Markets are assessing the Federal Reserve’s latest rate cut amid a weakening jobs market and risks to GDP growth. However, long-term investors are focusing on what’s been driving the market for months: artificial intelligence. Bartlett Wealth Management’s Holly Mazzocca said in a recent program on CNBC that the AI trade will continue to remain strong, and pointed to some market opportunities beyond the Mag. 7 companies.
“Well, we certainly think that there’s a level of interest here for the AI trade to continue, and that’s what we’re seeing,” the analyst said. “We are looking for how that trade can expand beyond the Magnificent 7. So, while we long-term continue to favor those big tech names, we’re also looking for opportunities that start to look at how you’re seeing productivity engage across the market.”
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For this article, we picked 10 stocks analysts were recently talking about. For 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. Oklo Inc (NYSE:OKLO)
Number of Hedge Fund Investors: 36
Dimple Gosai, Bank of America clean energy analyst, explained in a recent program on CNBC why she’s bullish on Oklo Inc (NYSE:OKLO). She has a Buy rating and $92 price target on the stock.
“I think the one thing that we really need to um unpack here is where the end demand is coming from. So, today if you think about electricity demand, we think that that might increase by 25% by 2030. Half of that is going to come from AI and data centers. Now today Oklo has the largest pipeline of all Small Modular Reactors at 14 gawatt and majority of that is backed by hyperscalers right 12 gawatt of that alone come comes from switch and then they’ve got you know orders from from the likes of RoPower and Equinix so as long as the data center trend continues to to unfold and we see more capex going in there I think this is going to undermount growth.”
9. O’Reilly Automotive Inc (NASDAQ:ORLY)
Number of Hedge Fund Investors: 62
Josh Brown, CEO of Ritholtz Wealth Management, said in a recent program on CNBC that auto parts company O’Reilly Automotive Inc (NASDAQ:ORLY) is one of the best cheap stocks in the market.
“This is one of the best longtime long-term charts I think I’ve ever seen. It’s basically very basic. It’s auto parts, so it’s not AI. But it’s substantially cheaper than it ought to be given how well they’ve executed. And what’s happening here is it’s a cannibal company. It’s eating itself. They have bought back about 26 billion dollars worth of stock since 2011. They continue to shrink the float while growing earnings and you could see the success for yourself. These are the types of stocks that really started to move on the heels of Jackson Hole in a way that they haven’t in a long time.”
Parnassus Mid Cap Growth Fund stated the following regarding O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its Q1 2025 investor letter:
O’Reilly Automotive, Inc. (NASDAQ:ORLY), an aftermarket auto parts retailer, helped performance as the company posted steady results and benefited from its exposure to nondiscretionary consumer spending. Its scale, execution, and countercyclical demand profile continue to support our conviction.
8. Adobe Inc (NASDAQ:ADBE)
Number of Hedge Fund Investors: 104
Jim Lebenthal, a partner at Cerity Partners, expressed his frustration with Adobe in a program on CNBC back in late July. The analyst highlighted the AI-related overhangs and concerns Wall Street has about the company.
“I’m on my last my last nerve with this stock,” Lebenthal said. “I mean, it’s the company’s operational performance has been fine. The stock’s performance has been absolutely lousy. I’m giving it one more earnings report. That’s what the thing is is the stock keeps reacting like, well, the next quarter they’re going to get their lunch eaten by whomever. It’s not happening quarter after quarter. But what’s also not happening is the stock isn’t getting any respect. This is not a hill I want to die on. One more quarterly report. It either responds positively or I’m done.”
Adobe delivered strong quarterly results earlier this month and raised its outlook amid increasing adoption of AI tools. In the recently reported quarter, Adobe’s revenue rose 11% YoY and Digital Media revenue also jumped amid growth in AI-infused tools like Acrobat AI Assistant and Firefly.
Diamond Hill Large Cap Fund stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its second quarter 2025 investor letter:
“Despite the markets’ relatively sharp bounce following April’s downward volatility, we were able to initiate a new position in Adobe Inc. (NASDAQ:ADBE) at what we consider a compelling valuation.
Adobe is the largest provider of creative content software by a wide margin, offering a robust suite of tools used by design professionals across various verticals, including graphic designers, video editors, and web and mobile app creators. The company also has strong positions in marketing and direct customer engagement software and owns the near-ubiquitous Adobe Acrobat platform. Although investors have seemingly weighed the potential for greater competition and AI disruption in the period ahead, we believe the current valuation largely reflects these concerns, particularly given the breadth and diversification of Adobe’s solutions, its incumbency and strong market positioning and its ongoing willingness to innovate. For example, over the last few years, it has infused more AI into its existing products. Consequently, we believe Adobe can deliver solid fundamentals over the next several years. So, we capitalized on what we consider an attractive discount relative to our estimate of intrinsic value to initiate a position in Q2.”
7. Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 113
Robert Schein, CIO of Blanke Schein Wealth Management, said in a program on CNBC in late July that AMD will give Nvidia a “run for its money.” Here is how the analyst explained his bullish thesis for the chip company.
“Valuation is a terrible tool for trading. we look at valuations. put that aside. We want to look at so what is the marketplace? The total addressable marketplace for AMD is now a rival for Nvidia’s chip. In fact, AMD just increased their chip, the MI 350, which is the rival to the Blackwell. and that they increased it 67% on pricing power alone. So, they went from 15,000 per chip to 25,000. That’s going to take their creative earnings right to the bottom line. That just shows that the AI space is live, well, and strong. And they’re there to give Nvidia a run for its money.”
Longriver Partners Fund stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second quarter 2025 investor letter:
“Nvidia’s NVLink, its high-bandwidth interconnect, underpins training at scale, where GPUs must coordinate across racks. NVLink Fusion, announced this year, may extend that advantage by letting custom chips plug into Nvidia’s system rather than replace it. However, many inference tasks can be handled independently, one GPU at a time. That lowers the importance of networking, and with it, Nvidia’s edge in tightly integrated systems.
This has given Advanced Micro Devices, Inc. (NASDAQ:AMD) a window to become more than a second source. Its MI300X is now deployed at Microsoft, Meta, Oracle, and Dell. In some inference workloads, it beats Nvidia’s H100. As one expert put it, “ROCm used to be a science project. Now we’re finally seeing it run real workloads.” AMD plans to ship full-rack MI400 systems next year. It still trails in training, but inference gives it a real wedge into the market.
AMD is also leaning into openness. ROCm is open source, its interconnects run over Ethernet, not proprietary links, and it is sticking with x86 CPUs. That may appeal to buyers wary of lock-in or reluctant to cross-compile for ARM.”
6. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 115
In late July, Jed Dorsheimer, a William Blair analyst, said in a program on CNBC that Tesla’s deal with Samsung for chip production was positive and showed a “data point” that Elon Musk is innovating. However, the analyst explained why he downgraded the stock:
“The reason for our downgrade was the auto business continues to worsen. And yes, it’s not, you know, people are looking at these other businesses, but the margin structure, I think the the stock was able to perhaps absorb the $7,500 hit in terms of the tax credits where the vehicles will be more expensive, but then you got the double hit in terms of the regulatory fines that went away, rendering almost $3 billion of pure margin worthless on a go forward. So that just makes the business more challenging and further widens the gap between you know the core business which is auto energy right now and energy is getting better I I should say and these future opportunities that are still you know relative infancy that need to scale.”
Tesla shares are up 27% over the past month. The stock recently rallied after Musk bought back $1 billion worth of TSLA shares. Tesla’s EV sales are falling all over the world as the company faces challenges from competitors. Tesla’s global sales in the second quarter fell 14% year over year. Even if Elon Musk increases his focus to fix the company’s problems, it would take a lot of effort to come out of the demand crisis. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years.
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.”
5. Uber Technologies Inc (NYSE:UBER)
Number of Hedge Fund Investors: 152
Steve Weiss, Founder and Managing Partner of Short Hills Capital Partners, explained a program on CNBC late July why he piled into Uber shares. Here is what the analyst said:
“I think they’ve definitely got the pole position in autonomous and robo taxis, much more so than Tesla.They’ve got the right cost profile because they’re not picking up the cost. Waymo is. So, I think they’ll do quite well in the earnings because even though prices have gone up, you know, from what I’m hearing, demand hasn’t suffered. So, it all adds up to put up a good quarter.”
Brown Advisory Large-Cap Growth Strategy stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its second quarter 2025 investor letter:
“Uber Technologies, Inc. (NYSE:UBER), a global mobility platform, delivered a solid quarter, demonstrating continued strength in its core rideshare and delivery businesses. The company reported healthy growth in trips and bookings, with robust demand and expanding margins. While the stock has experienced some volatility over the last several quarters due to concerns about competition from potential autonomous vehicle offerings, especially from Tesla, Uber’s business remains resilient, with no signs of a consumer slowdown and international markets performing especially well. The partnership with Waymo in Austin is also off to a strong start, exceeding expectations. Management remains focused on both innovation and operational excellence, while ongoing share repurchases reflect their confidence in Uber’s long-term outlook.”
