5 Best AI Chip Stocks to Buy According to Hedge Funds

3. Applied Materials Inc. (NASDAQ:AMAT)

Applied Materials Inc. (NASDAQ:AMAT) is one of the 10 best AI chip stocks to buy according to hedge funds.

On March 30, Cantor Fitzgerald raised the price target on Applied Materials Inc. (NASDAQ:AMAT) from $470 to $500. The firm reiterated an Overweight rating on the shares, which now offer an adjusted upside potential of more than 43%. This may signify the beginning of a multi-year secular uplift for the Semi equipment industry, the firm believes.

Back on February 25, Morgan Stanley maintained an Overweight rating while increasing the price target from $420 to $432 on Applied Materials Inc. (NASDAQ:AMAT). This yields a revised upside of 24% following the upward adjustment.

The stock was previously named as the Top Pick within the United States Semiconductor Production Equipment industry. According to the firm, the company has increased its wafer fab equipment market growth for the years 2026 and 2027. Forecasts for the company increased to 23% and 27% from 13% and 19%, and were driven by higher spending on DRAM memory.

Applied Materials Inc. (NASDAQ:AMAT) develops software and equipment for materials processing for the semiconductor and related industries worldwide. The company provides necessary hardware for ion implantation, chemical mechanical planarization, etching, and deposition. Additionally, it also markets cutting-edge wafer packaging technology and factory automation solutions.