Blockbuster AI deals with eye-popping numbers have started to make Wall Street uneasy amid growing concerns about stock valuations and parallels between today’s AI boom and the dot-com bubble. However, many analysts believe there are no signs of AI CapEX slowing and tech stocks still have a lot of room to run. There are also hopes that the AI-led rally will broaden out to other companies as people begin to use and adopt AI applications.
Rob Sechan from NewEdge Wealth said in a latest program on CNBC that the AI-led growth of companies is “real” and eventually the rally could move to AI applications. He believes there are no indications of a slowdown in AI spending. The analyst sees the S&P 500 touching 7,000.
“When we talk about bubbles we tend to lean towards valuation and we all pay attention to valuation on this show but it’s when the earnings trajectory is going to show when and when you’re going to see that change is when capex starts to slow. We’re seeing really no signs of capex slowing. And so until you see that pivot point, I think it’s going to be more of the same as we’ve said before on the show, but at some point you’re going to have to switch from the cyclicals, the semis, the mag sevens to the application of this. I think there’s a lot of hope that, you know, you’re going to see a broadening out in this market too, which we have not seen. The cap weighted indices are doing really well. The others aren’t. And so I think we’re more of the same, at least through year end. And I think that’s probably what propels us to, you know, 7,000 on the S&P.”
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For this article, we picked 10 stocks currently making moves on Wall Street. With each stock, we have mentioned the number of hedge fund investors. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. DigitalBridge Group Inc (NYSE:DBRG)
Number of Hedge Fund Investors: 44
Dan Veru, Palisade Capital Management senior partner and CIO, said in a latest program on CNBC that DigitalBridge is a decent stock to buy amid the company’s exposure to AI and infrastructure.
“It’s a great read through into some of the key investments that are being made in the AI and AI infrastructure part of the economy, but you’re not taking technology risk because you’re also investing in some of the more infrastructure-related parts. We need power generation. They’re a play on that. They have a lot of embedded gains that are yet to be realized because they do make technology investments and they’ve been raising capital from institutions and now individual investors, and there’s talk that because of their expertise in identifying different areas of technology to invest in, perhaps other asset managers might view them as an attractive acquisition.”
Ave Maria Focused Fund stated the following regarding DigitalBridge Group, Inc. (NYSE:DBRG) in its Q3 2024 investor letter:
“DigitalBridge Group, Inc. (NYSE:DBRG): DigitalBridge is currently raising their third flagship digital infrastructure fund. If the raise is successful, DigitalBridge’s stock price should prove to be quite cheap at current levels. If the raise is unsuccessful, DigitalBridge will likely be bought by a larger competitor. There are reasons to be optimistic about the fund raise. Switch, the leading operator of AI data centers, was taken private by DigitalBridge just under two years ago at an ~$11B valuation. There was a recent news report suggesting it may go public at a $40B valuation. That valuation could be too optimistic, but in our view there is little doubt that Switch will be a successful investment for DigitalBridge, and its IPO could provide a boost to DigitalBridge’s fund raising efforts.”
9. BlackRock Inc (NYSE:BLK)
Number of Hedge Fund Investors: 58
Jason Snipe, the Founder and Chief Investment Officer of Odyssey Capital Advisors, explained in a latest program on CNBC why he likes BlackRock. Here is what the analyst said:
“I think it speaks to innovation for BlackRock Inc (NYSE:BLK). You know, listen, I mean, AUM growth is up 15%, revenue growth was up 13%. You know, it’s the largest player in the ETF business. So, I continue to like this name. I think they’re focusing on the right segments and we’ll continue to hold it as a financial core holding in the financial sector for us.”
Nightview Capital stated the following regarding BlackRock, Inc. (NYSE:BLK) in its Q4 2024 investor letter:
“Finance is transforming. Technology is democratizing access, reshaping wealth management, and enabling entirely new models of investing. From algorithmic trading to digital-first advisory platforms, the sector is evolving rapidly. Investors demand smarter, more sustainable options. The potential is significant, and we are focused on companies shaping how people save, invest, and transact in the years to come.
BlackRock, Inc. (NYSE:BLK): Core Opportunity: BlackRock leverages its scale and innovation to lead in asset management, ETFs, and financial technology.
Key Highlights: Massive Scale: AUM exceeds $10.6 trillion, supporting diverse revenue streams.
AI and Sustainability: Investments in AI, data centers, and energy transitions unlock trillions in opportunities.
Financial Strength: Operating income grew 12% YoY, with margin expansion of 160 basis points.
Investment Case: BlackRock’s consistent innovation, strategic partnerships, and shareholder returns position it as a leader in financial evolution. Its mix of growth and stability makes it an attractive long-term investment.”
8. Colgate-Palmolive Co (NYSE:CL)
Number of Hedge Fund Investors: 59
Jason Snipe, the Founder and Chief Investment Officer of Odyssey Capital Advisors, said in a latest program on CNBC that he likes Colgate and believes the company will see earnings recovery into next year.
“I like 3 to 5% organic growth, sales growth for the name, raising dividend in 60 straight years. So the dividend now is at two and a half percent. Their management team also is focusing, has multiple levers on managing costs and extracting inefficiencies. So I think for me this is one that obviously has been in the penalty box so far this year, but I think that earnings recovery will come through into next year.”
Diamond Hill Large Cap Strategy stated the following regarding Colgate-Palmolive Company (NYSE:CL) in its Q4 2024 investor letter:
“As valuations have continued rising and the economic cycle has gotten relatively long in the tooth, we’ve thought carefully about where and how we are exposed to more cyclical stocks. As such, we initiated just two new positions in Q4: Colgate-Palmolive Company (NYSE:CL) and the aforementioned lululemon.
Colgate-Palmolive is a high-quality business with leading positions in oral care, home products and pet nutrition. Historically, the company has allocated capital well, and it produces significant free cash flows. Shares were pressured in Q4 primarily, we believe, in sympathy with near-term macroeconomic concerns rather than any fundamental issues at the business. We consequently capitalized on the underperformance and compelling valuation to start a position.”
7. Repligen Corp (NASDAQ:RGEN)
Number of Hedge Fund Investors: 73
Dan Veru, Palisade Capital Management senior partner and CIO, recently talked about Repligen, a life sciences company involved in the development and production of materials used in the manufacture of biological drugs. Here is why the analyst likes the stock, which is up 10% over the past 12 months.
“You need a clearance event. You need something to happen to remove the uncertainties, and I think what’s happened in the last couple of days vis-à-vis drug pricing really was that clearance event. Repligen Corp (NASDAQ:RGEN) is no different than Danaher in many respects, which you and I have talked about as well. They are part of the whole ecosystem of how you make drugs and a very important component of that. The stock’s been plagued by simply uncertainty over the direction of drug pricing. Now, at least you have better clarity, and it’s more and more important as we get more that we’re going to need more drugs to come out, and they would play in that ecosystem of how new drugs are formed.”
Prosper Stars & Stripes Fund stated the following regarding Repligen Corporation (NASDAQ:RGEN) in its Q1 2025 investor letter:
With the above factors in mind, the Composite strives to use periods of market dislocation to reinvest in some of the high-quality stocks that we monitor on our focus list for attractive entry points. One such stock is Repligen Corporation (NASDAQ:RGEN). The company is a global supplier of hardware and consumables to pharmaceutical, biotechnology, and contract drug manufacturing organizations (“CDMOs”). Repligen is a “picks & shovels” provider of essential tools to the life sciences industry; approximately 80% of the products it sells are consumables. The bioprocessing industry historically grows consistently between 8-12% per year. Repligen is seen as an innovator across key areas of the upstream and downstream value chain in drug development, and we believe approximately 80% of the company’s portfolio has little to no real competition. Since the consumables it sells typically represent less than 5% of the total cost to manufacture a biologic, Repligen enjoys strong pricing power. The life science tools (“LST”) industry experienced several headwinds over the past two years from post-COVID de-stocking and slowing sales in China. However, more recently, there have been green shoots as Repligen’s pharma and consumable orders have increased mid-to-high teens. In addition, there were near-record 64 new drug approvals in 2024. The post-COVID hangover appears to be coming to an end; we believe Repligen’s sales can accelerate to 15+% in 2025. We believe this growth would be accompanied by at least 100 basis points (“bps”) of margin expansion and strong free cash flow. Recent reports from peers including Danaher and Satorius support the view that trends are improving. Further, the desire to add domestic capacity for drug manufacturing is a medium to long term catalyst that will support growth rates. Repligen has high visibility and accelerating revenues and profits and we anticipate meaningful upside to ~$180 price based on a 10x EV/S multiple.”
6. Expedia Group Inc (NASDAQ: EXPE)
Number of Hedge Fund Investors: 79
Mark Mahaney, Evercore ISI head of internet research, said in a latest program on CNBC that Expedia is his top pick because the stock’s valuation is cheap. The analyst explains the reasons why he’s bullish on the stock:
“Expedia is one of our top picks for the year. It’s kind of a contrarian call on our part, but part of it is it’s darn cheap. This thing still trades well under a market multiple, 13–14 times earnings. You have new management in place. If they are better executors and you can see the growth rates between them and the industry leaders, Booking and Airbnb Inc (NASDAQ:ABNB), they have been converging. If that convergence continues, the valuation convergence is going to continue too, and the best way to play that I think is to be long Expedia. That’s one of the reasons why it’s one of our top picks.”
5. ServiceNow Inc (NYSE:NOW)
Number of Hedge Fund Investors: 106
Jason Snipe, the Founder and Chief Investment Officer of Odyssey Capital Advisors, said in a latest program on CNBC that he likes ServiceNow because the company is starting to monetize its AI tools.
“ServiceNow Inc (NYSE:NOW) stock is down 14% year-to-date. They are starting to monetize their AI tools. I like this.”
ClearBridge Select Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its second quarter 2025 investor letter:
“We did see good results from AI-ecosystem holdings in IT and industrials. Within IT, ServiceNow, Inc. (NYSE:NOW) remains a leader among its software peers in the monetization of generative AI, with a target of $1 billion in annual contract value from AI-related products by 2026.”
4. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 115
Craig Irwin, Roth Capital senior research analyst, said in a recent program on CNBC that Tesla Inc (NASDAQ:TSLA) has “lots of room to run” because of its auto business, robo taxis and other catalysts. Here is how the analyst made his case for the company:
“The reason they’re beating this quarter is because the federal EV tax credit is going away, right? There’s a small pull forward of demand, and then everybody else has been building these compliance businesses and these businesses to actually grab the subsidies instead of doing what Elon Musk is doing — building a great company, right? All those guys are retreating from the market. So the market’s going to mix towards Tesla over the next several quarters,” Irwin said.
The analyst said people “don’t care” if robotaxis are delayed and argued that Tesla Inc (NASDAQ:TSLA) is better than Alphabet’s Waymo.
“Waymo got three monkeys in the back seat. Let’s talk about tele-operation engineers — three drivers, not one. Tesla’s going to do better than that. Right. So the potential for a trillion-dollar valuation around the robo taxi business is huge. People will discount that out. Elon is back. He’s in the saddle. He’s a wildly creative guy, free thinker, which was held against him for a little while. But you know what? He is an alchemist, and this stock’s going to work.”
Baron Focused Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2025 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles (EVs), solar products, and energy storage solutions, while also developing advanced real-world AI technologies. Despite ongoing macroeconomic challenges and regulatory complexities, shares climbed after Tesla completed a limited commercial rollout of its highly anticipated robotaxi business in Austin—following more than a decade of development and billions of dollars in investment. This milestone signals a potentially transformative shift in the automotive industry and opens up a sizable new market beyond the company’s core operations. Investor sentiment also improved after Elon Musk stepped back from government-related engagements, boosting confidence in Tesla’s near-term execution. Tesla introduced a refreshed Model Y globally, featuring design and performance upgrades, and outlined plans to unveil new mass-market models starting next quarter. Meanwhile, the company is progressing toward scaling production of its humanoid robot, adding another dimension to its long-term growth story.”
3. Broadcom Inc (NASDAQ:AVGO)
Number of Hedge Fund Investors: 156
Stacey Rasgon, senior U.S. semiconductor analyst and managing director at Bernstein, recently talked about major semiconductor companies and latest AI deals in a program on CNBC. Rasgon believes there will be an “air pocket” for major AI stocks in the future, but he does not see a major decline happening anytime soon.
“I mean you worry about sustainability and that’s always been the big concern but I think a lot of the things that we’ve seen over the last few weeks and months suggest that things can be sustainable for longer, right?” Rasgon said. “We had Broadcom Inc (NASDAQ:AVGO) report earnings a few weeks ago where they talked about a new major AI customer next year, looks like it’s OpenAI, and the CEO Hock Tan, who’s like 73 years old by the way, has agreed to stick around till 2030 and his retention incentives are all around AI revenues that get to some very big numbers by the end of the decade if he hits his targets, you know, as much as $120 billion. And I’ve said for a long time at some point there will probably be an air pocket or something. I mean, it has to be, but it’s not now. It’s not this year. Doesn’t look like it’s next year. It may not be 2027. For now, I think these can still work.”
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its second quarter 2025 investor letter:
“Shares of fellow semiconductor giant Broadcom Inc. (NASDAQ:AVGO) also outperformed during the quarter, as customer demand for the company’s custom accelerator chips remained insatiable despite the uncertain economic environment. The company is on pace for 10 consecutive quarters of AI-related semiconductor growth and expects continued strong demand persist, due to the sizable AI opportunity. In addition to its dominant market position, the company’s history of strong capital returns to shareholders results in a favorable outlook for a sizable investor base.”
2. Alphabet Inc (NASDAQ:GOOG)
Number of Hedge Fund Investors: 178
Brent Thill of Jefferies recently talked about a study on AI chatbots his team conducted and discussed the results. Based on the research results, Jefferies believes Google Gemini could become the leading copilot for consumers. Here is what Thill said:
“We took 10 questions. We took our entire research team and we had the team independently go through and use Perplexity, ChatGBT, and Google Gemini. And everyone independently scored what they found, whether it was looking for a laptop, looking for shoes, effectively doing a restaurant search, completely different skills in terms of what we were looking for. And we then ranked it and Chetchi GPT came out ahead overall on the scoring, but Gemini was right there from Google in a very close position.”
Thill said different chatbots have their own strengths and weaknesses, and we may need multiple tools instead of relying on a single one.
“We see a future where we’re all going to have multiple agents working for us because all the agents have different strengths and that maybe at one point we’re going to need an agent to manage all the agents because there’s going to be so many great agents. One may be good at booking restaurant reservations, one might be good looking for other, more advanced things. So overall, we’re continued to be bullish about Google’s position in this.”
Mairs & Power Balanced Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2025 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) led underperformance in the Communications sector during the first half of the year as there is increasing concern about the impact of generative AI on Alphabet’s search business and whether it will be able to meaningfully respond. We have been trimming the Fund’s holdings in Alphabet as part of the transition to Amazon but also to reflect lower confidence in the company’s ability to maintain its competitive advantage longer term.
1. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 235
Josh Brown from CNBC recently said in a program that NVIDIA Corp (NASDAQ:NVDA) remains the best way to play the AI trade despite the stock’s bull run. He said most major AI deals end up benefiting NVIDIA Corp (NASDAQ:NVDA). Brown thinks investors should focus on the obvious winner in the space instead of thinking about the “next Nvidia.”
“NVIDIA Corp (NASDAQ:NVDA) is still the most obvious way to play the AI buildout theme. Just look at the CoreWeave deal today. It’s a $14.2 billion agreement with Meta. It’s great for CoreWeave because it diversifies them a little bit away from Microsoft and adds another monster company to their roster of clients in a very big way. But what does Meta get out of this? They’re getting access to NVIDIA Corp (NASDAQ:NVDA) Grace Blackwell 300 systems because CoreWeave already has that infrastructure in place and ready to go. This — all of this — benefit accrues to NVIDIA Corp (NASDAQ:NVDA) in the end. It may not go up the most from here relative to other AI plays, but it is the foolproof name for people that want to gain sector exposure or want to gain thematic exposure, and I don’t really see that changing. They’ve got this unbelievable competitive position. We’ve been talking about it on the show forever because it’s true, and everyone’s always like, well, what’s the next, what’s the new NVIDIA Corp (NASDAQ:NVDA)? There are other ways to play AI. We’ve seen other chip companies work out. I’ve talked about Lam Research on the show. We’ve had Broadcom. We’ve had AMD. But in the end, I still think people would be better off looking for the obvious answers and defaulting to them. And if you’ve done that with NVIDIA Corp (NASDAQ:NVDA), congratulations. We’re now breaking into a new range, and who knows how high this one can go.”
Baird Chautauqua International and Global Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) reported first quarter results that were extremely solid. The company took a write-down on China-specific datacenter products and flushed out any future China contributions from their guidance, following the new export restrictions introduced in April. Demand commentary ex China was extremely encouraging—Nvidia is outgrowing expectations despite supply constraints and outgrowing competing ASIC products by a large margin. We have been underweight Nvidia relative to the benchmark, which was up 46% in the quarter, given our short-to medium-term concerns that the feverish AI datacenter build may be resulting in overcapacity, which has not come to bear.”
While we acknowledge the potential of NVDA 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 NVDA and that has 100x upside potential, check out our report about this cheapest AI stock.
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