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.”
Photo by Ruben Sukatendel on Unsplash
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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.”
4. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 156
Jeff Kilburg from KKM Financial said in a program on CNBC late July that he was selling Nvidia shares and buying Apple Inc (NASDAQ:AAPL). The analyst at the time said there was an opportunity for Apple Inc (NASDAQ:AAPL) to reach $230 if the company could show something “tangible” related to AI. While the iPhone maker is yet to make a dent with its AI plans, the stock was trading at around $238 as of September 18, having gained about 4% over the past 30 days. Here is what the analyst had said about Apple Inc (NASDAQ:AAPL):
“They have to say something. They have to capture AI somehow someway. They’re not a hyperscaler, so they don’t need to spend the money, but they need to deliver something to provide some optimism. We’re seeing Apple down about 17% from its all-time high. So, there’s an opportunity for Apple to run back up to 230, but it has to be tangible. We need something AI, Melissa, you’re right. Yeah, but you’re not paying. It’s not cheap. Apple’s not cheap here. Correct. It’s not. But I think if you look at the MAG 7, look at the MAG 7, it’s a 62% market cap concentration of the NASDAQ 100. It’s about 35% as a collective MAG 7 in the S&P 500. So Apple being the laggard, we have to remember, Melissa, that Apple, I know, has had a rough year, but the last couple years it has been producing. It’s been the cash cow. And it would be interesting to see if they make some type of purchase potentially in AI. It’d be the biggest purchase since Beats was just three billion.”
Renaissance Large Cap Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its second quarter 2025 investor letter:
“Apple Inc. (NASDAQ:AAPL) declined in the quarter. Despite reporting solid operating results, the stock came under pressure over concerns about decelerating iPhone sales, China growth headwinds, and underwhelming details for Apple’s long-awaited AI strategy. Tariffs were also an unexpected negative surprise, with Apple quantifying a sizable $900M cost impact. Moreover, the latest development in the Apple vs. Epic Games lawsuit resulted in a ruling that Apple had violated an earlier injunction, questioning Apple’s absolute control over its App Store.”
3. Broadcom Inc (NASDAQ:AVGO)
Number of Hedge Fund Investors: 156
Stacy Rasgon from Bernstein commented about Broadcom’s potential deal with OpenAI a few weeks back during a program on CNBC. Rasgon said AVGO’s revenue ramp reminds him of Nvidia.
“You know it’s been speculated that it’s OpenAI. It’s plausible. Whoever this is is moving very, very quickly seems to sort of fit with their persona,” the analyst said. “Now this is really important. You have to remember Broadcom had three customers that were shipping these AI chips. It was Google and Meta and ByteDance. They had four others that were prospects. So one of those prospects this one is now converted into a customer. And it is a tremendous amount of revenue. They said $10 billion next year, which is a very fast ramp relative to anything we’ve seen before. And they’re I mean, they’re implicitly guiding, you know, effectively their AI revenues next year. Well over $40 billion. It was like $30 billion as of last quarter. And I don’t know that it stops in 26 either. They sounded fairly positive that it would continue into the years beyond. And so, you know, if it starts to remind me a little bit of the revenue ramp we started to see for Nvidia, like, like several years ago when this really started to kick off.”
For the fiscal fourth quarter, AVGO expects $6.2 billion in AI revenue, up 66% from a year earlier. The company said it secured $10 billion in AI infrastructure orders from a new customer. Many analysts believe this customer is OpenAI. Some media reports said the two companies co-designed a chip that will be launched next year.
What’s Broadcom’s moat? It makes ASIC, chips designed for specific applications and tasks. As major companies look for custom chips to break Nvidia monopoly and lower costs, Broadcom is positioned well to thrive. Many top AI spenders are teaming up with Broadcom to develop these chips, which are expected to be high-margin, high-volume products, potentially driving substantial growth in both revenue and profits.
Renaissance Large Cap Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its second quarter 2025 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) was the largest contributor to our portfolio performance in the second quarter after reporting strong operating results and guidance. The stock benefited from continued invest tor enthusiasm for high growth momentum stocks, as well as from companies with exposure to artificial intelligence. Importantly, Broadcom has been growing its hyperscale and connectivity product portfolios, resulting in increasing revenue exposure to faster growing artificial intelligence applications and offsetting a slowdown in its legacy semiconductor business.”
2. Alphabet Inc (NASDAQ:GOOG)
Number of Hedge Fund Investors: 178
Philip G. Palumbo, Founder, CEO and Chief Investment Officer of Palumbo Wealth Management, said in a program late July on Schwab Network that AI-related concerns about Alphabet’s search business are overdone and the company’s cash flow generation is “not going to stop.”
“Google for us is a company where I really do believe the whole death of search which is most investors believe is happening is not happening. If you look at Google’s earnings yesterday, they were really terrific. They really nailed it in terms of search. You know, their their user visits are up four times over the past year and and just Google as a whole has incredible infrastructure. So, we see that business as a cash flow generated machine that’s not going to stop.”
Alphabet Inc. (NASDAQ:GOOG) bulls believe concerns around AI-related threats to Google search are overstated. Google has an edge over competitors because it’s easier for the billions of users of its search engine to switch to Gemini instead of opting for a completely new model. As of April, Google had over 1.5 billion monthly users interacting with its AI-powered Search overviews.
Google’s competitor OpenAI failed to impress the market with its GPT-5 model, while Gemini is gaining traction with new features. Analysts believe the company is strongly positioned to start placing ads in AI search results, which means its core ads business will not be impacted despite the decline in traditional search.
Pershing Square Holdings stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2025 investor letter:
“Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, is successfully executing on its vast AI potential. The company’s key advantages – stemming from industry-leading models, a full-stack approach to technical infrastructure (including proprietary chips), access to high-quality data, rapidly improving product launch velocity and a robust distribution ecosystem of seven different apps with over two billion users each – are beginning to meaningfully widen Google’s moat and competitive differentiation in AI.
In its core Search product, the company’s AI leadership is most evident in its broad roll-out of AI-powered summary responses, called “AI Overviews”. AI Overviews are now being served to more than two billion users across 200 countries, making it the most widely used consumer AI product. AI Overviews are resulting in users asking more detailed questions, clicking through at higher rates and searching with greater frequency. On the back of AI Overviews’ success, the company has also introduced “AI Mode”, which more closely resembles a chat-like user experience, directly onto the Search page…” (Click here to read the full text)
1. Nvidia Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 235
Jeff Kilburg from KKM Financial said in a program on CNBC late July that he was planning to sell Nvidia Corp (NASDAQ:NVDA) shares despite the idea sounding “crazy.” Here is how the analyst explained his decision:
“I want to sell Nvidia. I know it sounds crazy, but Nvidia at a new all-time high of $175. I want to sell Nvidia, take profits and the reason is because of the overconcentration. If you see the NASDAQ, we’ve talked about the NASDAQ right now. It’s on its 65th day of being above its 20-day moving average. So, a little long in the tooth, but this is momentum. This is the V-shaped recovery. So, by selling Nvidia, I want to buy Apple nearly the lagger. Tesla is just below Apple in the MAG 7. So, I think there’s an opportunity. If you want to short Nvidia, this is not for you. You will have a very hard time shorting Nvidia. But there’s an opportunity to either sell or trim position. I blindly bought Nvidia back in April at $92. So I’m taking profits.”
NVDA was trading at around $176 as of July 28, while the stock price is $170 as of September 18.
Nvidia’s Hopper Infrastructure and now Blackwell form the core of AI infrastructure for LLM training and inference. But Nvidia’s growth is slowing compared to previous quarters amid competition and capex spending limitations from major companies. In the recently reported quarter, Nvidia’s annual revenue growth came in at 56%, compared with nearly 100% YoY growth in the past.
With its strong position in the data center market and rising demand, Nvidia is likely to keep growing, though not at the same pace it has in the past. Increasing competition from major companies like Broadcom is also expected to impact Nvidia’s margins in the long term.
Brown Advisory Large-Cap Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:
Information Technology was the largest detractor from relative performance during the quarter. The strategy’s underweight to NVIDIA Corporation (NASDAQ:NVDA) and not owning Broadcom (AVGO) were the two largest detractors during the period. NVIDIA (NVDA), a market leader in advanced graphics processing units, rebounded after a first quarter marked by a lower gross margin outlook, which was attributed to short-term complexities in ramping up Blackwell production, and a broad-based decline in AI infrastructure stocks. The company’s most recent quarterly earnings were modestly ahead of consensus expectations, and management expects gross margins to increase by year-end as yield and throughput on Blackwell racks continue to improve.
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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