In this article, we will list the 5 Best AI Chip Stocks to Buy According to Hedge Funds. Please visit 10 Best AI Chip Stocks to Buy According to Hedge Funds if you’d like to see an extended list and how we came up with the list of best AI chip stocks.
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5. ASML Holding N.V. (NASDAQ:ASML)
ASML Holding N.V. (NASDAQ:ASML) is one of the 10 best AI chip stocks to buy according to hedge funds.
On March 25, SK Hynix Inc. (KSE:HXSCL) announced investing approximately $8 billion into advanced ultraviolet lithography chip production equipment provided by ASML Holding N.V. (NASDAQ:ASML) until 2027.
The move is aimed at competing with Samsung Electronics Co., Ltd. (SSNLF) to supply DRAM and HBM memory chips, according to Bloomberg’s reporters Yoolim Lee and Sarah Jacob. The investment agreement between the two companies remains valid until 2027.
On March 5, Didier Scemama from Bank of America Securities increased the price target on ASML Holding N.V. (NASDAQ:ASML) from 1,868 to $1,886. The analyst reaffirmed a Buy rating on the stock that now offers an adjusted upside potential of more than 43% following the upward revision.
According to Scemama, the company increased its estimates due to constrained Foundry and DRAM supply. Consequently, the firm marginally increased its earnings per share estimates by a range of 4% to 6% for the calendar years 2026 to 2028.
ASML Holding N.V. (NASDAQ:ASML) offers advanced lithography solutions to the semiconductor manufacturing industry. The company provides the deep and extreme UV systems needed for pattern integrated circuits. Additionally, it uses electron beam equipment, optical metrology systems, and computer software for thorough chip defect investigation.
4. Lam Research Corp. (NASDAQ:LRCX)
Lam Research Corp. (NASDAQ:LRCX) is one of the 10 best AI chip stocks to buy according to hedge funds.
As of the April 3 closing, consensus sentiment for Lam Research Corp. (NASDAQ:LRCX) was strongly bullish. The stock received coverage from 28 analysts, 24 of whom assigned Buy ratings and 4 gave Hold calls. With no Sell rating, it has a projected median 1-year price target of $283.81, which results in an upside potential of almost 30%.
On April 2, Stephan Lingnau from Erste Group downgraded Lam Research Corp. (NASDAQ:LRCX) to Hold from Buy. The company’s reliance on helium for tool production is one of the supply chain risks for Lam. According to Lingnau, there is a greater chance that gross and operational margins would decline.
On March 10, Tom O’Malley from Barclays increased the price target on Lam Research Corp. (NASDAQ:LRCX) from $250 to $255. The analyst maintained an Equal Weight rating for the stock, which leads to a revised upside potential of almost 17% at the prevailing level. O’ Malley increased estimates for the wafer fab equipment companies, quoting a strong investment environment.
Lam Research Corp. (NASDAQ:LRCX) is a manufacturer and global supplier of semiconductor processing equipment that is useful for the fabrication of integrated circuits. The company specializes in thin film deposition, wafer cleaning, plasma etch, and photoresist strip. It also offers products like Da Vinci, DV-Prime, and EOS for wafer cleaning applications.
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.
2. Advanced Micro Devices Inc. (NASDAQ:AMD)
Advanced Micro Devices Inc. (NASDAQ:AMD) is one of the 10 best AI chip stocks to buy according to hedge funds.
On April 1, Wells Fargo maintained the price target on Advanced Micro Devices Inc. (NASDAQ:AMD) at $345 while reiterating an Overweight rating. The firm recently placed AMD in its second-quarter Tactical Ideas List. According to the firm, the company is exhibiting a favorable setup as it heads towards its first quarter results.
The positive outlook is driven by strong demand for EPYC server CPU, along with new GW-scale AI GPU announcements. The upcoming Accelerating AI event in July will likely serve as another positive driver for the company.
On April 2, UBS reiterated a Buy rating and $310 price target on Advanced Micro Devices Inc. (NASDAQ:AMD), citing confidence in revenue growth for 2027. The firm believes that beyond the engagements with OpenAI and Meta Platforms, additional potential exists for a third gigawatt-scale deal, and Microsoft would likely be the best candidate.
As per UBS, because of the shipment of MI450 in 2026 under the OpenAI deal, and subsequently the shipment by Meta, AMD presents a compelling investment case for the second half of this year.
Advanced Micro Devices Inc. (NASDAQ:AMD) is a multinational semiconductor company that designs high-performance computing, graphics processing units, and visualization technologies. The company also offers AI accelerators, microprocessors, embedded processors, and SoC products. The business is structured around three segments, i.e., Data Center, Client & Gaming, and Embedded.
1. Micron Technology Inc. (NASDAQ:MU)
Micron Technology Inc. (NASDAQ:MU) is one of the 10 best AI chip stocks to buy according to hedge funds.
On March 15, Micron Technology Inc. (NASDAQ:MU) made the announcement of its acquisition of the P5 site of Powerchip Semiconductor Manufacturing Corporation on March 15 after signing the agreement on January 17, 2026. The new site would act as an extension of Micron’s vertically integrated mega campus in Taichung, which is about 15 miles away, along with nearly 300,000 sq. ft. of cleanroom capacity for the 300mm wafers.
Construction of the retrofit for the existing cleanrooms begins immediately after the deal closing, and product shipments are anticipated starting in fiscal 2028. Moreover, Micron Technology is also planning to continue its expansion plans with the construction of another similar site at Tongluo before the end of fiscal 2026, which will add approximately 270,000 sq. ft. of cleanroom area to the new facility.
The purpose of the new facility is to produce advanced DRAM products, such as HBM, to meet the rising demands due to increased AI usage. Speaking at the event, Executive Vice President of Global Operations Manish Bhatia expressed his views regarding the importance of the memory for product performance and said that the new facility gives Micron a stronger edge towards exploiting future opportunities.
Micron Technology Inc. (NASDAQ:MU) is engaged in the development of storage and memory solutions. It offers products such as high-bandwidth memory, CXL-based memory, graphics memory, and LPDDR components and modules. The company also provides various types of multichip packages (MCP), such as flash storage-based, multimedia card-based, and NAND-based MCPs.
While we acknowledge the potential of MU 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 MU and that has 100x upside potential, check out our report about the cheapest AI stock.
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