Experts are sounding the alarm bell about a potential AI bubble burst sooner or later. But many believe major AI stocks still have a lot of room to run before seeing a correction. Billionaire hedge fund manager Paul Tudor Jones said in a latest interview with CNBC that while “ingredients” are in place for a potential market top, there’s going to a massive surge in stock prices before we see a “really, really bad end to it.”
“It’s 1999. Party like it’s 1999, right? Feels exactly like 1999. I don’t know whether we’ll actually replay it exactly, but I think all the ingredients are in place and certainly from a trading standpoint, you have to position yourself like it’s October 99. I don’t see why you would do anything but that,” Tudor Jones said.
The founder of Tudor Investment said investors could participate in the bull market because “the greatest” price appreciation is always in the last 12 months before the peak. The billionaire warned investors playing this bull market that they should be ready to exit before the real crash begins:
“If you don’t play it, you’re missing out on the juice. If you do play it, you have to have really happy feet because there will be a really really bad end to it. And my guess is that I think all the ingredients are in place for some kind of a blowoff. Will it happen? Again, history rhymes a lot. So I would think some version of it is going to happen again. If anything now is so much more potentially explosive than 1999.”
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10. CoreWeave Inc (NASDAQ:CRWV)
Number of Hedge Fund Investors: 29
Amit Daryanani, senior managing director at Evercore ISI, said in a latest program on CNBC that CoreWeave Inc (NASDAQ:CRWV) is positioned to benefit from the rising AI infrastructure demand. He recently started covering the stock with a $175 price target.
“You have Microsoft and Meta over here and hopefully other customers as well. I do think fundamentally what’s happening with them right now is demand for AI infrastructure is far in excess of what supply is. Coreweave is positioned to benefit really well from having one of the largest independent GPU clusters — 250,000 plus GPUs — that a lot of customers beyond just Microsoft and Meta could use. I would argue customers like Google and others could look at this as well to meet incremental demand, because that’s really what the shortage is right now: there’s not enough supply to go around for all these companies.”
9. VanEck Gold Miners ETF (NYSEARCA:GDX)
Number of Hedge Fund Investors: 46
Tim Seymour, the founder and Chief Investment Officer of Seymour Asset Management, recently issued a bullish call on GDX. Here is what the analyst said about the ETF:
“Gold miners, VanEck Gold Miners ETF (NYSEARCA:GDX). I mean, there was a time gold was defensive. There was Karen, how many a lot of reasons to buy gold, right? They’re anything you want. Anything you want. Well, the reason now is because I think it is offense for gold miners. Free cash yields are awesome. Stay there.”
8. Pfizer Inc (NYSE:PFE)
Number of Hedge Fund Investors: 83
Evan Seigerman, head of healthcare research at BMO Capital Markets, explained in a latest program on CNBC why he’s bullish on Pfizer.
“You know, we saw that upside from the dividend. And now with the Metsera acquisition, I think they could be a credible player in obesity. The data was good, highlighting that their due diligence process was done well. And then in terms of the fact that they are in good graces with the administration, whether you know it comes to tariffs, concerns around drug pricing, I could see further multiple expansion. Of course, they do have some issues with their loss of exclusivity products, but many of the pharma names that I cover do. And I think that as long as they stay the course in terms of margin expansion and developing their pipeline, they’re in good shape.”
Pfizer Inc (NYSE:PFE) recently announced to buy Metsera, Inc. (NASDAQ: MTSR), a clinical-stage biopharmaceutical company working on treatment for obesity and cardiometabolic diseases.
Parnassus Investments, an investment management firm that focuses on owning a concentrated portfolio of U.S. large cap stocks, released its Parnassus Value Equity Fund second-quarter 2025 investor letter. Here is what they have to say about Pfizer Inc. (NYSE:PFE) in their investor letter:
“We exited our position in Pfizer Inc. (NYSE:PFE) due to reduced conviction in its turnaround thesis. This was driven by a weaker research and development pipeline following recent trial setbacks, including an oral GLP-1 drug, as well as increased likelihood of large merger and acquisition activities that could raise leverage amid growing regulatory and tariff headwinds.”
7. Nike Inc (NYSE:NKE)
Number of Hedge Fund Investors: 81
Matt Boss, JPMorgan retail analyst, recently explained in a program on CNBC why he believes Nike Inc (NYSE:NKE) shares have more upside. The analyst increased his price target for the sportswear giant to $100 from $93. He had upgraded the stock to a Buy when the stock was lower
“So, there’s a company dynamic and then there’s a stock dynamic. At the company level, at the more micro level, the most interesting thing right now that’s changing is that in September, from a micro merchandising perspective, they’ve put a new team on the field at every one of their partners assessing opportunities, inventory, and new product development. That’s what they had really walked away from in the last couple of years. It seems like it would be table stakes, but that was when they were operating more for profitability, moving more online, and if anything, they alienated a lot of shelf space. That’s what I think they’re coming back to take. At the stock level, the call is pretty simple. Twelve to thirteen percent margins is $4 plus in earnings power. If you believe Nike can sustainably grow revenues going forward, this stock’s actually trading nine turns below where it was before this all started.”
Sands Capital Global Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its second quarter 2025 investor letter:
“The top individual absolute detractors were On Holding, Atlassian, NIKE, Inc. (NYSE:NKE), Builders FirstSource, and Carlisle Companies. Nike is the largest athletic footwear and apparel company in the world by revenue. We sold the business in the second quarter.
We exited Nike to fund the position in On Holding. In our view, On represents a faster-growing, earlier-stage version of Nike, which we believe is now a maturing business facing several operational and cultural challenges. We misjudged the extent of Nike’s market saturation and the implications for potential growth. We also gave the company too much time to recover from self-inflicted missteps—most notably its COVID-era shift toward direct sales, which came at the expense of wholesale partnerships, product innovation, and critical technology infrastructure.”
6. Merck & Co Inc (NYSE:MRK)
Number of Hedge Fund Investors: 92
Carter Worth from Worth Charting said in a latest program on CNBC that Merck & Co Inc (NYSE:MRK) is one of the stocks that has more upside potential based on his analysis. Here is what the analyst said:
“The first is Merck & Co Inc (NYSE:MRK). This is the definition of a bearish to bullish reversal buy. 150 day is flattening. That’s how something bases and bottoms. Merck & Co Inc (NYSE:MRK) is up about 5% over the past 30 days.”
Asked how much more the stock can run, Worth said:
“This kind of bullish price volume correlation with very heavy volume is hard to stop day to day, week over week. So I would think at least 10 to 15% higher in these names and thematically for left for dead healthcare names.”
Impax US Sustainable Economy Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its second quarter 2025 investor letter:
“Merck & Co., Inc. (NYSE:MRK) (Health Care, Pharmaceuticals) has a high Corporate Resilience score, and is contributing to a more robust and sustainable health care system through its leading drug and vaccine discovery. The stock’s weakness in Q2 was driven by a combination of concerns about its drug pipeline, particularly the competition from generic versions of Keytruda, and weaker market sentiment around Health Care stocks.”
5. Netflix Inc (NASDAQ:NFLX)
Number of Hedge Fund Investors: 133
Guy Adami from CNBC Fast Money said in a latest program that Netflix Inc (NASDAQ:NFLX) stock has not “traded well” since its earnings, but the impact of Elon Musk’s backlash against the company should not cause investors to sell it.
Musk recently urged his followers to cancel their Netflix Inc (NASDAQ:NFLX) subscription over a controversy about an animated Netflix Inc (NASDAQ:NFLX) show featuring a transgender character, according to media reports.
Adami questioned whether subscription cancellations following Musk’s post would “move the needle” for Netflix Inc (NASDAQ:NFLX) and said many people would also sign up for the streaming service to “counter” the potential cancellations.
“I think 10% is sort of a big estimate, I guess. Yeah, let’s just play stock market here. Yes, you’re right. I think the math is right. It’s probably a little bit less than that, but is that going to move the needle necessarily? And you’re going to see people sign up on the back of that to counter it. So, I think there’s some mitigation. Again, Netflix Inc (NASDAQ:NFLX) has not traded well since earnings. I think we all can agree on that and maybe for the first time valuation is a concern. I will tell you Tom Rogers came on the show right around that earnings period and actually for the first time in years was somewhat cautious on Netflix Inc (NASDAQ:NFLX) which gave us all pause, but I don’t think this is a reason to sell the stock.”
Macquarie Core Equity Fund stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its second quarter 2025 investor letter:
“Netflix, Inc. (NASDAQ:NFLX) offers a subscription-based streaming service. We expect the company’s growth momentum will continue while investments in content and licensing grow at a slower rate, allowing for higher margins over the coming two to three years.”
4. Constellation Energy Corp (NASDAQ:CEG)
Number of Hedge Fund Investors: 79
Ivana Delevska, the Founder and CIO of Spear, said in a recent program on Schwab Network that she believes CEG could benefit from the AI boom. Here is how she made the case for the stock:
“We believe that we’re going through a new wave of AI investments. The first wave with Nvidia Hopper infrastructure was going into existing data centers. The new wave requires brand new data centers and with that comes incremental power generation capacity. With that comes incremental infrastructure and networking equipment. So, we’re really looking to capitalize on that trend and this is where Constellation Energy Corp (NASDAQ:CEG) fits very well in the portfolio. They’re the leader on the nuclear side. They operate the largest nuclear fleet in the United States.”
ClearBridge Global Infrastructure Income Strategy stated the following regarding Constellation Energy Corporation (NASDAQ:CEG) in its second quarter 2025 investor letter:
“U.S. electric utility Constellation Energy Corporation (NASDAQ:CEG) Energy also outperformed for the quarter. Constellation is primarily a nuclear generation company and is the largest producer of carbon-free electricity in the U.S., serving states including New York, Illinois, Maryland, Pennsylvania and New Jersey. The company’s combined generation capacity is more than 32 GW and 90% of annual output is carbon free. Constellation’s share price benefited from the renewed optimism on data center deals.”
3. Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 115
Gene Munster, Deepwater Asset Management managing partner, said in a latest program on CNBC that the end of EV tax credits could bode well for Tesla Inc (NASDAQ:TSLA) because its competitors have been “under-investing” in the space, which is likely to give the Musk-led company an edge in the Full Self-Driving race.
“Since the beginning of the year when this became clear, we saw GM, Ford, Volkswagen, and Toyota all make comments about cutting their EV factory output, the number of models, and in general think about a 20 to 30% cut just over the past few months. The reason why I mentioned that commentary from people who are buying Tesla Inc (NASDAQ:TSLA) now about FSD, because they get that three-month free trial, is that in fact if these traditional car companies have taken the bait and decided to pull back investment in EVs because of the removal of the tax credit, it puts them in an awkward position. What’s going to happen with autonomy is it’s not going to slowly improve. We’re going to have this breakthrough moment. And for traditional auto to monetize this, they have to have an electric fleet. You’re not going to have a gas-powered EV. That’s just not going to happen. So by them essentially underinvesting, they’re not going to get to scale. It’s a catch-22. And I think they’ve really read the tea leaves wrong in terms of how to invest around the removal of the tax credit,” Munster said.
Munster said that Tesla Inc (NASDAQ:TSLA) has been making EVs “profitably” while its competitors are losing money
“Then there’s this other part of the equation about where they are with FSD and how close we are. From that perspective, it’s really coming down to two companies. It’s coming down to Tesla and then I think what’s going on with Waymo. I do want to mention Tesla and what they’ve been doing in Austin has been slower on the robo taxi. I believe they’re seeing more interventions than they were hoping for, which has caused that slowdown. And I think it does speak to the fact that we’re just not there yet. But I think we will have a moment. It’s not going to be linear. I think it’s going to be a breakout moment when it comes to the ability of these models to drive safely.”
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.”
2. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 156
Joseph Terranova from Virtus Investment Partners said in a latest program on CNBC that he believes Apple could make a new all-time high. Here is what the analyst said:
“Apple Inc (NASDAQ:AAPL) continues to push higher. I am long. I think we’re going to make a new all-time high in Apple. Okay. Yes. All right. I mean, we’re not that far away. Yeah, we’re not that far away.”
Apple can only do so much in innovation to revolutionize its iPhone each year. A UBS survey shows that the iPhone upgrade cycle has reached 35 months in the US. A separate report from Consumer Intelligence Research Partners says about 63% of iPhone users keep their smartphones for more than two years. Apple is losing its pricing edge as it has to put a cap on its price tags to compete in key markets like China. Samsung, Xiaomi and other companies can launch advanced hardware and software features to compete with Apple and keep the company under pressure in Asia.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its second quarter 2025 investor letter:
“Finally, shares of technology bellwether Apple Inc. (NASDAQ:AAPL) underperformed the market and lost value as the company faced a classic innovator’s dilemma, which appeared all the more egregious as competitors embraced the AI opportunity. Apple has had a dominant market position in smartphones and services, but now more than ever, investors are questioning the future outlook for the company. Despite posting a negative absolute strategy return during the quarter, which weighed on absolute strategy returns, relative to Apple’s the company’s large position in the benchmark our underweight position proved to be a tailwind to relative results during the quarter.”
1. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 235
Kevin Hincks from Charles Schwab said in a recent program on Schwab Network that market concerns about NVIDIA Corp (NASDAQ:NVDA) investments and the concentration of customers do not hold much weight.
“I think NVIDIA Corp (NASDAQ:NVDA) is just, you know, Nvidia’s got so much good news around it. I read a bunch of articles from analysts before I come on the air and get a general feel. Really, for the first time I’m ever remembering, one analyst is getting slightly negative on NVIDIA Corp (NASDAQ:NVDA) because he just thinks this circle of capex spending and the concentration, he’s worried about it. Now, I don’t think that’s accurate. I think NVIDIA Corp (NASDAQ:NVDA) is still in the early stages and I think the fact that they’re investing in broader companies and getting involved in the other aspects of AI shows that Jensen Wong is making investments in the whole spectrum of AI, not just selling the chips. And I think that is such a smart thing for him to do. Now, critics are going to say he’s going around in a circle, right? He’s investing in the companies, they’re investing in buying his chips, and he keeps investing, but I think they see the whole pie of AI getting bigger and that’s why he wants to be involved. I think it’s a smart move and I think that’s why people continue to get more and more bullish on this name.”
The current AI boom cycle stems from spending by major tech companies, and Nvidia is the biggest beneficiary of this spending. In Q2 FY2026, three direct customers accounted for 23%, 19%, and 14% of NVDA’s accounts receivable. Almost all of the company’s revenue comes from AI-related infrastructure spending. In the latest quarter, $41.3 billion of the $46.7 billion revenue came from these clients. The music could stop for Nvidia if these major companies decide to slow down their spending amid a lack of ROI. If investors sense a weakness in CapEx spending, and the market begins to waver, NVDA stock price would be the first to see its impact.
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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