted the firm’s confidence. Furthermore, Rosenblatt Securities believes the company’s valuation may not be fully reflecting its cash flow potential and market leadership.
Earlier, on December 9, 2025, Amazon.com, Inc. (NASDAQ:AMZN) launched Graviton5-based EC2 M9g instances. These new instances are faster (25% faster than the previous-generation chips) and more energy-efficient.
Operating a global e-commerce platform and cloud computing business, Amazon.com, Inc. (NASDAQ:AMZN) delivers retail, digital services, and scalable infrastructure solutions to consumers and enterprises worldwide.
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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