In this article, we will take a look at the 5 Best AI Stocks to Buy and Hold for the Next 5 Years. For a deeper discussion and an extended list, please see the 15 Best AI Stocks to Buy and Hold for the Next 5 Years.
5. Coherent Corp. (NYSE:COHR)
Number of Hedge Fund Holders: 114
Coherent Corp. (NYSE:COHR) is among the Best AI Stocks.
On June 22, JPMorgan reiterated its Overweight rating after hosting meetings with Coherent Corp. (NYSE:COHR) management. The firm reported that the company described aggregate datacom pricing as healthy, with demand continuing to outpace supply and adoption cycles remaining compressed.
JPMorgan reported that the company’s management is on track with rolling out its new “co-packaged optics” technology. The firm still expects to start making significant money from this technology in the second half of 2026 as customers begin using it on a larger scale. Revenue is expected to grow even further in the second half of 2027 as customers fully expand their systems. The firm also mentioned that this timeline might move faster than expected.
On June 2, Raymond James raised its price target on Coherent Corp. (NYSE:COHR) to $435 from $371. The firm maintained a “Strong Buy” rating on the stock. In a note, the firm stated the company is in a great position across artificial intelligence data center interconnect architectures. The firm said Coherent’s broad optical technology portfolio and intellectual property remain underappreciated, with more upside possible from both transceiver and non-transceiver sales.
Coherent Corp. (NYSE:COHR) produces, refines, manufactures, and markets engineered materials, optoelectronic components and devices, and lasers for the industrial, communications, electronics, and instrumentation markets. It works through networking, materials, and laser areas.
4. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 133
On July 6, Reuters reported that ASML Holding N.V. (NASDAQ:ASML) remains at the center of semiconductor trade tensions as Dutch Trade Minister Sjoerd Sjoerdsma begins a three-day trade mission to China.
Reuters said Sjoerdsma recently traveled to Washington. He discussed proposed US legislation that could further tighten restrictions on chipmaking equipment sales and servicing for China, potentially affecting the lithography giant’s business.
Reuters also noted Sjoerdsma will meet Chinese Commerce Minister Wang Wentao for talks on economic issues and bilateral relations. The Dutch minister said, “Over the past few decades, we’ve built robust trade ties with China, and our goal with this visit is to further strengthen our bilateral trade relationship.” He also commented, “Raising points of concern is part of that.”
Reuters disclosed that Dutch officials still argue export controls should be coordinated internationally rather than imposed unilaterally in ways that disproportionately affect Dutch companies.
ASML Holding N.V. (NASDAQ:ASML) develops, produces, markets, sells, upgrades, and services advanced semiconductor equipment systems. It includes lithography, metrology, and inspection systems.
3. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 134
Advanced Micro Devices, Inc. (NASDAQ:AMD) is among the Best AI Stocks.
On July 6, Goldman Sachs raised its price target on Advanced Micro Devices, Inc. (NASDAQ:AMD) to $640 from $450. The firm maintained a Buy rating on the stock.
On June 16, Advanced Micro Devices, Inc. (NASDAQ:AMD) and Rackspace Technology signed a definitive agreement to install an initial 30 megawatts of AMD-based AI compute infrastructure across Rackspace’s global data centers. This legally binding contract authorizes a preliminary memorandum of understanding announced by the two companies in May. The launch of this AI computing power is scheduled to take place in phases from late 2026 through 2028.
The companies said the placement will help regulated enterprise workloads using AMD Instinct GPUs and AMD EPYC CPUs within Rackspace’s Enterprise AI Cloud architecture.
CEO of Rackspace Technology, Gajen Kandiah, said the collaboration combines compute infrastructure with a governed operating model under a single accountable partner.
Senior Vice President and General Manager of Compute and Enterprise AI at AMD, Dan McNamara, commented that the partnership will help regulated enterprises place scalable AI infrastructure. The companies also committed joint sales and marketing resources to pursue enterprise customers across regulated industries.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company working in high-performance computing and graphics solutions.
2. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 138
On July 6, Morgan Stanley bumped up its price target on Applied Materials, Inc. (NASDAQ:AMAT) to $647 from $502. The firm maintained an “Equal Weight” rating on the shares.
On June 16, Reuters reported that Applied Materials, Inc. (NASDAQ:AMAT) signed a long-term agreement with EssilorLuxottica to make augmented reality display technology and artificial intelligence glasses. The companies said they will focus research and development on advanced optical technologies and scale marketing of AI glasses.
Reuters noted that EssilorLuxottica already leads the artificial intelligence glasses market through its long-term partnership with Meta, selling smart glasses under the Ray Ban and Oakley brands. In 2025, it launched its first display-equipped device, the Ray Ban Meta Display.
The report said that artificial intelligence-powered glasses have cameras, microphones, speakers, and voice assistants in conventional frames. Moreover, augmented reality presents greater optical challenges.
Reuters also said Applied Materials, Inc. (NASDAQ:AMAT) manufactures the specialized semiconductor equipment needed to produce the ultra-thin material layers used in AR displays.
Applied Materials, Inc. (NASDAQ:AMAT) is a firm that provides materials engineering solutions used in semiconductor manufacturing. Its segments include Semiconductor Systems and Applied Global Services.
1. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 173
Broadcom Inc. (NASDAQ:AVGO) is among the Best AI Stocks.
On July 6, Reuters reported that Broadcom Inc. (NASDAQ:AVGO) expanded its partnership with Apple through 2031 to develop and supply custom chips. It extends a relationship that analysts estimate generates about 20% of Broadcom’s annual revenue.
The report said the agreement eased investor concerns that Apple would replace the semiconductor firm’s components with in-house alternatives. It also reinforces the company’s role as a key supplier of radio frequency, Wi-Fi, Bluetooth, and networking chips.
Emarketer analyst Jacob Bourne said the deal gives Apple higher supply chain certainty during chip shortages. The contract also provides Broadcom Inc. (NASDAQ:AVGO) with reassurance as Apple develops its own silicon.
Reuters noted the companies signed a multibillion-dollar agreement in 2023 for 5G radio frequency components. It said that rising AI inference demand has intensified competition for custom chips and advanced processors.
Broadcom Inc. (NASDAQ:AVGO) is a multinational technology business that designs, develops, and sells semiconductors and infrastructure software solutions. It works through Semiconductor Solutions and Infrastructure Software divisions.
While we acknowledge the potential of AVGO 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 AVGO and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 15 Best Stocks to Buy for the Second Half of 2026 and 10 Best Under-the-Radar Stocks to Invest In.
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