In this article, we will take a look at the 20 Best AI Stocks to Buy According to Analysts.
The S&P 500 is on track to finish the year with a gain exceeding 17%, thanks to a 26% boost in technology stocks. The solid performance comes as investors continue to pour money into stocks related to artificial intelligence.
Meanwhile, market analyst Ed Yardeni believes the index will hit 7,700 next year, with a 60% chance of achieving his “Roaring 2020s” scenario. He noted, among other things, that tax breaks from the “One Big Beautiful Bill” that was passed this year and AI boom to be behind this growth.
That said, Wall Street had grown concerned that software and internet companies will limit their expenditures in data centers, pulling down chip stocks. The concern is that returns on large-scale AI investments will fall short of market expectations. In this context, Stifel analyst Brad Reback anticipates “a shift in investor sentiment towards the relative safety of incumbent technology given its highly recurring, stable, and very profitable revenue bases and attractive relative valuations.”
Nonetheless, Bank of America analysts stated that AI is “still the place to be” going into 2026 and that chip stocks are among the best ways to profit from the AI boom. The firm’s updated study casts doubt on the AI bubble theory, focusing instead on the positive outlook for chipmakers. Bank of America expects that the AI market will be volatile at first, but will eventually finish strong as data center buildouts continue and companies raise their manufacturing and equipment spending.
Our Methodology
To determine the best AI stocks to buy according to analysts, we conducted an in-depth review of companies advancing AI innovation and infrastructure. We focused on firms poised to benefit from the AI boom and showing strong analyst sentiment, including those with more than 20% upside potential, as of December 29.
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).
20. Ciena Corporation (NYSE:CIEN)
Analyst Upside: 22.08%
Number of Hedge Fund Holders: 70
Ciena Corporation (NYSE:CIEN) ranks among the best AI stocks to buy according to analysts. On December 12, UBS boosted Ciena Corporation (NYSE:CIEN)’s price target to $230 from $120 while keeping a Neutral rating on the company’s shares. The hike followed Ciena’s fiscal fourth-quarter results, which UBS reported were “sharply above” its forecasts but in line with broader investor projections.
The company’s Q4 revenue came in at $1.35 billion, with earnings per share at $0.91. This performance outperformed street expectations of $1.29 billion in revenue and $0.77 per share. The company’s overall sales increased by around 20%, owing to a significant 50% year-over-year spike in webscale customers, who make up 42% of total sales.
Ciena’s growth strategy is bolstered by an estimated $5 billion in backlog at the end of the year, which follows $7.8 billion in orders throughout fiscal 2025. Although the company did not issue a three-year revenue forecast, UBS expects Ciena Corporation (NYSE:CIEN) could achieve double-digit revenue increases in fiscal years 2027 and 2028 on account of significant AI infrastructure demand from hyperscalers.
Ciena Corporation (NYSE:CIEN) provides networking hardware, software, and services to operators worldwide. Its operations include optical transport and IP routing, network management, multi-domain orchestration, analytics, and consulting. The company’s recent operations have been bolstered by AI-focused networking solutions and data center expansion.
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