Wall Street’s AI trade just had one of its worst weeks in years. Politics and inflation hit it at the same time. The Nasdaq Composite posted its deepest one-day drop since April 2025 last week, after Democrats swept the midterm elections and investors began weighing tougher scrutiny of AI and limits on data center construction. The Cboe Volatility Index climbed to a seven-month high the same day.
Why the AI Selloff Hit Chip and Data Center Stocks So Hard
Stocks first cheered the election. They closed sharply higher the day after the vote because the result cleared up political uncertainty. Then chipmakers and data center operators fell, even as the biggest, cash-rich AI spenders rose. A slower buildout eases cash demands on the companies doing the spending, but it squeezes the operators and suppliers whose growth depends on fast construction.
Scott Chronert, head of US equity strategy at Citi Research, said a change in the pace of the data center buildout changes the basic path for many of those suppliers. Our list of oversold AI stocks where Wall Street analysts see 50% upside or more covers more of the group.
Hot Inflation Puts the Fed Back in Focus
Inflation added a second worry. The Labor Department said consumer prices rose 0.4% in October, a third straight gain of 0.4% or more. Economists polled by Reuters had expected 0.3%. Markets now fully price in a Federal Reserve rate increase of at least 25 basis points in December, up from 84% a day earlier, according to CME FedWatch.
Fed Governor Christopher Waller said the central bank should raise rates in December even if inflation had cooled. He said a half-point move should be considered if the picture worsened. Jason Ware, chief investment officer at Albion Financial Group, said investors began to wonder whether the Fed worried more about inflation than they did, and sold some stocks.
The rout wiped out trillions of dollars in market value and clouded the outlook for a global economy the AI boom has been supporting. Readers following the chip side of the trade can find more names in our list of the best semiconductor stocks to buy for the next decade. Ahead of the Fed’s December meeting, traders expect about two more quarter-point increases in total this cycle, according to LSEG data.
Our Methodology
For this article, we used Finviz to screen for US-listed stocks with an average upside potential of at least 75% upside, as of November 11, 2026. We ranked the 10 with the most upside in ascending order of this metric. We also list each stock’s number of hedge fund holders as of Q2 2026, from our database of 1,006 hedge funds.
At Insider Monkey, we are obsessed with what hedge funds do. 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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
10 Multibagger Stocks to Buy According to Wall Street
10. SK Hynix (NASDAQ:SKHY)
Average Upside Potential: 89%
Number of Hedge Fund Holders: N/A
Rosenblatt Securities analyst Kevin Cassidy raised his price target on SK Hynix to $400 from $320 on October 28 and kept a Buy rating, the day the chipmaker reported a record quarter. He thinks the market is misreading memory. Long-term contracts already cover more than half of 2027 and 2028 capacity, and management expects much higher revenue and profit next year.
Revenue rose 328% from a year earlier, and operating margin hit 80%. The South Korean company makes the DRAM and NAND chips that store data in servers, plus the high bandwidth memory that sits next to AI processors. Management says demand will outrun supply through 2030, and HBM4, its newest high bandwidth chip, becomes its main product in the fourth quarter.
Whether margins that high can last is something we explored for SK Hynix.
9. Nebius (NASDAQ:NBIS)
Average Upside Potential: 90%
Number of Hedge Fund Holders: 86
Nebius beat third-quarter revenue estimates and changed how customers pay. Revenue jumped 571% from a year earlier to $980.8 million, above the roughly $907 million analysts expected. Customer prepayments on third-quarter deals covered more than 100% of the related capital spending, compared with 50% to 60% in the previous quarter.
Group adjusted EBITDA was $465.8 million, against a loss of $5.2 million a year ago, and the margin widened to 47.5% from 40.6% in the second quarter. Management cautioned against reading too much into that. The quarter included revenue recognized at a point in time that does not recur in the same form. That revenue was about $325 million, booked under the asset-light model. Yahoo FinanceYahoo Finance
Nebius rents AI computing capacity from its own data centers to companies that train and run AI models, and the spending to build that capacity is the other side of the quarter. Full-year 2026 capital spending is now expected at around $27 billion, up from $20 billion to $25 billion.
For 2027, the company projects revenue of $12 billion to $13 billion. It will stop guiding to annualized run-rate revenue and guide revenue, pre-tax earnings and capacity instead. Our earlier piece on Nebius’s pricing power and why its earnings do not show it yet goes deeper.
8. Flex (NASDAQ:FLEX)
Average Upside Potential: 91%
Number of Hedge Fund Holders: 94
Goldman Sachs analyst Mark Delaney lifted his price target on Flex to $159 from $145 on October 29 and kept a Buy rating, a day after the company raised its full-year outlook.
Flex builds electronics for other companies, and its fastest-growing unit now makes power and cooling equipment for AI data centers. That unit grew 54% in the fiscal second quarter, and management expects full-year adjusted earnings per share to rise 52% at the midpoint. Chief Executive Officer Revathi Advaithi plans to spin the unit off as a separate company called Axiom.
Shareholders approved the Axiom spin-off earlier this month, by an overwhelming margin. Flex expects to complete the separation in the first quarter of 2027.
Debt comes with it. Flex borrowed $4.4 billion to buy EPC Power, a maker of power conversion equipment, and Axiom agreed to sell $2 billion of convertible preferred stock to repay part of that. Advaithi says EPC adds products for the 800-volt power designs data centers are moving toward.
7. Seagate (NASDAQ:STX)
Average Upside Potential: 94%
Number of Hedge Fund Holders: 131
Morgan Stanley analyst Erik Woodring rated Seagate Overweight with a $1,148 price target on November 6. He says fundamentals are strong while sentiment is weak, and he thinks buybacks could eventually reach about 30% of the company’s market value. Pricing in calendar 2028 is the risk he watches.
Seagate makes the hard drives cloud companies use to store data. Its Mozaic drives use heat-assisted magnetic recording, known as HAMR, to fit up to 44 terabytes on one drive, and two leading cloud providers are ramping them. Revenue rose 61% in the fiscal first quarter, and gross margin hit a record.
Chief Executive Officer Dave Mosley expects HAMR to make up roughly half of nearline shipments by the end of the year. Management says most nearline supply is already allocated through 2028. Our look at how Seagate rose selling a technology many had buried tells the longer story.
6. Strategy (NASDAQ:MSTR)
Average Upside Potential: 96%
Number of Hedge Fund Holders: 37
B. Riley analyst Fedor Shabalin trimmed his price target on Strategy to $180 from $195 on November 3 to reflect a lower bitcoin price. He kept a Buy rating. TD Cowen also kept a Buy rating, with a $260 target, on October 30. It points to a cash reserve that covers roughly 3.2 to 3.4 years of preferred dividends and debt interest, and to a steadier STRC preferred stock.
Strategy started as a business software company and is now the largest corporate holder of bitcoin, with 848,517 coins. Software revenue is tiny next to that pile, so results swing with bitcoin’s price. Third-quarter earnings of $44.75 per diluted share were almost all a paper gain on the coins.
The balance sheet looks sturdier than it did, with lower net leverage. Bears focus on bitcoin per share, the measure management calls most important. It fell 3.7% this year as the company sold stock and some coins to fund preferred dividends and buybacks. Chief Financial Officer Andrew Kang has also stepped down, citing personal reasons. You might also be interested in reading our piece on Strategy’s earlier surge on growing digital asset adoption.
5. Oracle (NYSE:ORCL)
Average Upside Potential: 97%
Number of Hedge Fund Holders: 119
Stephens analyst Brett Huff upgraded Oracle to Overweight from Equal Weight on November 2 and raised his price target to $213 from $185. Oracle’s investor day settled his biggest worry: how it will pay for its AI cloud buildout. New capital raises are capped at $20 billion, lower than he feared, and he expects free cash flow to come in higher.
At the same event, management set a fiscal 2030 revenue target of $225 billion or more and said free cash flow should turn positive in the second half of fiscal 2028. The stock jumped about 11% that day.
Oracle sells the databases and business software many large companies run on, and it now rents out AI computing capacity too. Its long-standing database customers give it a ready base to sell cloud services into. We also examined whether Oracle’s economic moat is widening or narrowing.
4. Western Digital (NASDAQ:WDC)
Average Upside Potential: 98%
Number of Hedge Fund Holders: 98
Cantor analyst C.J. Muse cut his price target on Western Digital to $625 from $900 on October 23 and stayed at Overweight. He raised his earnings estimates. The lower target reflects valuation compression, not weaker earnings.
Western Digital sells the high-capacity hard drives that cloud companies fill with data, and its latest quarter beat its own guidance. Fiscal first-quarter revenue rose 55% to $4.38 billion, and adjusted earnings per share jumped 161%. Chief Financial Officer Kris Sennesael credited strong exabyte growth and better pricing. Management guided to $5.80 in adjusted earnings per share at the midpoint for the next quarter.
The risk sits in its own filings: revenue comes mostly from cloud customers and a small group of top buyers. Our take on whether Western Digital is a good or bad investment at today’s price covers the valuation.
3. CoreWeave (NASDAQ:CRWV)
Average Upside Potential: 106%
Number of Hedge Fund Holders: 71
Rosenblatt analyst John McPeake reiterated a Buy rating and a $160 price target on CoreWeave on November 11. He said the third-quarter results and management’s comments answered the main worries about funding and profitability.
CoreWeave rents AI computing power to companies that train and run models. Revenue rose 168% in the quarter, and its backlog of contracted work reached $132.5 billion. Chief Executive Officer Michael Intrator said the company raised prices 25% and then another 10%.
Debt keeps bears wary. Chief Financial Officer Nitin Agrawal said CoreWeave does not plan to issue more unsecured debt at the parent level at current yields through 2027, because interest costs rise again next quarter. For more on whether CoreWeave’s balance sheet can keep pace with its backlog, see our earlier piece.
2. Micron Technology (NASDAQ:MU)
Average Upside Potential: 110%
Number of Hedge Fund Holders: 184
Bernstein analyst Mark Li reiterated a Buy rating and a $1,300 price target on Micron on November 4. He points to multi-year visibility from contract pricing. Citi analyst Atif Malik also rated the stock Buy with a $1,300 target on October 29. He expects stronger-than-expected DRAM pricing on the roughly 60% of output outside long-term agreements, with supply still short of demand.
The stock jumped 13% in a day this week after customer CoreWeave raised its 2026 revenue outlook and eased fears that AI spending is slowing. Micron also joined a $26 billion group of investors backing Anthropic’s IPO.
Micron makes the DRAM and NAND memory chips that store data in servers, phones and PCs, and it sells the high bandwidth memory used beside AI processors. DRAM has only a few big makers: Micron, SK Hynix and Samsung. We took up why the stock trades at such a low earnings multiple despite high margins in a piece on what Wall Street may be missing.
1. Sandisk (NASDAQ:SNDK)
Average Upside Potential: 132%
Number of Hedge Fund Holders: 128
Bernstein analyst Mark Newman has kept an Outperform rating and a $3,000 price target on Sandisk since the company beat its own earnings guidance.
Sandisk makes the NAND flash chips used in solid-state storage, and data centers are buying them faster than it can make them. Fiscal first-quarter revenue topped $11 billion, and adjusted earnings of $49.51 per share beat the company’s own guidance. Chief Executive Officer David Goeckeler raised his forecast for data center demand growth this year.
The stock has not cheered. It has fallen about 51% in a month as memory and AI names sold off, and partner Kioxia warned that flash price gains are fading. An 8-for-1 stock split takes effect later this month. Whether a peak is already in the price is the debate, and our look at whether a peak is already priced into Sandisk’s stock covers it.
READ NEXT: SanDisk (SNDK) Is Now Worth More Than the Company That Spun It Off and Micron (MU) vs. Sandisk (SNDK): Is the Smaller Factory Bill Really an Advantage?
