10 Best AI Stocks to Buy After Wells Fargo’s Outlook Upgrade

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4. Marvell Technology (NASDAQ:MRVL)

Average Upside Potential: 87%

Number of Hedge Fund Holders: 96

BofA analyst Vivek Arya downgraded Marvell to Neutral from Buy and cut his target to $225 from $400 after the company agreed to buy Lumentum in an all-stock deal. TD Cowen also downgraded the stock to Hold from Buy and cut its target to $175 from $350.

Marvell designs the chips and networking gear that move data inside AI data centers, and Lumentum makes optical components that carry that data as light. The deal, valued at about $115 billion including debt, sent Marvell shares down about 13%. Because Marvell is paying in its own stock, current shareholders will own a smaller slice of a larger company.

Not everyone backed away. UBS reiterated its Buy rating and $350 target on November 3, and Cantor Fitzgerald stayed at Neutral with a lower $225 target. The split shows investors weighing whether the optical business gives Marvell a bigger share of AI spending or adds integration risk. Investors will also watch how the two companies combine their product lines. The skeptics’ case predates the deal, and we laid out what the few analysts without a Buy rating saw weeks earlier.

3. Oracle (NYSE:ORCL)

Average Upside Potential: 90%

Number of Hedge Fund Holders: 119

Stephens upgraded Oracle to Overweight from Equal Weight on November 2 and raised its target to $213 from $185, after the company’s investor day. Management said free cash flow should turn positive in the second half of fiscal 2028 and capped new financing at $20 billion through fiscal 2030, split evenly between debt and equity.

Oracle sells databases and business software, and it now rents AI computing capacity to customers building large models. Stephens argues that vendor financing, customers’ own hardware and prepayments now cover much of the buildout, which leaves Oracle needing about half the new money analysts once expected. The stock has fallen about half from its high a year ago, so the financing plan sits at the center of the debate. The $213 target sits below the average of analysts covering the stock.

The open question is concentration. S&P has said OpenAI makes up about half of Oracle’s $664 billion backlog, so much of the expected revenue depends on OpenAI paying its bills. Oracle reports quarterly results in December. A slower-moving question, how durable Oracle’s competitive edge is, gets attention in our look at its economic moat.

2. Sandisk (NASDAQ:SNDK)

Average Upside Potential: 121%

Number of Hedge Fund Holders: 128

Wells Fargo analyst Aaron Rakers cut his Sandisk target to $1,300 from $1,550 on October 30 and kept an Equal Weight rating, a day after the company reported fiscal first-quarter results. He expects the pace of earnings upside to slow. Sandisk also announced an eight-for-one stock split. The new shares arrive next Thursday and split-adjusted trading starts the next day, so the $1,300 target is a pre-split figure.

Sandisk, spun out of Western Digital last year, makes the NAND flash chips used in solid-state drives, and AI data centers have pushed demand and prices sharply higher. In the fiscal first quarter, revenue reached $11.0 billion with an 85% gross margin, and the company guided the next quarter to $12.2 billion to $12.6 billion. AI servers need large amounts of fast storage, which explains the demand.

The worry is how long prices keep rising. Kioxia, a rival flash maker, warned that price gains are fading, and Sandisk shares fell 14% in a week. Fox Advisors downgraded the stock to Equal-Weight on November 2, while Wedbush kept an Outperform rating and a $2,000 target. Whether the memory boom has already peaked is the question we put to Sandisk’s forward earnings multiple.

1. SoundHound AI (NASDAQ:SOUN)

Average Upside Potential: 186%

Number of Hedge Fund Holders: 20

Cantor Fitzgerald analyst Thomas Blakey trimmed his SoundHound target to $10 from $15 on November 6 and kept an Overweight rating, a day after the company reported third-quarter results.

SoundHound sells voice AI software that lets cars, restaurants and customer service lines understand spoken requests. Revenue hit a record, up 48% from a year earlier. The quality of that revenue slipped, though: non-GAAP gross margin fell to 50.3% from 59.3% a year earlier. Management said revenue recognized at a single point in time shrank sharply as a share of sales. Investors are watching whether margins stabilize as the revenue mix shifts.

The company is cutting costs by $120 million on an annualized basis and says it expects an adjusted EBITDA profit in the second half of 2027. The next report will show whether margins recover. The company also closed its LivePerson acquisition, which adds customer-service software and more customers to sell to. Bulls see sales growth that is still strong, while bears see a company spending heavily to chase scale. We examined whether the LivePerson acquisition fixes SoundHound’s scale problem after the deal closed.

READ NEXT: SoundHound vs. Rezolve: Which AI Growth Story Is Worth the Financing Risk? and Salesforce (CRM) vs Oracle (ORCL): Which Is a Better Stock to Buy?

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