On February 9, Jay Woods of Freedom Capital Markets, Douglas Boneparth of Bone Fide Wealth, and Alex Kantrowitz of Big Technology together joined CNBC to discuss market rotation, tech volatility, and AI capex. Despite the broader market strength, the tech sector remains a primary source of uncertainty. Kantrowitz explained that while there is a general belief that AI will succeed, the market lacks clarity on where the value will ultimately settle: with chip manufacturers, model developers, or application consultants. This ambiguity leads to wild swings in stock prices as investors attempt to project outcomes 2 or 3 years into the future.
Additionally, Woods pointed out that the software sector has hit six-year lows relative to the S&P 500. He viewed this sell-off as overdone and suggested a short-term swing trade opportunity as key players prepare to report earnings. The scale of AI investment is further contextualized by comparing current corporate spending to historic government milestones. Kantrowitz referenced data showing that the AI capex from the four largest tech giants now exceeds the cost of the Apollo Moon program and is rivaled only by the Louisiana Purchase. With over $600 billion currently being deployed, he compared this era to the dot-com boom. He cited Amazon’s recent CapEx, which exceeded expectations by $50 billion, as evidence of the pressure companies feel to invest in AI agents and chatbots to ensure their survival.
That being said, we’re here with a list of the 8 under-the-radar AI stocks to buy.
Our Methodology
We sifted through financial media reports and stock screeners to compile a list of hidden AI stocks. We then selected 8 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2025.
Note: All data was sourced on February 10.
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).
8 Under-the-Radar AI Stocks to Buy
8. Lemonade Inc. (NYSE:LMND)
Number of Hedge Fund Holders: 32
Lemonade Inc. (NYSE:LMND) is one of the under-the-radar AI stocks to buy. On January 16, Citizens increased the price target for Lemonade to $85 from $80 while maintaining an Outperform rating. The firm expects Q4 2025 results to show lighter catastrophe losses and limited mark-to-market impacts, with investor attention focused on pricing trends despite weakness in property lines.
The firm noted that while property pricing is declining, returns remain strong and casualty lines continue to see solid rate increases, indicating a market in transition rather than one that is broadly soft.
On January 14, Cantor Fitzgerald raised the price target for Lemonade Inc. (NYSE:LMND) to $92 from $85 with an Overweight rating. The firm noted that an initial positive outlook on insurance brokers seems premature and overly optimistic, as near-term fundamentals are expected to decline before showing improvement. While the subgroup remains of interest, the firm anticipates negative consensus organic growth revisions in the interim.
Lemonade Inc. (NYSE:LMND) provides various insurance products in the US, Europe, and the UK. The company offers renters & homeowners, building, car, pet, and life insurance products, as well as landlord insurance products.
7. Oscar Health Inc. (NYSE:OSCR)
Number of Hedge Fund Holders: 40
Oscar Health Inc. (NYSE:OSCR) is one of the under-the-radar AI stocks to buy. On January 9, UBS upgraded Oscar Health to Neutral from Sell and raised the price target to $17 from $12. The firm believes that Oscar’s exchange enrollment is holding up better than feared despite the expiration of enhanced subsidies. UBS suggests the shares are fairly priced at this level.
On January 5, Barclays analyst Andrew Mok also upgraded Oscar Health to Equal Weight from Underweight and increased the price target to $18 from $13. The firm anticipates that managed care stocks will benefit in 2026 from potential margin expansion and an investor rotation away from artificial intelligence stocks toward de-rated underperformers.
Furthermore, Andrew Mok suggested that Oscar Health Inc. (NYSE:OSCR) is attractively priced because the market is currently over-discounting the negative impacts of expiring subsidies.
Oscar Health Inc. (NYSE:OSCR) is a healthcare technology company in the US that offers health plans to individuals, families, employees, and small group markets.
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